Uganda Tax and Investment incentives info plus Important African Tax News
As a business traveler planning an Investment in Africa, you will need to know your Uganda Tax obligations, as these Tax costs will directly affect your bottom line. You also realize that in the current Global Economic crisis has caused governments to focus on governance and regulation of private companies. This means that tax compliance has become more important to African governments than it was in the previous decade. Your tax compliance failure therefore represents not only a financial risk, with financial penalties and a possible increase in the tax charge , but also a serious business risk, as it can damage your company’s reputation with the authorities and the public. | Tip Your business should be able to manage multi-territory compliance requirements and keep abreast of the changes occuring in local legislation that affect these tax requirements. | On this page we provide you with relevant information regarding the Uganda Tax System;
The Ugandan tax system
The Uganda Tax System can be summarised within Five (5) major Elements.
- Corporate and personal income tax,
- Value added tax (VAT) on goods and services,
- Customs and excise duties,
- And stamp duty.
- There are also a number of statutory levies and social security payments.
Taxes are collected by self-assessment and by withholding tax on payments to residents and non-residents.
As an Employer you are obliged to withhold and account for income tax on your employee remuneration and benefits (the PAYE system).
You will be charged with penalties and interest for non-compliance and late payment of taxes in Uganda
The Uganda Revenue Authority is the central body mandated to assess , collect specified tax revenue, administer and enforce laws relating to such revenue.
This statutory body conducts regular audits and investigations of taxpayers.
Uganda Government Investment Incentives
It is common knowledge that tax is a cost to business and one of the main considerations in making investment decisions. In designing tax policies therefore, the government of Uganda has to pay attention to the levels of marginal tax rates charged to business and other income.Our government offers a fair incentives package that provides generous capital recovery terms, especially if your project will entail significant investment in plant and machinery and you're likely to yield profits over the longer term. The rights and incentives package includes: - Zero rate of tax on imports of plant machinery and equipment.
- 7% Import duty on specialized tourist vehicles.
- VAT Deferral facility for plant, machinery and specialized tourist vehicles
- Guaranteed repatriation of profits and dividends.
- Guarantee against non-commercial risks is through the multi-lateral investment guarantee agency (MIGA) of the World Bank.
- Up to 100% foreign ownership of investments allowed,
- Capital allowances of 50% on plant and machinery for projects located in Kampala, Entebbe,Namanve, Jinja and Njeru. Outside these areas the deductible allowance is 75%.
- Start up costs allowance spread over the first 4 years at 25% per annum.
- 100% allowance on scientific research expenditure and training expenditure also deductible oncefrom the company’s income.
There is deductible annual allowance on depreciable assets, which are specified in 4 classes (sixth schedule) under declining balance method. - Class I: Computers and data handling equipment 40%
- Class 2: Plant and machinery, vehicles 30%
- Class 3: Furniture, fixture 20%
- Class 4: Industrial buildings, hotels and hospitals 5%.
- A nominal corporate tax of 30%, which is among the lowest in Africa and the world, and
- Duty draw back or refund for exporters is available.
How to determine whether you will need a Uganda tax consultant
Before you hire a Uganda Tax Consulting firm , you need to ask yourself the following questions.
- Do I want to know and take advantage of the available unilateral and double taxation relief and incentives in Uganda?
- Do I intend to acquire or dispose off my company (shares or assets)? and Do I want to know the most tax efficient way of doing it?
- Do I want to invest in Uganda so as to maximize the benefit of Uganda tax incentives and minimize tax costs?
- Am I considering balance sheet restructuring with a view to improving shareholders’ wealth? and Do I need this done efficiently from a tax point of view?
- Do I want to know the impact of withholding taxes, VAT and Excise duties on third party and inter-company transactions in country and across borders?
- Do I intend to deploy staff into Uganda and want to know how best to manage the tax cost on the company and the expatriate?
If your answer is YES to any or all the above questions, then you should consider hiring a Uganda Tax Consultant.
What to look out for in your prospective Uganda Tax Consultant
- whether they can assist you in the preparation and filing of income tax returns and advise you on the payment of provisional and final taxes
- Whether they can conduct tax health checks to provide you assurance on compliance with income tax, withholding tax, PAYE, social security, and VAT payments
- Whether they can advise and assist you with tax repayments, negotiate on your behalf with the Uganda Revenue Authority, and apply for waivers of penalties and interest, raise objections to assessments,and provide you the relevant support in case of appeals to the Tax Tribunal.
A good Uganda Tax Consulting Firm should be able to demonstrate a proven track record in those three (3) key areas, especially within Uganda.
