The taxes applicable to agro processing industry include the following;
Small Business/ Presumptive tax.
This is a tax charged on businesses whose annual sales exceed UGX 10, 000,000 but below UGX 150,000,000.
It’s a tax imposed on non-individual players in the sector at a standard rate of 30%.
Value Added Tax (VAT).
VAT is a consumption tax charged at a rate of 18% on all supplies made by taxable persons i.e. persons registered or required to register for VAT purposes. The threshold for VAT registration is an annual turnover of over 150 million, or 37.5 million in the first 3 consecutive months. Click here to register for VAT
Please note: All VAT registered taxpayers are obliged to register for EFRIS and issue e-invoices. Click here for information on how to register for EFRIS
LOCAL EXCISE DUTY
This is a tax that is imposed on specified imported or locally produced goods, and services such as beer, non-alcoholic beverages, cooking oil, etc.
Click here for applicable excise duty rates
Please Note: Some companies in the Agro processing industry are required to have digital tax stamps.
A digital tax stamp is a marking that applied to goods or their packaging and contains; security features and codes to prevent counterfeiting of goods and enable track and stress capabilities. Goods that should have digital tax stamps include; all excisable goods like wines, spirits, water, cigarettes, beers, soda, sugar, cooking oil, fruits and vegetable juices, any other alcoholic, non-alcoholic and fermented beverages. These goods are not allowed on the market without tax stamps.
Click here for more information on Digital Tracking Solution (DTS)
Withholding tax (WHT) is an income tax that is withheld at source by one person (withholding agent) upon making payment to another person (payee). If an agro processor supplies goods above 1 million, the person to whom those goods are supplied charges withholding tax at a rate of 6%. The plant receives a Tax Credit Certificate that helps in offsetting tax liability in the final income tax return.
Click here for information on Withholding tax.
Please note: The tax withheld is credited/ reduced on the tax payable in the final income tax return.
Pay As You Earn (PAYE)
This tax applies to a sector player who has employees (administrative or causal laborers) that earn an aggregate in excess of Ugx. 235,000 per month. This form of tax is withheld every month.
Click here for the PAYE rates