Uganda Tax Body in Real Estate Tax Dispute

Friday, 5th August, 2011

The Uganda Government lost taxes worth sh100m in a transaction in which city businessman Hassan Basajjabalaba sold Uganda Broadcasting Corporation land at sh22bn.

Documents of the transaction indicate that Habba Group, which sold 23.1 acres on Faraday Road in Bugolobi, a Kampala suburb, stated that M/s Deo and Sons Properties purchased the land at sh12bn.

Instead of paying sh220m out of the 22bn, Habba Group, owned by Basajjabalaba, paid stamp duty of sh120m.

According to regulations, all property transactions involving over sh50m are subject to a 1% tax payable to URA. Such properties include houses, land and cars.

URA acting assistant commissioner for public and corporate affairs, Paul Kyeyune, on Tuesday, said auditors often analyse such transactions and if it’s detected that a company evaded taxes, it must pay the money.

However, Kyeyune said they had not yet received any information regarding the transaction between Basajjabalaba and M/s Deo and Sons Properties.

Like Basajjabalaba, several people have over the years evaded paying stamp duty following transactions involving big sums of money.

It is alleged the purchase of the land by Habba Group flouted public procurement regulations.

The New Vision