Taxes on Small Businesses
Vol 1 Issue 4 FY 2022/23
What is a small Business?
This is a business that makes total sales between Ugx 10,000,000 and 150,000,000 in a year. This business should at least make sales of Ugx 27,500 in a day.
What is tax on small businesses?
This tax, also known as presumptive tax is charged by Uganda Revenue Authority from operators of small businesses.
Who pays this tax?
This tax is paid by the owners of small businesses.
Does every owner of a business in this sales category pay this tax?
No. professionals for example persons in dental, medical, engineers, accountants, and architectural practice among others do not pay this tax.
What do I need to register?
For Individual, you need a National ID only.
As a sole proprietor: Certificate of registration, National ID and Statement of particulars
A company must have TINs of directors, Incorporation, Company form
Please note that your company must already be registered by Uganda Registration Services Bureau (URSB).
How is a Small business charged?
Below are the rates applied in taxing small businesses.
| TOTAL SALES IN A YEAR | TAX PAYABLE | |
| With Records | Without Records | |
| Total sales does not exceed Ugx 10 million | Nil | Nil |
| Total sales more than Ugx 10 million but less than Ugx 30 million | 0.4% of annual total sales in excess of 10 million | Ugx 80,000 |
| Total sales more than Ugx 30 million but does not more than Ugx 50 million | Ugx 80,000 plus 0.5% of the total sales in excess of Ugx 30 million | Ugx 200,000 |
| Total sales more than Ugx 50 million but not more than Ugx 80 million | Ugx 180,000 plus 0.6% of the annual total sales in excess of 50 million | Ugx 400,000 |
| Total sales more than Ugx 80 million but not more than Ugx 150 million | Ugx 360,000 plus 0.7% of the annual total sales in excess of 80 million | Ugx 900,000 |
Please note
- The tax paid by the presumptive taxpayer shall be a final tax on the business income of a taxpayer
- No deductions shall be allowed for expenditures or losses incurred in the production of business income and;
- No tax credits are allowed to reduce the tax payable on the business income except withholding tax credit and provisional tax paid on amounts included in the gross annual income of the taxpayer
- A taxpayers with no record shall pay a fixed cost while those with a record shall pay tax as a percentage of the annual turnover
How do I pay this tax to URA?
You can pay this tax by following the steps below:
- Go to URA website; ura.go.ug;
- Under e-services, select payment registration.
- Select tax type i.e. income tax – small businesses.
- Enter your TIN, email address and telephone number.
- Input the amount applicable to you basing on the brackets above
- Select the mode of payment (bank, mobile money, EFT etc) and register the payment.
Ensure that you pay the assessed amount. You can contact any of our offices for assistance
Disclaimer: This information is strictly for guidance to our clientele and is subject to change on amendment of tax laws and other regulations governing tax administration
I think, this is a good initiative, more tax education and wide spread transmission of your education will make URA a friendly department of government. I wish they can also give you the mandate to dictate on usage of the money you collect. Open wastage of resources by government officials is annoying and discouraging!
i have got the right answers thank you
Some URA officers just generate PRNs of any amount they want because they have targets to achieve while killing small businesses. After reading this i have come to conclude that some URA officers are very green about business operations they just sit in office and assume, imagine a business with makes less than 30m is supposed to pay 80,000, the guy gave me a PRN of 300,000. We ask URA to regularly ask their officers to visit businesses rather than assuming what they want
Thanks URA. But in pallisa there is another form of tax that has been introduced called operational tax. We are being charged without assessment and they charge us 100000-500000= . Now what is the purpose of that tax as compared to URA? Where does that go and for what compared to URA taxes. These businesses of our that have loans ,ura rent etc will they be able to be paying duplicated taxes and be able to survive without failing? Am I allowed to refuse to pay that money?