Yes. The Inter-Religious Council of Uganda, an affiliate of the World Council of Religions for Peace (WCRP) and the African Council of Religious Leaders (ACRL) was established in 2001 to bring together different religious denominations to address issues of common interest. In Uganda, its membership is comprised of Muslims, Orthodox, Catholic, Anglican and Seventh-day Adventists.

According to the Income Tax Act, religious organizations such as churches, synagogues, and mosques are exempted from paying income tax since their object is not for profit. This exemption is however limited to direct earnings such as offertories, tithes, and fundraising collections among others.

If such an institution is operating a business that generates income and deals in taxable supplies or is engaged in import and export, such a business is taxable. Under such circumstances, such businesses are required to register for taxes, file returns, and pay any outstanding taxes attributed to this income.

For an institution to be exempt:

1. A letter of exemption MUST be obtained from the Commissioner General of URA
2. None of the income or assets of which confers, or may confer, a private benefit on any person

Religious-owned businesses are required to visit the URA portal, www.ura.go.ug, and apply either as individuals or non-individuals and obtain a Tax Identification Number (TIN). A TIN is a unique identifier and is issued only once to the applicant.

1. Step-by-Step Registration as a Non-Individual

Step 1: Visit the URA web portal https://ura.go.ug and on the home page, click “Get a TIN”

Step 2: Click ‘TIN Registration – Non-Individual’

Step 3: Select ‘New form’ and under Download template for registration, click ‘TIN Non-Individual’ to download the registration template.

Step 4: Save the downloaded registration template at a preferred location. It is an MS Excel template that must not be renamed.

Step 5: Fill all required fields of the Registration template. Fields labeled with a red asterisk (*) are mandatory fields.

Step 6: After filling in the required fields of the registration template, you need to validate the data by clicking on the VALIDATE button located on the last worksheet (Schedule 4-5). The purpose of the VALIDATE button is to check for completeness, consistency, and accuracy of the provided data.

Step 7: If there is an error, you will be directed to the error page to correct the errors and validate again.

Step 8: If there is no error, select ‘Yes’ from the dropdown list to save this template as an upload file. Save the uploaded file at the desired location.                                                                                                                                                                       Please note; At the point of saving the upload file, do not rename it.

Step 9: Return to the same page on the URA portal where you downloaded the registration template and upload the saved upload file.                                                                                                                                                                           On the same page, download and print the terms and conditions.

Step 10: Click submit. Upon submission, an acknowledgment receipt will be displayed with two buttons at the bottom i.e. Print and print form

• Click ‘print’ to print the acknowledgment receipt.
• Click ‘print form’ to print the filled application form.

Please take note of the reference number and search code that are indicated on the e- acknowledgment receipt, as you will use them to check the status of the TIN application.

Step 11: After printing the application form, fill out and sign the section for DECLARATION and CERTIFICATION.

Step 12: The TIN applicant is required to submit a signed hard copy of the filled application form, signed terms and conditions, and the necessary identification documents to the nearest URA office. An acknowledgement of receipt is sent to your email and upon approval a TIN certificate is sent to you.

1. Step-by-Step Registration as an Individual

Step 1: Visit the URA web portal https://ura.go.ug  and on the home page, click ‘Get a TIN’

Step 2: Next, click ‘Instant TIN Application’

Step 3: On the Instant TIN Application page, click ‘click to apply for an Instant Tin’

Step 4: On the TIN Registration page, select Individual as applicant category

Step 5: Fill in the National ID Number (NIN), source of income and current physical address. Fields labeled with a red asterisk (*) are mandatory fields. Before clicking ‘submit application’ first confirm you are not a robot

Please note:

Where the source of income is employment, the employer’s TIN is mandatory and for a registered business the business registration date, name, and number are mandatory.

Step 6: After Submission, the TIN applicant will then get an Instant TIN and a provisional TIN certificate.

It is very important to keep complete and proper records of all business transactions for at least five years after the end of the tax period to which they relate for future reference. These documents among others include;

• Income statement (List of Receipts and Payments),
• Payroll
• Contracts
• Bank statements
• Appointment letters
• Bills (e.g. utility bills)
• Stock records
• Asset registers and many other records and/or documents relevant to your business such as receipt books, invoices, debtors and creditors among others.

Income tax

Any religious institution dealing in income generating activities is required to register for income tax (IT). IT is tax imposed on a person’s chargeable income at specific rates and is charged for each year of income.

