1. What is the waiver all about?

Dear Reader,

Following the COVID 19 pandemic, which adversely affected many businesses, the Government of Uganda instituted several measures to support the recovery of the affected businesses. One such measure is waiver of interest and penalty outstanding as at 30^th June 2024 where a taxpayer pays the outstanding principal tax by 30^th June 2026.

Please note that where a taxpayer pays part of the principal tax outstanding as at 30^th June 2024 by 30^th June 2026, the interest and penalty shall be waived on a pro-rata basis.

2. Taxation of Political Campaign Materials:
   Political posters and advertisements are displayed in large volumes across the country, especially during campaign periods. Does URA tax the printing or display of these materials? If not, why are they exempt, considering that politics has increasingly become a business venture with significant funding?

Dear Reader,

Entities involved in the business of printing, advertising and supplying campaign materials including posters, t-shirts, reflector jackets etc. are required to account for taxes in accordance with the law.

The taxes payable include Income Tax which is computed on gross income (in case of a presumptive taxpayer) or profit (where a person is required to prepare books of account and file returns), and VAT which is charged on a taxable supply made by a person registered for VAT.

Please note that no income is earned by politicians from the mere display of their posters and therefore the politicians are not liable to pay taxes on such display.

3. Taxation on Re-imported Personal Vehicles:
   If a Ugandan citizen is returning home with a vehicle they have been using abroad for personal purposes, what taxes or duties will be charged upon importation? Is there a tax relief option for returning residents?

Dear Reader,

The current legal framework provides tax relief to returning residents in respect to personal effects. In Uganda, the following conditions must be met for a person to benefit from the relief:

• In the case of a motor vehicle, the returning resident must have owned and used the motor vehicle for at least 12 months and the vehicle should have been registered in the name of the returning resident;
• The returning resident’s stay in the foreign country should not have been interrupted within the 12-month period;
• The personal effects are required to be within Uganda not later than 90 days after the return of the resident person.

Please note that personal effects are restricted to only (1) one item per category, i.e. 1 Television Set, 1 motor vehicle, 1 washing machine etc.

4. What taxes is a hotel owner required to be registered for?

Dear Reader,

Upon commencement of the business, a person is required to register and account for applicable taxes with Uganda Revenue Authority.

In the case of hotels, the following taxes may apply: 

• Income Tax: This is tax on profit generated by a business entity which may be taxed under the Individual tax rates (where the business is owned by an individual) or at corporation tax rate (where the business is operated as a company). Income tax is accounted for on an annual basis;
• Pay As You Earn (PAYE): This is deducted at source from the salaries and allowances of employees. Where the business is operating as a company, the director(s) may account for tax on their salary through the PAYE collection mechanism. However, where the director(s) has other sources of income, they will be required to account for their income through filing Individual Income Tax returns.

An employer is required to account for PAYE monthly through a PAYE return and remit the taxes due by the 15^th of the following month.

• Value Added Tax (VAT): The business will be required to register and account for VAT where the value of taxable supplies in 3 consecutive calendar months exceeds UGX 37.5m. VAT is accounted for monthly by the 15^th of the following month.

5. Small Construction Companies – Designated Withholding Tax (6%) Issue:

Construction companies designated to withhold 6% tax face rejection from suppliers who claim the deduction is more than their profit margin. In cases where suppliers refuse, the tax is still paid under the supplier’s TIN. Can the payer be allowed to credit that amount or redirect it? There’s also concern about unfair competition when only some bidders are designated agents.

Dear Reader,

Designation of taxpayers as withholding tax agents is the mandate of the Honorable Minister of Finance, Planning and Economic Development. Where one is designated to withhold tax, it is advisable to deal with suppliers who are compliant or those who have withholding tax exemption.

It is improper for a person to pay the full amount and yet the payee is the person who benefits from the tax withheld. Unfortunately, the law only recognizes the TIN of the supplier in the above scenario, thereby benefitting from a tax credit not paid by themselves.

URA will continue to sensitize the public about withholding tax being an advanced tax paid by the payee.

6. What is expected of any registered person [TIN] at this time of the year 31^st December?

Dear Reader,

A person registered for taxes is required to file a return and pay any resultant tax by the due date.

The following income tax (including rental) obligations are due by 31^st December 2025:

• Filing a final income tax return and payment of final income tax by an individual and a non-individual for the period 1^st July 2024 to 30^th June 2025;
• Filing a provisional income tax return by a non-individual for the period 1^st July 2025 to 30^th June 2026;
• Filing a provisional income tax return by an individual for the period 1^st October 2025 to 30^th September 2026;
• Payment of provisional income tax for individuals:
• 1^st installment if your accounting date is 30^th September;
• 2^nd installment if your accounting date is 30^th June;
• 3^rd installment if your accounting date is 31^st March;
• 4^th installment if your accounting date is 31^st December;
• Payment of provisional income tax for non-individuals:
• 1^st installment if your accounting date is 30^th June;
• 2^nd installment if your accounting date is 31^st December;

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