1- What legal and tax liabilities automatically arise when an individual obtains a TIN, especially for non-business individuals who may not fully understand future obligations?
Dear Reader,
The tax obligations that may arise depend on why an individual obtained a TIN.
An individual engaged in business or earning rental income is required to file his/her tax returns and pay the resulting taxes. Individuals in business will be required to file and pay their Personal Income Tax while those that have Rentals file and pay Rental Income Tax.
An individual earning from a single employer is not required to file a return since his/her employer is required to account for the Pay as You Earn (PAYE) on their salaries.
There are instances where an individual is required to obtain a TIN but may not have the obligation to file a return and pay taxes (unless they are engaged in business or earn rental income). These include where Government is compensating the individual or where the individual is transferring a non-business asset.
Therefore, there are no automatic tax liabilities that arise upon registration however the obligations that may arise will depend on how the taxpayer is registered.
2- Uniform treatment of unequal businesses
Why are businesses with vastly different production volumes, turnover, and capital base subjected to the same digital stamp requirements and costs? Does this not disadvantage startups and small-scale manufacturers?
Dear Reader
It is true that businesses have varying production volumes, turnover and capital bases but they also pay tax rates according to the volumes produced, turnover and capital base. Therefore, the stamp cost incurred will be in relation to the volumes you produce, your turnover and capital base.
Please note that one of the reasons Tax stamps were introduced was to help create fair competition in the market. For a startup or small-scale manufacturer to compete fairly in the market they need to have the same standard and requirements as the big players. A consumer will not consider one’s product genuine if it does not have a UNBS permit or a tax stamp. The Tax stamp provides surety in the market.
3- Penalty waivers and relief.
Why doesn’t URA expand the use of penalty and interest waivers for first-time or historically compliant taxpayers as a way of encouraging voluntary compliance?
Dear Reader,
Tax waivers are time bound and are designed to provide relief to taxpayers who are willing to comply but are financially constrained.
The Government of Uganda realized that a number of businesses are still struggling after the COVID 19 pandemic. The current waiver was enacted to provide relief from payment of interest and penalty outstanding as at 30th June 2024 to taxpayers who pay the principal tax by 30th June 2026.
URA is only mandated to administer the waiver in accordance with the law and is constrained to extend the period to which the waiver applies.
4- Withholding tax flexibility.
Are there installment or deferred payment options for withholding tax?
Dear Reader,
Yes, the Commissioner may approve a request from a taxpayer to pay withholding tax or any other domestic tax in instalments where the taxpayer provides justification.
Effective 1st February 2026, to apply for instalments you are required to follow the procedure below:
- Log in to your TIN account on the URA portal at ura.go.ug;
- Under e-services, select “apply to pay tax in instalments;
- Select the basis of instalment and the tax type;
- Fill in the instalment amount,
- amount to be paid as a down payment,
- number of instalments
- start date to generate the instalment payment schedule;
5. Click next, upload document(s) if any and indicate the reason why you are applying for the instalments, select the declare information box and click submit.
You can use this link: https://ura.go.ug/en/tax-education/ to access the instalment User Guide on the URA portal.
For any assistance, please call our toll-free line 0800217000, email us at services @ura.go.ug or WhatsApp us at 0772140000.
5- Transparency in tax computation
How exactly are different taxes computed, and why is it often difficult for ordinary taxpayers to independently verify URA assessments?
Dear Reader,
Each tax type is computed differently, according to the tax law that defines its administration.
- Income tax – It is based on chargeable income (gross income less deductions allowed). In the case of individual income tax, the rate is progressive from 10% to 30%. Where chargeable income is greater than UGX 120,000,000 per annum, additional 10% is charged on the amount by which the chargeable income exceeds UGX 120,000,000. In the case of companies, the rate is 30% of the chargeable income;
- PAYE – This is applicable to employees and the rate is as above, except that it is computed on a monthly basis. Where chargeable income is greater than UGX 10,000,000 per month, additional 10% is charged on the amount by which the chargeable income exceeds UGX 10,000,000;
- Rental tax – In the case of companies, the tax is 30% of the chargeable income (gross income less deductions allowed). In the case of individuals, the tax is 12% of the gross amount net of UGX 2,820,000;
- VAT- This is a consumption tax borne by the final consumer. The rate is 18% of the value of the supply where the supply is standard rated and 0% where the supply is zero rated. VAT is not applicable where the supply is exempt;
- Local Excise Duty and Stamp Duty have various rates depending on the supply in case of Local Excise Duty and the instrument in case of Stamp Duty.
Taxpayers may use the above information to verify assessments issued by URA. Where a taxpayer is not able to sufficiently verify the assessment, they may visit the nearest URA office or call our toll-free line 0800217000, email us at services @ura.go.ug or WhatsApp us at 0772140000 for assistance.
6- Are there any repercussions when I do not stamp the items I deal in, yet they were gazetted?
Dear Reader,
One of the reasons tax stamps were introduced was to help create fair competition in the market and to provide assurance to a consumer that the product they are buying meets the minimum safety standards.
Where a taxpayer fails to affix a tax stamp or to activate tax stamps, he/she is liable to pay a penal tax equivalent to double the tax due on the goods or 2,500 currency points (UGX 50,000,000) whichever is higher. The same penalty is applicable to a buyer or a person found in possession of unstamped goods.
Please note that you may also be prosecuted and where convicted, sentenced to imprisonment for a term not exceeding one year or a fine not exceeding 1,500 currency points (UGX 30,000,000) or both.
7- If part of the liability on my TIN falls in the period outside the gazetted one for the current waiver 2025/2026, can I benefit from the current waiver?
Dear Reader,
The current waiver provides relief from payment of interest and penalty outstanding as at 30th June 2024 where a taxpayer pays the principal tax by 30th June 2026.
Therefore, the part of the liability that falls outside the gazette period will not benefit from the waiver.
To avoid further accumulation of interest, we advise you to ascertain your full tax liability (what qualifies for the waiver and what does not) and pay accordingly.
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