Latest news with #compliance costs
Zawya
4 days ago
- Business
- Zawya
Airlines face rising Corsia costs as 2027 offset demand hits 79MT: IBA
IBA, a leading aviation market intelligence and advisory firm, reports that airlines are forecast to offset 79.25 million tonnes (MT) of carbon in 2027 under Phase 2 of Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), amid tightening credit supply and rising compliance costs. With limited eligible supply and increasing demand, offset prices could surge to $25–$60 per tonne by the late 2020s, according to MSCI. IBA estimates that carriers such as Emirates could face Corsia-related compliance costs of up to $346 million in 2027, equivalent to 3.5 per cent of its projected fuel budget. According to insights from IBA's NetZero platform, the top 10 airlines will be responsible for offsetting 29MT of emissions in 2027 alone. This increase is driven by stronger participation in Phase 2 of CORSIA, alongside rising international air traffic. IBA's forecast aligns with IATA's 'Upper Bound' growth factor of 21.8 per cent above 2019, with Corsia obligations based on 85 per cent of 2019 emissions. The burden is especially high in newly mandated regions such as Asia-Pacific, where India and China's compliance from 2027 could drive 27MT of offset-eligible emissions. While demand rises sharply, supply remains constrained. Only credits from ICAO-approved programs with valid Letters of Authorisation (LoAs) and host-country adjustments qualify. As of mid-2025, just ~1,500 of 4,000+ eligible projects are in jurisdictions prepared to issue LoAs. Currently, only one Reducing Emissions from Deforestation and Forest Degradation (REDD+) programme in Guyana has issued Corsia-authorised credits (approximately 15.8M). REDD+ is an UN-backed framework that generates carbon credits by protecting and sustainably managing forests. Even with optimistic scaling of new mechanisms like jurisdictional REDD+ (J-REDD+) and the Paris Agreement Crediting Mechanism (PACM), IBA forecasts that total supply before 2027 is unlikely to exceed 136 million credits, which is barely enough to cover Phase 1 demand.
Zawya
11-07-2025
- Business
- Zawya
Small firms caught in Uganda taxman's crosshairs
The increasing use of data analytics, a spike in tax litigation and reports of small businesses closing due to unpaid dues have raised the stakes for enterprises seeking to stay on the right side of the law. Despite tough economic conditions in the past year, the Uganda Revenue Authority (URA) has recently intensified its collection efforts. It has adopted data analytics to filter inaccuracies found in tax returns, and queries raised by tax officers regarding discrepancies detected in entries are now taking a toll on taxpayers. The data analytics platform checks historical tax returns covering multiple taxpayers, different tax heads, and also flags errors in real time going back several years. Income tax and value-added tax (VAT) assessments account for a lion's share of tax disputes during the previous financial year, which ended on June 30. However, the monetary value of these cases could not be confirmed by press time. In the 2024/25 financial year, some 20 small businesses in the manufacturing sector were affected by this move, sources at URA said. The actual value of the businesses was not disclosed.'URA's adoption of data analytics led to deeper analysis of tax returns in the previous financial year. This means any small variation in one's tax returns immediately triggers queries,' argued Jet Tusabe, Tax Director at BDO Uganda.'This has led to increased working hours spent on addressing tax queries, and this implies higher compliance costs for taxpayers.'Officially, the TAT currently receives 35 to 40 cases per month relating to tax assessment disputes. But, URA has been accused of ignoring some decisions issued against it and shutting down entities in question. 'I haven't heard about any small businesses that have been closed over unpaid taxes. But, any taxpayer who has difficulties clearing their tax obligations should reach us and we will discuss a payment plan,' said Hassan Wasajja, a URA office supervisor.'Small tax liabilities might require two instalments to clear, while huge liabilities might require more than two instalments to settle,' he added. Tax target vs public debtThe revenue collection target for the financial year 2024/25 stands at Ush31.9 trillion ($8.8 billion). The taxman posted a revenue surplus of Ush45 billion ($12 million) in the first quarter of 2025, but prospects of hitting the overall collection target appear slim, observers say. Uganda's tax collection target for the financial year 2025/26 is estimated at Ush33.94 trillion ($9.3 billion).'So many calls, tax audit after tax audit, query after query, and so many agency notices keep coming from URA to our clients. As a result, our clients, who are mainly multinationals, have been forced to hire extra hands to deal with tax matters,' said Ronald Kalema, Tax Partner at AF Mpanga and Co. Advocates.'For example, a client who gives us instructions for a specific tax case will also sign up BDO and KPMG to take care of additional tax assessments issued by URA. Most of the problematic tax assessments are tied to domestic taxes, especially VAT and income tax. We received about five agency notices issued by URA against our clients last month, and we blocked two of them in courts of law.'In contrast, according to parliamentary data, the country's total debt portfolio was projected at Ush107 trillion ($29.6 billion) by the end of 2024/25. Total interest payments are estimated at Ush11.3 trillion ($3 billion) during the financial year 2025/26, which has exerted major financial pressure on the tax body in recent months. Domestic borrowing is expected to raise Ush11.4 trillion ($3.2 billion) towards the country's resource envelope in this financial year. Some experts argue that enterprises should respond promptly to communications from the URA to avoid issues escalating.'If URA is having issues with a taxpayer, it will make several calls, send texts, and emails to the affected taxpayer. Failure to respond might compel URA to issue a new tax assessment bill that is too prohibitive for the taxpayer,' said Christopher Kakande, a partner at Kalinda and Associates, during a tax education webinar held in June.'It is necessary for a taxpayer to compile their historical financial information and submit it to URA to resolve such problems.' © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
