INCOME TAX

Beneficiary

Incentives

Period of Incentive

Conditions for the Tax Incentive

Private employers of  persons with disabilities (PWDs)

Deduction of 2% Income tax for employers that employ PWDs

Indefinite

5% of employees must be PWDs

Compliant taxpayers

6% WHT exemption

12 months renewable

Where the Commissioner is satisfied that the taxpayer has regularly

complied with the obligations under the tax laws

All taxpayers

100% deduction of Scientific research expenditure

Indefinite

A person who incurs expenditure for scientific research

All taxpayers

100% deduction of training expenditure

Indefinite

Employers who train permanent residents or provide tertiary education not exceeding in the aggregate 5 years

Investment in establishing or operating vocational or technical institutes.

No VAT on the supply of feasibility study and design services and on the supply of locally produced raw materials and inputs.

Indefinite

Must invest a minimum of USD 10m for foreign investors and USD 300,000 for EAC citizens or USD 150,000 where the investment is made upcountry. Incentive takes effect from the date of commencement

of the specified business, same incentives applies to an existing operator in an Industrial Park or Free Zone.

The investor must use at least 70% of locally sourced raw materials and employ at least 70% EAC citizens who must take up at least 70% of the wage bill.

The investor must use at least 70% of locally sourced raw materials subject to their availability, capacity to employ at least 70% EAC citizens who must take up at least 70% of the wage bill.

Suppliers of educational materials

Zero rating of supply of educational materials.

Indefinite

Includes educational materials manufactured in Uganda and the partner states of the  EAC

EDUCATION AND SPORTS SECTOR

Description

Tax incentive

Educational materials. Annex D to the Florence Agreement Scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research, provided:

That such scientific instruments or apparatus are consigned to public or private scientific or

educational institutions approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles, and used under the control and responsibility of these institutions;

• That instruments or apparatus of equivalent scientific value are not being manufactured in the country of importation.

Please take note that this is an excerpt of the main text. You are encouraged to look at the whole text for the relevant provision applicable to the goods you have imported.

•  All approved educational articles and materials as specified in the Florence agreement are tax-exempt under the fifth schedule of the East African Community Customs  Management Act

Educational material

•     Treated as zero-rated item for VAT purposes i.e. text books

Mathematical sets & geometry sets used in educational services

•     Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff

Woodworking machines

•     Exempted from VAT under the VAT Act.

Import duty is 0% under East African Community Common External Tariff

Welding machines

•    Exempted from VAT under the VAT Act.

Import duty is 0% under East African Community Common External Tariff

Sewing machines

•     Exempted from VAT under the VAT Act.

Import duty is 0% under East African Community Common External Tariff

Crayons, coloured pencils, lead pencils, rulers, erasers, stencils, technical drawing sets, educational computer tablets, educational computer applications or laboratory chemicals for teaching science subjects used in educational services.

• Exempted from VAT under  the VAT Act.

Textbooks

•     Exempted from VAT under the VAT Act.

Import duty is 0% under East African Community Common External Tariff

Bible

•     Exempted from VAT under the VAT Act.

Import duty is 0% under East African Community Common External Tariff

Qur’an

•    Exempted from VAT under the VAT Act. Import duty is 0% under East African Community Common External Tariff