When I got a loan from one tele-communication Company, at paying back the amount they lent me, I paid an amount inclusive of interest to that tele- communication company. Does URA tax the interest I paid to the company that lent me the money?

Dear Reader,

Interest income earned by a telecommunication company from providing fintech services involving money lending to subscribers is taxable and the telecommunication company is required to account and pay tax on the interest income earned.

I Registered a business some time back. I have been struggling to keep it afloat, but things did not work out well. I later closed the business. I plan to re-open once again. Will I still be liable to pay the outstanding taxes? Because URA has been sending me reminders to pay.

Dear Reader,

We empathize with you about the collapse of your business.

In spite, of your current situation, you remain a registered taxpayer whose source of income is business income, and as such are obliged to file returns and, in the circumstances, you may file NIL returns since you are not having any business transactions.

Notwithstanding the above, we note that the TIN has already accumulated income tax liabilities and if you are not in agreement with the tax assessed, you may object and provide relevant documents to support your objection. Kindly visit the nearest URA service center and our team will assist you go through the objection process. Where submitted evidence is satisfactory, the assessment will be set aside. Where the evidence submitted is not satisfactory, the liability will be upheld and you will be required to settle the taxes.

You may also take advantage of the current waiver of interest and penalty outstanding as at 30^th June 2025 where the principal tax is paid by 30^th June 2027.

Where a business has closed, we advise that you pay any outstanding tax and thereafter request for temporary deactivation of the TIN until you are able to resume business.

If I win a court case, and I am paid damages/compensation, Is that money taxable?

Dear Reader,

A compensation payment derived by a person from a court case takes the character of the item being compensated. For example, if an employee sues their employer for unlawful dismissal and court orders the employer to pay the employee for lost earnings. The lost earnings take the character of employment income and attract tax which the employer has to deduct from the payment to the employee and remit to URA as Pay As You Earn (PAYE).  However, where court awards the employee damages resulting from for example emotional distress or physical pain and suffering then such compensation is not taxed.

I am a trader dealing in perishable items, like fruits and vegetables. What has Government done to support my sector, amidst the challenges I get to keep the items fresh, as I deliver them to my clients?

Dear Reader,

Under the current legal framework, importation of refrigerated trucks and refrigerated trailers is exempted from taxes. This was meant to reduce the cost of acquisition of such vehicles to clients that deal in vegetables and fruits.

In addition, where the perishables have gone bad resulting in a loss, you may claim the loss as a deduction for income tax purposes.

When Government was implementing the Trade Order arrangement in the different parts of Uganda, a number of traders were chased away from the streets, Didn’t Government need to Refund them the taxes they had paid prior?

Dear Reader,

The Trade Order implemented by the Government is aimed at reorganizing the conduct of trade, decongesting the Central Business District, and ensuring that business operations are conducted in designated and lawful spaces.

This intervention has already yielded visible and measurable gains like improved sanitation, enhanced public safety, increased accessibility of roads and walkways, and a more orderly business environment.

However, the implementation of the trade order may have caused disruption to some businesses resulting in lost revenue. Where at the end of the financial year, such businesses realise that they paid more tax than what was due they may apply for a refund of the excess tax paid.

Taxation on 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 East African Community Customs Management Act (EACCMA), 2014 provides an exemption in respect to personal effects including motor vehicle of returning residents. However, the following conditions must be met;

• 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 motor vehicle is required to be within Uganda not later than 90 days after the return of the resident person.

Please note that a returning resident shall benefit from tax relief on only one motor vehicle.

Lack of Transparency in Customs Valuation:

Importers have long requested that URA provide publicly accessible, standardized customs values to enable better planning and budgeting. Why has this not yet been implemented? Could URA publish clear valuation guidelines to improve transparency and reduce disputes at points of entry         

Dear Reader,

URA has a data base for harmonized customs values that are reviewed on a quarterly basis in line with the General Agreement on Tariffs and Trade (GATT) to which Uganda is a signatory.

The values have been published on the URA web portal, www.ura.go.ug   and may be accessed by selecting Tax Education, then Customs valuation and then Revised General Goods Database to assist importers make informed decisions.

Please note that these published values are indicative and therefore will not supersede the valuation principle of “price paid or payable.’’

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