Overview of the education

Education is the transmission of knowledge, skills, and character traits through formal or informal methods. In Uganda, formal education is acquired through academic institutions, i.e., primary schools, secondary schools, technical institutions, and universities.

Education services, as a term, means education provided by:

a pre-primary, primary, or secondary school
a technical college or university
an institution established for the promotion of adult education, vocational training, technical education, or the education of training of physically or mentally handicapped persons

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Government-aided institutions.

Pay As You Earn (PAYE) from employees
Withholding tax (WHT) from suppliers and professional services

Privately owned institutions

Corporation tax from the institution
Individual Income tax from directors
Pay As You Earn (PAYE) from employees
Withholding tax (WHT) from suppliers and professional services

All businesses in Uganda are required to register with the Uganda Registration Service Bureau (URSB) to formalize their legal status.

Upon registration, education services’ entities are required to comply with the requirements of statutory bodies like:

Ministry of Education and sports to get an operational license
KCCA/Local government for a trading license
Registration with URA for taxes (acquiring a TIN)
National Council for Higher Education (NCHE) for accreditation of institutions of higher learning

For individual

National ID or any other two of the following valid identification documents; Passport, Driving permit, Voter’s card, Village ID, Employment ID, Refugee ID, recent Bank statement, Work permit, financial card, Visa, NSSF card etc.
Certificate of registration (incase you are in business)
Statement of particulars and partnership deeds (incase of a partnership)

For non-individual

Company Form 20
Certificate of incorporation

Click here for details on requirements for registration

You’re required to visit the URA portal on ura.go.ug
Click here to register as an individual
Click here to register as a non-individual

As a taxpayer, you are entitled to your rights. Equally, there are obligations you must fulfil.

Click here for your rights as a taxpayer.

Click here for your obligations as a taxpayer.

Government-aided institutions.

Pay As You Earn (PAYE) from employees
Withholding tax (WHT) from suppliers and professional services

Privately owned institutions

Corporation tax from the institution
Individual Income tax from directors
Pay As You Earn (PAYE) from employees
Withholding tax (WHT) from suppliers and professional services

Income tax

Any person dealing in education services business is required to be registered for income tax. Income tax applies generally to all types of persons who derive income, whether an individual, company, partnership or trust.

Corporation tax. This is tax payable by non-individuals at a standard rate of 30% of profits earned.

Rate of tax for Resident individuals

Click here for individual income tax rates

Pay As You Earn (PAYE)

Any person dealing in education services business and offers employment is required to be registered for Pay As You Earn (PAYE). This tax can be withheld from both teaching and non-teaching staff who earn above UGX 235,000.

Please note: Each employee must register for taxes i.e. acquisition of a TIN

Click here for PAYE rates for both resident and non-resident persons.

Withholding tax (WHT)

Withholding tax (WHT) is a form of income tax and is withheld at source by a designated withholding tax agent upon making payment to another person (payee). If an education institution receives supplies exceeding UGX 1,000,000, it is required to withhold at source at a rate of 6% which is later remitted to URA.

Please note: Each supplier has to be registered for taxes, i.e. acquisition of a TIN

Click here for more information on Withholding tax.

Value Added Tax (VAT)

Note: Education services are VAT-exempt supplies. This implies that education services are not viable.

Click here for more information on VAT

These returns are filed like any other Income tax returns

Click here for information on how to file your returns.

After filing a return, you’re required to pay the resultant tax using any of the available payment platforms e.g. banks, mobile money, EFT, RTGS, VISA, Mastercard, USSD code (*285#) etc.

Please note: the due date for payment of tax is the same as that of return filing.

INCOME TAX
Beneficiary	Incentives	Period of Incentive	Conditions for the Tax Incentive
Private employers of persons with disabilities (PWDs)	Deduction of 2% Income tax for employers that employ PWDs	Indefinite	5% of employees must be PWDs
Compliant taxpayers	6% WHT exemption	12 months renewable	Where the Commissioner is satisfied that the taxpayer has regularly complied with the obligations under the tax laws
All taxpayers	100% deduction of Scientific research expenditure	Indefinite	A person who incurs expenditure for scientific research
All taxpayers	100% deduction of training expenditure	Indefinite	Employers who train permanent residents or provide tertiary education not exceeding in the aggregate 5 years
Investment in establishing or operating vocational or technical institutes.	No VAT on the supply of feasibility study and design services and on the supply of locally produced raw materials and inputs.	Indefinite	Must invest a minimum of USD 10m for foreign investors and USD 300,000 for EAC citizens or USD 150,000 where the investment is made upcountry. Incentive takes effect from the date of commencement of the specified business, same incentives applies to an existing operator in an Industrial Park or Free Zone. The investor must use at least 70% of locally sourced raw materials and employ at least 70% EAC citizens who must take up at least 70% of the wage bill. The investor must use at least 70% of locally sourced raw materials subject to their availability, capacity to employ at least 70% EAC citizens who must take up at least 70% of the wage bill.
Suppliers of educational materials	Zero rating of supply of educational materials.	Indefinite	Includes educational materials manufactured in Uganda and the partner states of the EAC

EDUCATION AND SPORTS SECTOR
	Description	Tax incentive
	Educational materials. Annex D to the Florence Agreement Scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research, provided: That such scientific instruments or apparatus are consigned to public or private scientific or educational institutions approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles, and used under the control and responsibility of these institutions; • That instruments or apparatus of equivalent scientific value are not being manufactured in the country of importation. Please take note that this is an excerpt of the main text. You are encouraged to look at the whole text for the relevant provision applicable to the goods you have imported.	• All approved educational articles and materials as specified in the Florence agreement are tax-exempt under the fifth schedule of the East African Community Customs Management Act
	Educational material	• Treated as zero-rated item for VAT purposes i.e. text books
	Mathematical sets & geometry sets used in educational services	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Woodworking machines	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Welding machines	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Sewing machines	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Crayons, coloured pencils, lead pencils, rulers, erasers, stencils, technical drawing sets, educational computer tablets, educational computer applications or laboratory chemicals for teaching science subjects used in educational services.	• Exempted from VAT under the VAT Act.
	Textbooks	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Bible	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff
	Qur’an	• Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff