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.

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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%]

 

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

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