Withholding tax Exempted list of goods and Services?

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 by the person effecting a payment to another.

The person withholding the tax is called the withholding agent and the recipient of the payment after the deducting the tax is the payee.

According to the Second Schedule of the VAT Act Cap 349 some of the exempt supplies are;

1. Unprocessed foodstuffs


2. Petroleum fuels (petrol, diesel and paraffin) subject to excise duty


3. Financial and insurance services


4. Medical, dental and nursing services


5. Social welfare services


6. Educational services


7. The supply passenger transportation services other than tour and travel operators


8. Computers, printers and software


9. The supply of betting, lotteries and games of chance


10. The supply of goods as part of the transfer of a business as a going concern by one taxable person to another taxable person


11. The supply of burial and cremation services


12. The supply of postage stamps


13. The supply of precious metals and other valuables to the Bank of Uganda for the State Treasury


14. The supply of unimproved land


15. The supply by way of lease or letting or immovable property other than




• a lease or letting of commercial premises


• a lease or letting of hotel or holiday accommodation


• a lease or letting for periods not exceeding three months




• a lease or letting for parking or storing cars or other vehicles


• a lease or letting of service apartments




16. The supply of feeds for poultry and livestock


17. The supply of veterinary equipment and supplies


18. The supply of machinery used for processing of agricultural or dairy products


19. The supply of milk, including milk treated in any way to preserve it

Accordingly the Third Schedule of the VAT Act provides for zero rated supplies,
whereby a zero rated supply is a taxable supply on which the applicable VAT rate is 0% as compared to the standard rate of 18%.

Zero rated supplies include;

1. Goods and services exported from Uganda (i.e. goods delivered to an address or services consumed outside of Uganda as evidenced by documentary proof acceptable to the Commissioner General).


2. International transport of goods or passengers by road, rail water or air from a place outside Uganda to another place outside Uganda where the transport or part of the transport is across the territory of Uganda; or from a place outside Uganda to a place in Uganda; or from a place in Uganda to a place outside Uganda.


3. Drugs and medicines


4. Educational materials


5. Seeds, fertilizers, pesticides and hoes


6. Cereals grown, milled or produced in Uganda