EXCISE DUTY

Type of incentive

Conditions for granting exemption

Nil duty on construction materials of a factory or warehouse exclusive of those available on the local market, locally produced raw materials and inputs.

Beneficiary: Developers of industrial parks and free zones, operators and other

investors in specified business which include;

·        Manufacture or assembling medical appliances, medical sundries or pharmaceuticals

A minimum capital investment

requirement for duty exemption of

US$10 million in the case of a foreigner

or US$ 300,00 in case of a citizen; or US$150,000, for a citizen whose investment is placed up country.

The business that qualifies for duty

exemption; is required to employ at least

70% of its employees being citizens,

earning an aggregate wage of at least 70% of the total wage bill.

STAMP DUTY

Type of incentive

Conditions for granting exemption

No Stamp duty on debentures, lease of land, Increase of share capital, transfer of land.

Operator within an industrial park or free zone or an operator of a single factory

or other business outside the industrial park who invests in medical appliances

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.

Nil Stamp Duty on debenture,

further charge, lease of

land, increase of share

capital, transfer of land and

agreement to provide

services on

conducting a feasibility study

or developing a design for

construction.

Must invest at least USD 5m.

Develop a hospital at the level of a

national referral hospital with capacity to

provide specialized medical care.

VAT

Type of incentive

Conditions for granting exemption

The supply of drugs, medicines and medical sundries manufactured in

Uganda are zero- rated

Must be manufactured in Uganda

VAT exemption at importation of medicine

For those in the business of importation

No VAT on the supply of feasibility study and design services and on the supply

of locally produced raw materials and inputs.

Investment in manufacturing or

assembling medical appliances, medical

sundries or pharmaceutical. 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 apply 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.

No VAT on supply of

feasibility study, design and

construction services; or the

supply of locally produced

materials; or the supply of

machinery and equipment or

furnishings

and fittings

Must invest at least

USD 5 million. The feasibility study must

be for the development of a hospital

facility; or the construction of hospital

premises and other infrastructure; or

supply of the machinery, equipment,

furnishings and fittings for use in the

hospital facility.

The investment must

be for a hospital at the level of a national

referral hospital with capacity to provide

specialized medical care.

VAT registered persons claim all the VAT incurred.

Turnover of UGX 150m in any 12 months

period for first time registration, ability

to keep proper books of accounts and

making taxable supplies.

Deemed VAT: Tax payable on a taxable supply made by a supplier to a contractor

executing an aid-funded project is deemed to have been paid by the contractor provided the supply is for use

by the contractor solely and exclusively for the aid funded project.

Contractors executing aid-funded projects

INCOME TAX

Type of incentive

Conditions for granting exemption

10 years Exemption of Income derived by a person from undertaking any of the listed business activities in the Industrial Park or Free Zone.

Operator in an Industrial Park or Free

Zone who invests in manufacturing or

assembling medical appliances, medical

sundries or pharmaceuticals.

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 apply 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.

10 years Exemption of Income derived by a person from undertaking any of the

specified business activities.

Investor outside an industrial park or free

zone carrying out activities above.

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 apply 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.

6% WHT exemption

6 months renewable

Where the Commissioner is satisfied that

the taxpayer has regularly complied with

the obligations under the tax laws

Indexation in the calculation of capital gains in order to

account for inflation. Preferential treatment of capital gains tax for a venture capital fund registered under

the Capital Markets Authority Act.

Before determining Capital Gains tax

on a business asset, one will factor in

inflation among others that influence the

asset value. However, indexation shall not

apply to an asset that is sold within twelve

months from the date of purchase.

A venture capital fund shall be entitled

to a non-recognition of a gain or loss

equivalent to the percentage of reinvested

proceeds.

Recognition of losses

If for any year of income, the total business

income earned by a taxpayer is less

than the total expenses relating to the

generation of the business income, the

excess (loss) shall be carried forward and

allowed as a loss in the following year.

Note that it must be declared and proved

by URA in the current year of income as a

loss.

Wear and Tear

Wear and Tear allowance is granted for

assets and equipment’s owned by the

entity and registered in the business

names.

The rates are as provided for in the

Income Tax Act.

Allowable deduction of purchase expense from a supplier designated to use

e-invoicing system

Allowable deduction of purchase expense

from a supplier designated to use

e-invoicing system. These suppliers will be

gazetted and these expenses should be

supported by e-invoices or e-receipts.

100% deduction of Scientific research expenditure

A person who incurs expenditure for

scientific research

100% deduction of training Expenditure

Employers who train permanent residents

or provide tertiary education not

exceeding in the aggregate 5 years

Income tax exemption for Collective Investment Schemes

Must be licensed to operate as a collective

investment scheme. Participants in the

scheme should not have day to day

control over the management of the

property. Participants contributions and

ultimate income/ profits must be pooled

Property must be managed as a whole by

the operator of the scheme.

Double Taxation Agreements (DTA): Investors from countries with active DTA’s with Uganda i.e. United Kingdom, Denmark, Norway, South Africa, India, Italy, Netherlands and Mauritius.