Important African Tax News and Tax Information Articles
East Africa Budget Insight
The East African countries once again presented their annual revenue and expenditure estimates simultaneously on 12 June 2008.This is in continuation of now a well-entrenched tradition following the revival of the East Africa Community.The initial three partner states of Kenya, Uganda and Tanzania have now been joined by Rwanda and Burundi although these twocountries have not yet harmonized their fiscal years with the rest of the community. We expect that Rwanda and Burundi will presenttheir 2009/2010 budgets in June 2009. East Africa has just closed a tremendous year from an economic growth perspective. Kenya, Uganda and Tanzania all registeredrobust growth with Uganda topping the growth chart at 8.9%, Tanzania registering 7.0% and Kenya recording 7%. This rapidgrowth is opening up more opportunities for cross-border investments within East Africa and increasing the purchasing power ofthe citizens of East Africa. The Budget Insight 2008/2009 provides an overview of some key economic developments in Kenya, Uganda and Tanzania. We havealso provided an analysis of the main tax measures contained in the various budget presentations that are likely to affect you, yourbusiness and your investments across the region. East Africa is opening up more and more business opportunities through the common market. The Budget Insight should give youa good starting point on some critical issues to consider as you carry on business in East Africa.
Have A Question About Uganda Taxes?
Do you have a question about the Uganda Tax System? Ask the Uganda Tax Guide and other Business travelers who visit our website!
Ask any question about Uganda Taxes and expect an answer from the Uganda Tax Guide or an experienced Uganda Business traveler.
You can ask about how to: acquire a Tax Identification Number, asses the tax you need to pay, benefit from the Uganda tax incentives, withhold your tax, tax compliance techniques and any other Uganda Tax question that you feel you need an answer before starting your business in Africa.
Tax News & Answers to What Other Visitors Have Asked About Uganda Taxes.
Click below to see the Tax questions asked by other visitors and the answers they have got ....!
Heritage Vs Uganda oil case starts in UK
Friday, 2nd September, 2011
The hearing of a case in which Heritage Oil sued Uganda over an oil tax amounting to $404m (about sh1.1 trillion) has started ...
Uganda NGO's and taxation
Question What tax exemptions are NOG's entitled to especially with regard to witholding tax and import duties?
Answer:
The NGO sector in Uganda ...
Witholding tax for short contracts
Question
a. If a company enters into a contract with a consultant and is a) Resident of Uganda b) Nonresident ; at what rate will the Withholding Tax ...
Uganda Oil Tax News
On Monday August 23, at around 9a.m., a delegation met President Museveni at the State Lodge in Jinja. The delegation included Energy Minister Eng. Hilary ...
Withholding Tax in Uganda
Question 1:
Is it possible to reclaim withheld tax?
Answer 1:
Yes it is! Under the following circumstances, you will be able to reclaim withheld ...
Taxpayers Vs. Tax Authorities.
Question:
What Do Uganda Taxpayers Want from the Uganda Revenue Authority?
Answer:
I think Uganda taxpayers demand similar qualities from Uganda ...
Uganda Tax Incentives
Question. What are tax incentives?
Answer. A tax incentive in simple terms can be described as a tax holiday; a temporary reduction or elimination ...
Annual compliance requirements of applicable laws for Ltd/Pvt. Ltd. Company
Question:
Please let us know the annual compliance requirements for foreign Limited / Private Limited companies in manufacturing activities in Uganda ...
Tax planning in Uganda
Question:
What are factors considered when carrying out tax planning?
Answer:
Tax planning is essentially the systematic analysis of the differing ...
Heritage Oil Loses USD30M Uganda Tax Appeal
Not rated yet
14-Nov-2011
Heritage Oil and Gas is to pay USD30 Million as assessed tax by the Uganda Revenue Authority (URA) according to the ruling of the Tax appeals ...
Uganda Revenue Authority wins Tax Case against Heritage Oil
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24-Nov-2011
Uganda Revenue Authority has won a case against Heritage Oil and Gas Limited after the Tax Appeals Tribunal yesterday dismissed the oil ...
Stop tax exemptions, IMF urges Uganda Government
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25-08-2011
The International Monetary Fund has urged Uganda Government to do away with tax exemptions next financial year to maintain a steady economic ...
Uganda Business CEOs taken through new Transfer pricing Regulations and and EAC Double Taxation Agreement
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Uganda Revenue Authority has held the second consultative business forum to discuss implementation of the new transfer pricing regulations and Double Taxation ...
Importing precious metals into Uganda
Not rated yet
Question:
Our company in Uganda wants to import precious metals into Uganda and want to find out what duty is payable.
Answer:
Hello Vincent, I think ...
Taxes hindering Uganda Internet penetration
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Tuesday, 27th September, 2011
The sale of internet and non-internet enabled phone devices in Uganda is curtailed by excise duty and value added tax ...
Uganda Parliament Reduces Tax on Sugar and Fuel
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Wednesday, 7th September, 2011
The Uganda Parliament on Tuesday passed a Bill exempting excise tax on paraffin, and reducing tax on sugar by Sh25....
MTN Uganda and URA Tax Row
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Wednesday, 31st August, 2011
A whistleblower and the Uganda Revenue Authority continue to wrangle over how much he should be paid for exposing tax avoidance....
Uganda Revenue Authority trains Central Equatorial tax officers
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Wednesday, 31st August, 2011
The Uganda Revenue Authority (URA) has passed out the first batch of the Central Equatorial State –Revenue Authority ...
