Taxation in Uganda has been mandated to a central Government semi-autonomous body – Uganda Revenue Authority and apparently, there are a number of laws through which residents and non-residents are taxed. These among others include;
- Income Tax Act – ITA
- The Value Added Tax Act;
- Stamps Act
- The Traffic and Road Safety Act;
- East African Community Customs Management Act (imports and exports).
A resident individual is a person who has a permanent home in Uganda; or is present in Uganda for a period of 183 days or more in any twelve months period that commences or ends during the year of income; or during the year of income and in each preceding two years of income, the individual is present for periods averaging to 122 days in each of such years; or is an employee or official of the Government of Uganda posted abroad during the year of income. A non- resident is therefore the opposite of a resident. A resident company is one which; is incorporated in Uganda under the laws of Uganda; is managed or controlled in Uganda at any time during the year of income; undertakes majority of its operations in Uganda during the year of income. A resident partnership is one where any of the partners was a resident person in Uganda during the year of income.
SUMMARY OF RATES THAT APPLY TO VARIOUS DOMESTIC TAX TYPES
Income Tax is imposed on a person’s taxable income at specific rates. A person under the ITA includes; an individual, a company, partnership, trustee, government and subdivision of government. Income Tax is charged on every person who has chargeable income (comprising business, employment and property) for each year of income. Chargeable Income is the GROSS INCOME of a person for the year of income less total deductions allowed under the ITA while Gross Income is the total amount of business, employment and property income other than exempt income.There are two categories of persons under the ITA, Resident and non-residents.
A. PAYE (PAY AS YOU EARN)
PAYE tax should be deducted at source by the employer and remitted monthly to URA. Employees who pay PAYE and have no other source of income do not need to complete an annual tax return.
B. Corporate Income Tax
• Resident and Non Resident Companies – 30% of profits after deducting expenses.
• Mining Companies – Ranges between 25% and 45% of profits.
• Trustee Companies – 30% of Income
• Retirement Fund – 30% of income.
• Branches are taxed at 30% and there is an additional tax of 15% which effectively applies to profits repatriated to head office.
C. Withholding Tax
i) Professional fees
A resident person who pays management or professional fees to a resident professional is required to withhold tax at a rate of 6% of the gross payment.
• Non residents
Withholding tax is imposed on every non-resident person deriving incomeunder a Ugandan – source service contract. This is a contract under which the principle purpose is the performance of services which gives rise to income sourced in Uganda, and any goods supplied under the contract are only incidental to the purpose. A Ugandan-sourced service contract does not include an employment contract. The tax is charged at a rate of 15% of the gross amount of any payment to the non-resident under the Ugandan sourced service contract. Any person who enters into any service contract with a non-resident is required, within 30 days of entering into the contract, to notify the Commissioner of the nature and duration of the service contract, and disclose the particulars of the non-resident to whom the payment is to be made, as well as the full contract value. Basing on this, the Commissioner may require the payer to withhold the relevant tax at a rate specified in the Commissioner notice
ii) Interest payments
A resident person who pays interest to another resident person is required to withhold tax at 15% of the gross amount of the interest paid.This withholding tax is not applicable where interest is paid by a natural person, interest, other than interest from government securities, paid to a financial institution, interest is paid by a company to an associated company or interest paid is exempt from tax in the hands of the recipient.
A resident Company which pays a dividend to a resident shareholder is required to withhold tax at 15% of the gross amount of the dividend paid, except where the dividend income is exempt from tax in the hands of the shareholder. Where the shareholder is a natural person (resident individual), the tax withheld on such dividend income is final.
iv) International payments
Tax is imposed on every non-resident person who derives any dividend, interest, royalty, rent, natural resource payment or management charge from sources in Uganda. The tax is withheld by the payer at a rate of 15% of the gross amount before payment/remittance of the amount is made. However interest paid abroad by a resident person is exempt from tax if:
• Borrowing is through debentures which were widely issued for purposes of raising loan capital to carry out business in Uganda.
• Borrowing is made from a financial Institution of a public character.
v) Non Resident entertainers or sports persons
Tax is imposed on the income derived in Uganda by every non-resident entertainer, sports person, or theatrical, musical or other related groups of entertainers. The tax is charged at a rate of 15% of the gross amount of the remuneration derived by the public entertainer/sports person. Where the tax is levied on a group, every member of the group is jointly and severally liable for payment of the tax.
The URA helpline is an excellent source of information 0800117000
Elite Digital Solutions
Spring road Bugolobi
t: 0414 255 933/ 0312 264 255
Village Mall t: 0312 110 054,
Garden City t: 0312 110 489
Canopy IT Solutions
t: 0312 515 365, e: email@example.com,
CERT Computer Solutions
683, Willis road Kampala
t: 0414 270 793, e: firstname.lastname@example.org
1179 – 1181 Ggaba Rd Kabalagala
t: 0750 557003/001,
Course view Towers, 1st floor
21 Yusuf Lule Rd t: 0414341382
Course view Towers, 7th floor
21 Yusuf Lule Rd t: 0312314302
65 Yusuf Lule Road t: 0414251141
8 Hannington Road, Nakasero
t: 0312261774 m: 0772 261775 / 0792261774
15A, Ground floor, Village Mall, Bugolobi
t: 0312 516 677 m:0774 448 222
e: email@example.com, w: www.wasanii.ug
2nd floor, Eseza House, UMA show grounds
t: 0312 516 811, e: firstname.lastname@example.org
Nze Eve Photography
t: +256 774 573 793
Professional Documentary Wedding Photography
M: 0794 254 564
Mirage Concepts Uganda
87, Kira Road Kamwokya
t: 0774 027767 / 0701 097785
CLEARING & FORWARDING
5th Floor, Nakasero Road Kampala Rwenzori towers, e : email@example.com
t : 0313 673752 / 0772 720218 / 0701 044285
w : www.mebs-global.com
TRAVEL & ANIMAL CARE
Vetluv Pet Travel (Pet Travel, Clinic & Boarding)
Kirinya Bukasa Road
t: 0200 903 626, 0772 433 054, 0755 433 054
All large supermarkets stock a range of pet foods and supplies. Some petrol station shops have sacks of dog meal.
Also there are a few pet stores, plus dog trainers.
Mawanda Road, Kamwokya (All kinds of pets, foods and accessories.)
t: 0414 257 105, 0414 257 106
e: firstname.lastname@example.org, w: www.aquaria.ug
The Uganda Society for the Protection and Care of Animals (USPCA ) is a one stop centre for numerous dogs of different breeds and ages.
Cats and dogs can be adopted from USPCA
12 Ismail road, Mbuya, Kampala. m: 0772 403 789,