Withholding tax rates applicable to dividends, interests, management fees

and royalties are 10% except UK at 15%

Beneficial owner of investment as defined

in the Income Tax Act established with

economic substance in a country with

which Uganda has a DTA.

HEALTH AND MEDICAL SECTOR

Description

Tax incentive

Any of the following goods engraved or printed or marked with the

hospital logo imported for use in licensed hospitals, as recommended by

the Director of Medical Services subject to such conditions and limitations

as the Commissioner may impose.

a) Shadow less lamps

for use in operating

theaters

Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

b) Blood freezers

• Exempted from all taxes under the 5th schedule of the East African Community Customs Management Act, 2004

c) Kitchen ware and

equipment

• Exempted from all taxes under the 5th schedule of the East African Community Customs Management Act, 2004

d) Laundry equipment

Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

e) Mattresses and line

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

f) Bedside screens

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

g) Air conditioners

• Exempted from all taxes

under the 5th schedule

of the East African

Community Customs Management Act, 2004

h) Water heating

equipment

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

i) Packaging material

for medicines

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

j) Furniture

• Exempted from all taxes under the

5th schedule of the East African

Community Customs Management

Act, 2004

k) Raw materials for

the manufacture of

medicaments

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

l) Examination gloves for laboratory and medical use.

• Exempted from all taxes

under the 5th schedule

of the East African

Community

Customs Management

Act, 2004

m) Hospital furniture imported by dealers for supply to licensed hospitals

• Exempted from excise

duty under the Excise

Duty Act.

n) X-Ray Machines for

medical use. An X ray machine means an electrically powered device producing x rays for the irradiation of a

human being or an animal for a therapeutic or

diagnostic purpose or for industrial use

• Exempted from VAT

under the VAT Act.

Import duty is 0% under

East African Community

Common External Tariff.

o) Chemical Analyzers for blood analysis.

A blood chemistry analyzer may be used to test for many things, such

as blood cell counts,

therapeutic drug monitoring, illegal drug use, blood typing

• Exempted from VAT

under the VAT Act.

Import duty is 0% under

East African Community

Common External Tariff.

p) Packaging material for

medicines

• Exempted from all taxes under the 5th schedule of the East African Community Customs Management Act, 2004

q) Medical Autoclaves. A

medical autoclave is a

device that uses steam to

sterilize equipment and

other objects. This means

that all bacteria, viruses,

fungi, and spores are

inactivated

• Exempted from VAT under the VAT Act. Import duty is 0% under

East African Community Common External Tariff.

r) Ophthalmic

instruments and

appliances. This device is

used to examine the eye.

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

s) Dental drill equipment A dental drill or dentist’s drill is a small, highspeed drill used during dental procedures, usually to remove decay and shape tooth structure prior to the insertion of a filling or crown. A dental drill may also be used in the cleaning and shaping of root canals during endodontic treatment, or to remove old or temporary filling s or crowns prior to the insertion of new or permanent restorations.

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

t) Ultrasound machinery

An ultrasound machines

makes images so that

organs inside the body can be examined. The machine sends out high- frequency sound waves, which reflect off body structures. A computer receives the waves and uses them to create a picture. The test is done in the ultrasound or radiology department.

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

u) Syringes A medical device that issued to inject fluid into, or withdraw fl fluid from, the body. A medical syringe consists of a needle attached to a hollow cylinder that is fi fitted with a sliding plunger.

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

v) Cardio graphic machine A machine for recording the beating of the heart.

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

Wheel chairs A wheelchair is a manually operated

or power- driven device designed primarily for use by an individual with a mobility disability for the main purpose of indoor,

or of both indoor and outdoor, locomotion.

• Exempted from all taxes under the 5th schedule of the East African Community Customs Management Act, 2004.

Crutches Medical

Definition of Crutch.

Crutch: A wooden or metal vertical prop that helps support a disabled person while he or she is walking. Arm crutches typically are metal and have a single shaft with a projecting handgrip and a cuff that closes around the arm. Crutches usually have a non-skid rubber tip on the bottom

• Exempted from all taxes under the 5th schedule of the East African Community Customs Management Act, 2004.

Artificial parts of the body

(teeth, leg s, joints).

Dentures, (also known as

false teeth), are prosthetic

devices constructed to

replace missing teeth;

they are supported by the

surrounding soft and hard tissues of the oral cavity. Conventional dentures are removable (removable partial denture or complete denture.

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

A prosthesis is an artificial device/substitute or that

replaces a missing body part such as tooth, leg, arm, knee, facial bone, another joint, hip etc which may be lost through trauma, disease, or congenital conditions

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

Hearing aid.

A hearing aid is a small

electronic device that

you wear in or behind

your ear. It makes some

sounds louder so that a

person with hearing loss

can listen, communicate,

and participate more fully

in daily activities A hearing aid can help people hear more in both quiet and noisy situations

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

Medicated cotton wool

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

Medical bandage

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

Refrigeration equipment

for dead bodies for use

in Hospital, city council or

funeral home.           

• Exempted from all taxes under the fifth schedule of the East African

Community Customs Management Act, 2004.

Motor boat ambulance

• Import duty is 0% under East African Community Common External Tariff and exempted from VAT