Resident religious institutions are taxed on worldwide income, while non-residents are taxed only on income derived from sources in Uganda. It may be categorized into:

• Individual Income Tax: This is imposed on all individuals engaging in income-generating activities/businesses for example, a religious leader who operates a business will be charged tax on that business.

• Corporation Tax: This is imposed on all corporate entities (companies) engaging in income-generating activities/businesses. If a religious institution owns a radio, incorporated as a company, they are expected to pay 30% of the chargeable income (profits) as corporation tax.

• Withholding Tax (WHT): This is tax withheld at source by a designated withholding agent. This tax is collected in advance and as such the taxpayer needs to declare it in the tax return such that it reduces the tax liability of the period it relates The rates are either 6%, 10%, or 15% depending on the type, for example for a supply of goods, exceeding an aggregate of shs. 1,000,000 to a designated withholding agent such an agent is required to withhold 6% of the gross amount. A person paying a commission to an insurance agent or advertising agent shall withhold tax at a rate of 10% before paying the commission. Similarly, a resident company that pays a dividend to a resident shareholder is required to withhold tax at 15% of the gross amount of the dividend paid, except where the dividend income is exempt from tax in the hands of the shareholder.

• Rental Tax: This is imposed on the total amount of rental income derived by a person for the year of income from the lease of immovable property (land and/or buildings) in At the moment rental tax is charged at a rate of 12% for individuals and 30% for companies. If a church owns land or building that it lets out, such income is subject to tax.

• Pay As You Earn (PAYE): This is withheld by the employer (religious institution) if the entity has employees, and paid a monthly renumeration in excess of shs. 235,000. Such an institution is required to withhold the tax monthly and remit it to URA. Each employee is required to obtain a TIN, and the employer must register for Pay As You Earn (PAYE), file a return, and pay by the 15^th day of the following month.
• Presumptive tax: This tax targets small business taxpayers who earn income not exceeding shs 150 million a year. For income tax purposes, a small business taxpayer is a resident taxpayer (individual or non-individual) whose gross turnover from all businesses owned by such a person in a year is more than Ten million shillings but does not exceed one hundred fifty million The term TURNOVER refers to one’s total sales in a year. However, persons engaged in medical practice, architectural service, accounting and audit practices, legal practice, dental practice, engineering service, public entertainment services, public utility service, construction service, and any other professional services are excluded from presumptive tax. The concept of small businesses in taxation was developed to accommodate low-income taxpayers who would ordinarily find it difficult to prepare formal accounts. Religious institutions owning small businesses are taxed basing on the following rates.

Schedule for the computation of “presumptive” income tax for small businesses

Value Added Tax (VAT)

This is an indirect tax on consumption charged on value added to “taxable” goods and services, at different stages in the production and distribution of goods and services. In Uganda, VAT is imposed on the supply of goods and services (taxable supplies) made by a taxable person, other than exempt supplies; and imports other than exempt imports and is charged at a rate of 18% or 0%. VAT is applied on three categories namely:

• Taxable supply of goods or services made by a taxable person within The person liable to tax is the taxable person making the supply.
• Import of goods other than those classified by the VAT Act as The person liable to tax is the person making the importation.
• Imported The person liable is the receiver of the imported service.

Religious institutions with entities that deal in vatable supplies and can make total sales amounting to Shs.150 million a year or Shs. 37.5 million quarterly (any three consecutive calendar months) are required to apply for VAT. In addition, they should register for the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).

Import taxes

If the entity is importing goods or services, for example, motor vehicles, it is required to register for such taxes and will where applicable pay import taxes (import duty, VAT, Withholding tax, Environmental levy, and infrastructure level).

NB: For details about these tax types please refer to the Taxation Handbook, also available on the URA website.

Broadly the following return categories apply where a religious institution is required to pay any of the above taxes. These include;

1. Provisional tax returns: Individuals file their provisional income tax returns within the first three months while Non-individuals such as companies, file their provisional returns within the first six months.
2. Final Returns: Annual returns under this category are filed within six months after the end of the year of income.
3. Monthly returns: These are filed by the 15^th day of the following month.

Please note:

• Returns are supposed to be filed by the due date (deadline).
• Filing of a return must be followed up with payment of the tax payable.
• Late filing of a return leads to penalties.

Due dates for Filing Returns and Paying taxes

After filing returns, the businesses are required to pay the resultant tax using any of the available payment platforms e.g. banks, mobile money, EFT, RTGS, VISA, Mastercard, USSD code (*285#) etc.

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