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Overview of Agricultural Sector

The Agricultural sector comprises of various components including crop farming, livestock farming, poultry farming, horticulture, fish farming and Agro-processing. 

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  • In case you need to register a name for your agricultural business, you can visit Uganda Registration Services Bureau (URSB).
  • You will be issued with a Certificate of incorporation if you register a company or a certificate of registration if you register a business name.
  • Players in the sector that plan to open physical offices, should secure a trading license from KCCA / Municipal council

Please note:

Upon registration, the farmer is required to comply with the requirements of the Ministry of Agriculture, animal industry and fisheries.

For individual

  • National ID
  • Certificate of registration

For non-individual

  • Company Form 20
  • Certificate of incorporation

Click here  for details on requirements for registration

 

 

As a taxpayer, you’re entitled to rights. However, there are obligations that you must fulfill.

Click here  for your rights as a taxpayer.

Click here  for your obligations as a taxpayer.

A business has to keep records relating to all its transactions. It is important to always have records that are dated so that you can understand which reports relate to what period. These include;

  • Record of income realized in a given year
  • Record of receipts / invoices and payments
  • Record of vaccination details
  • Record of debtors and Creditors
  • Payroll for your employees if applicable
  • Import schedules if applicable
  • Contracts for supply
  • Bank statements
  • Utility bills
  • Stock records
  • Asset registers

It is very important for taxpayers to;

  • keep proper records of all business transactions in the English language.
  • keep records such that it is easy to determine their tax liability.
  • keep records for five years after the end of the tax period to which they relate for future reference.
  • In case a record is necessary for a proceeding that started before the end of the 5-year period, a taxpayer shall keep the record until the end of the proceedings.
  • The records kept should contain sufficient transaction information and should be saved in a format that is capable of being recovered and converted to a standard understandable record format.
  • A taxpayer who wishes to keep records in a different language or currency shall apply in writing with clear reasons to the commissioner for permission.
  • Where a record is not in English, the taxpayer will be required to meet the cost of translation into English by a translator approved by the Commissioner.

Corporation tax

It’s a tax imposed on non-individual players in the sector at a standard rate of 30%.

Income tax

This is a tax imposed on individuals in the sector using the individual rates applicable.

Click here for more information on income tax rates.

Pay As You Earn (PAYE)

This tax will apply to a sector player who has employees (administrative or causal laborers) that earn an aggregate in excess of 235,000 per month. This form of tax is withheld every month.

Click here for more information on PAYE rates.

 

Beneficiary

Incentives

Period of Incentive

Condition for the Tax Incentives

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

NIL stamp duty on agricultural insurance policies

Beneficiary: Agricultural insurance

VAT Exemption on agricultural supplies: animal feeds and premixes, crop extension services, irrigation works and sprinklers, supply of agriculture insurance, etc.

Taxpayers in agricultural sector.

Agricultural sprayers

·       VAT Exempted when imported by dealers under the VAT Act.

·       Exempted from all taxes when imported by persons engaged in agriculture under the 5th Schedule of the East African Community Customs Management Act, 2004.

 

Refrigerated Trucks

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

Customs Management Act, 2004.

Agricultural–Chemicals (fungicides and pesticides)

·       VAT Exempted when imported by dealers under the VAT Act.

·       Exempted from all taxes when imported by persons engaged in agriculture under the 5th Schedule of the East African Community Customs Management Act, 2004.

Fertilizers

A fertilizer is any material of natural or synthetic origin (other than liming materials) that is applied to soils or to plant tissues (usually leaves) to supply one or more plant nutrients essential to the growth of plants

·         Exempted from all taxes under the

·         5th Schedule of the East African

·         Community Customs Management

·         Act, 2004 upon approval by the Ministry of Agriculture, Animal Industry and Fisheries.

Cold Rooms; a cold a room in which a low temperature is maintained (as for refrigeration)

Import Duty is 0% in accordance with the EAC CET. Helps on post-harvest management and cold chain storage of agricultural products such beef, chicken, fish etc

Packing material of any kind designed for packaging goods for export

·       Exempted from all taxes when imported with an intention of packaging goods meant for export, 2004.

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: Operator within the industrial park, free zone or other business outside the industrial park or free zone who invests in commercial farming.

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.

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

Beneficiary: 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 commercial farming.

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 efect 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.

Packing material of any kind designed for packaging goods for export

·       Exempted from all taxes when imported with an intention of packaging goods meant for export.

Mixed components such as eggshells, feed additives, wheat bran, maize bran, concentrates and seed cake, animal feeds and premixes, crop extension services, irrigation works and sprinklers, supply of agriculture insurance, etc.

 

·       VAT exemption on agricultural supplies:

·       VAT exemption on liquified gas and denatured fuel ethanol.

 

For more information, visit the nearest URA office for assistance or call the toll-free line 0800117000/0800217000 or WhatsApp: 0772140000

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