Business Income
17:04:36The income tax rate for individuals depends on the income bracket in which the individual falls. Resident individuals enjoy a tax-free annual income threshold of UGX. 2,820,000 per annum.
The balance is taxed at 10%, 20% or 30% depending on the income bracket. Individuals who earn above UGX 120,000,000 per annum pay an additional 10% on the income above UGX 120 million.
The basis for determination of the Income tax liability for an individual is the gross income generated reduced by allowable deductions and any income tax paid or withheld at source on the gross Income for that year.
|
ANNUAL CHARGEABLE INCOME (CY) IN UGX |
RATE OF TAX RESIDENTS |
|
0 to 2,820,000 |
Nil |
|
2,820,000 to 4,020,000 |
(CY – 2,820,000UGX) x 10% |
|
4,020,000 to 4,920,000 |
(CY – 4,020,000UGX) x 20% + 120,000UGX |
|
4,920,000 to 120,000,000 |
(CY – 4,920,000UGX) x 30% + 300,000UGX |
|
Above 120,000,000 |
[(CY – 4,920,000UGX) x 30% + 582,000UGX] +[(CY – 120,000,000UGX) x 10%] |
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|
ANNUAL CHARGEABLE INCOME (CY) IN UGX |
RATE OF TAX NON-RESIDENTS |
|
0 to 4,020,000 |
CY x 10% |
|
4,020,000 to 4,920,000 |
(CY – 4,020,000UGX) x 20% + 402,000UGX |
|
4,920,000 to 120,000,000 |
(CY – 4,920,000UGX) x 30% + 582,000UGX |
|
Above 120,000,000 |
[(CY – 4,920,000UGX) x 30% + 582,000UGX] +[(CY – 120,000,000UGX) x 10%] |
This is imposed on all corporate entities (Companies) engaging in business activities.
Income Tax is charged at a rate of 30% of the entity’s chargeable income (gross income less allowable deductions).
|
Sale of goods (clothes, shoes, Poultry, Timber, beans) |
200,000,000 |
 |
|
Add Other income |
|
 |
|
(eg subletting of space for rent) |
39,000,000 |
 |
|
Total revenue from trading |
|
239,000,000 |
|
Less: Costs of goods sold |
|
 |
|
Purchases |
15,000,000 |
 |
|
Direct labor- (sales girl, planting, weeding, feeds) |
14,000,000 |
 |
|
Cost of direct overheads (direct power, water, etc.) |
5,000,000 |
 |
|
Total Production Costs |
|
34,000,000 |
|
Other costs: |
|
 |
|
Less Administrative costs |
|
 |
|
(Worker salaries, office power, Water, rent, etc.) |
16,000,000 |
 |
|
Total costs |
|
50,000,000 |
|
Net Profit/Loss (Chargeable Income) |
189,000,000 |
|
|
Tax at 30% |
56,700,000 |
|