Oil pushes Uganda Tax law amendment
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Friday August 26, 2011
The Uganda income tax law is to be amended to enable the Uganda Revenue Authority (URA) prepare for the commercial production ...
Uganda Revenue Authority leading change in the economy by changing Tax Collection Tactics
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Monday August 22, 2011
THE Uganda Revenue Authority (URA) has lurched onto a new way to collect income tax. Starting June, URA took advantage of property ...
Uganda Manufactures hail removal of sugar tax
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Thursday, 11th August, 2011
Kaddu Kiberu, the Uganda Manufacturers’ Association chairman, has said the scrapping of the 25% import duty on sugar by ...
IMF boss calls for indirect tax assessment methods in Uganda
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Thursday, 11th August, 2011
IMF senior representative Thomas Richardson has in the past spoken out about the need to review tax exemptions. He told ...
Uganda Government hires sh11b lawyers to defend oil Tax case
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Thursday August 11, 2011
The Uganda Government has hired an external lawyer at sh11b to defend it in the Heritage Oil case lodged in London, MPs heard ...
Uganda Real estate dealers decry high taxes
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Wednesday August 10, 2011
Uganda Real estate dealers and developers in Kampala have asked the Government to sensitise the public on the taxes levied ...
Uganda Revenue Authority and NSSF in sh13b row
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Monday, 8th August, 2011
UGANDA Revenue Authority (URA) has not remitted workers’ contribution to the National Social Security Fund (NSSF) amounting ...
Uganda Tax Body in Real Estate Tax Dispute
Not rated yet
Friday, 5th August, 2011
The Uganda Government lost taxes worth sh100m in a transaction in which city businessman Hassan Basajjabalaba sold Uganda Broadcasting ...
Uganda Tax Whistleblower petitions Parliament over sh4.1b
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Wednesday, 3rd August, 2011
An informer, who leaked information on a leading telecom company that was evading taxes worth sh4.8b, has petitioned Parliament,...
Heritage seeks Uganda tax claim halt
Not rated yet
Saturday July 30, 2011
London-listed Heritage Oil has applied to Uganda's Tax Appeals Tribunal to stay the hearing of its tax dispute with government ...
Uganda Revenue Authority trains officers on tax oil
Not rated yet
Wednesday June 22, 2011
Uganda Revenue Authority legal officers have been trained in international income and petroleum taxation.
This was aimed ...
Impact of maize tax cut on Uganda
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Thursday June 16, 2011
YOHANA Lugya, a farmer in Kayunga said that his dirty maize has cost him many customers.
He was forced to move to Mukono ...
Uganda Tax consultants speak out on budget
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Wednesday June 15, 2011
PRIVATE sector and donor group leaders have cautioned that allocations to major projects like the multibillion Karuma project ...
Tax exemption on software boosting technology growth
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Thursday May 19, 2011
Information and Communication Technology (ICT) companies operating in Uganda are attributing the fast growing technology uptake ...
I want to start a import and retail bussiness of automobile spareparts
Not rated yet
Question: what is the system of taxation both for import and retail business for this type of investment?
Answer:
There are two types of importation:...
Which goods does Uganda Revenue Authority exempt from taxation?
Not rated yet
Wednesday, 27th April, 2011
Since the economic situation started biting hard with the value of money declining and buying fewer items, many have been ...
Withholding tax Exempted list of goods and Services?
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Question: How can I get a list of exempted materials/good and services?
Answer:
Withholding tax is a form income tax and is deducted at source ...
Tax on educational equipment?
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Question: I work with the Department of Electrical Engineering at Makerere University. I am trying to procure some equipment for our department laboratories....
Uganda Tax Compliance
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Question: what are the compliance statistics for business organization in Uganda and what could be the probaby cause of low compliance?
Answer:
Hello ...
Who is to withhold tax?
Not rated yet
Question: Who is to withhold tax?
Answer:
Withholding tax is deducted from a payment (income) to a payee.
The person who makes the payment is ...
Uganda Tax System: Is it fair?
Not rated yet
Question:
Do we have a fair taxation system in uganda? please explian if we do.
Answer:
Well, I would think the fairness of our tax system would ...
Uganda Tax News - Tax Body Accused Of Aiding Evasion of Taxes
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This Uganda Tax article that appeared in The Red Pepper, one of Uganda's Daily Newspapers, illustrates how aggressive you need to be when handling ...
Used Clothes Tax
Not rated yet
Question:
What tax is charged on used clothes bales?
Answer
I would think that Used clothes are subject to import duty since they are normally ...
Uganda Company Shares
Not rated yet
Question:
Is it required by law that i allocate part of my company shares to a local citizen working for me as a manager to be able to get a trade ...
PAYE penalties in Uganda
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Question:
What are the penalties regarding non compliance to withholding Pay As You Earn (PAYE)?
Answer:
A withholding agent who fails to withhold ...
Uganda Tourism Investment Guide
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