Agribusiness covers the entire agricultural value chain, including:

• Production Inputs: Manufacturing and supplying equipment, seeds, and agrochemical. 
• Farming: Crop cultivation and livestock farming. 
• Processing: Transforming raw agricultural products into consumer goods (e.g. maize into flour, milk into yogurt).
• Distribution: Wholesale and retail operations, including logistics and supply chain management. 
• Support Services: Agro-services like market analysis, finance, insurance, extension services, and technology for farmers, as well as farmer support and organizations. 

• Agricultural Inputs – businesses that supply seeds, fertilizers, pesticides, machinery, and animal feeds.

1. TAX REGISTRATION

In Uganda, every agribusiness dealer (whether a farmer, processor, trader, exporter, or input supplier) who earns income from agricultural activities is required to be registered with;

• Uganda Registration Services Bureau (URSB) for Company registration or a Certificate of registration if you’re an individual.
• Uganda Revenue Authority (URA) for taxes

For individuals

• A National ID or any other two of the following valid identification documents:  Passport, Driving permit, Voter’s card, Village ID, Employment ID, Refugee ID, recent Bank statement, Work permit, financial card, Visa, NSSF card, etc.
• A Certificate of registration (in case one is in business)
• Statement of particulars and partnership deeds (in case of a partnership)

 For non-individual

• Company Form 20
• Certificate of incorporation

• You’re required to visit the URA portal on ura.go.ug
• Click here to register as an individual
• Click here to register as a non-individual

 2. RECORD KEEPING

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

• Income statement records
• Receipt and invoice records
• Payment vouchers
• Import schedules in case you’re an importer
• Contracts executed
• Bank statements
• Appointment letters for your employees and proof of payment of their salaries
• Utility bills
• Stock records
• Debtors and Creditors

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 your tax liability;
• Keep records for five years after the end of every 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 to URA in writing with clear reasons to the commissioner.
• 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.
• However, the taxpayer shall file a tax return or provide other correspondence with the Commissioner in English.

The penalty for knowingly or recklessly or not failing to maintain records as required under any tax law is a fine not exceeding Shs. 2,000,000 or imprisonment not exceeding six years or both on conviction.

Note: A taxpayer who cannot effectively handle their tax matters can appoint a tax agent to transact with URA on his/her behalf

 3. FILING TAX RETURNS

A tax return is a declaration in a form prescribed by the Commissioner, on which a taxpayer reports his or her income for the tax period as a way of self-assessment for taxation purposes.  A taxpayer registered with URA for any tax type other than Pay as you earn (PAYE) must submit a return for the tax period as per the respective tax law.

A tax period is the duration for which a return is required i.e. a year, month or week. A due date is the deadline for filing a return beyond which a person is required to pay a penalty. Returns are filed online using URA’s electronic filing platform.

Note

1. All tax returns must be submitted in the prescribed format, and the commissioner can appoint any other person to assist a taxpayer who fails to file at his/her cost.
2. The law provides for a separate quarterly return for non-resident suppliers of services deemed to be supplied in Uganda when made to non-taxable persons.

This depends on the type of return and the type of taxes an agribusiness is registered for.

• Visit the URA website at ura.go.ug
• Click file a return

Downloading a return template

Please follow the steps below to download the template;

• Go to our website www.ura.go.ug, scroll down the home page, go to the download online forms
• Click and download the preferred return form under the e-form column.
• Save the template in its system downloaded name, and open and enable macros using the Help tab in the template.
• Fill in the required details, go to the last page, click on the VALIDATE button to generate an upload file, and save it in its system-generated name.

4. PAYMENT OF TAX

After filing a return, you’re 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.

Please note: the due date for payment of tax is the same as that of return filing.

Steps to register a payment

Step i: Visit the URA web portal https://ura.go.ug  and on the home page, click Make a payment

Step ii: From the menu on the left hand side, click Generate a payment slip and select  Click here to register a payment

 Step iii: On the payment registration page;

• Under Taxpayer details, provide the taxpayer TIN , taxpayer name and district/city
• Under period selection, select the tax period for which you are making payment
• Under basis of payment, select the applicable basis of payment

 Step iv: Under payment details>>Tax head, select the correct tax head for which you want to make payment e.g. income tax and  click on load periods

 Step v: Under load periods, fill in the period for which you are making payment and click Add period

 Step vi: Next, fill in the amount to pay

Step vii: Under payment methods, enter text from the given image and click Accept and Register.

Step viii: Once you have submitted, the payment registration slip will be generated. Take note of the payment registration number that is indicated on the payment registration slip or print the slip and make payment in the bank or via mobile money or any other URA payment modes.

1. INCOME TAX

Persons involved in agribusiness must register for income tax, if they earn income. Income tax generally applies to all types of persons who earn income, whether they are individuals, non-individuals, or partnerships.

• Resident persons are taxed on worldwide income, while non-resident persons are taxed only on income derived from sources in Uganda.
• The taxpayer is required to make a self-assessment by calculating taxable income and then calculating the tax due on that income. The taxpayer’s calculations are reviewed by revenue officials when returns are filed to ensure that the declarations made are correct. The income tax rates apply differently to;

1. Individuals
2. Non-individuals

1. Individual Income Tax

The income tax rate for individuals depends on the income bracket in which the individual falls. Resident individuals enjoy a tax-free annual income threshold of UGX 2,820,000 per annum. The balance is taxed at 10%, 20% or 30% depending on the income bracket. Individuals who earn above UGX 120,000,000 per annum pay an additional 10% on the income above UGX 120 million.

Rate of tax for Resident individuals

Rate of tax for Non-Resident individuals

N.B. CY represents chargeable income

1. Non-Individual Income tax

This is imposed on all corporate entities (Companies) in the agribusiness sector. Income Tax is charged at a rate of 30% on the profits from business (Chargeable Income).

• Pay As You Earn (PAYE)

Any person dealing in commercial agribusiness who offers employment is required to be registered for Pay As You Earn (PAYE).

Employment income includes gross cash received in the form of: salary, leave pay, payment instead of leave, overtime pay, fees, commission, gratuity, bonus, allowances (entertainment, duty, utility, welfare, housing, medical, sitting, transport, or any other allowances).

Benefits in kind include use of the employer’s office, Motor vehicle for personal errands, free accommodation, use of a driver, domestic workers, and free utilities (power, water) paid by the employer on behalf of the employee. The benefits in kind are computed using particular formulae in the 3rd Schedule of the Income Tax Act.

PAYE is tax withheld from all employees earning a salary income above the stated threshold as per the Income Tax Act and filed by the employer to URA by the 15th of the following month.

The PAYE rates are applied based on the person’s resident status as shown in the tables below.

  PAYE tax rates for Non-Resident individuals

1. Withholding tax

Withholding tax (WHT) is income tax that is withheld at source by one person (withholding agent) upon making payment to another person (payee). This tax is payable by an agribusiness dealer who deals in agro-processed products, at a rate of 6% when such goods are supplied to a designated withholding agent. Tax is withheld when such a supply exceeds UGX 1,000,000, a month.

Please note that withholding tax of 6% does not apply to agricultural supplies.

Withholding taxes may be final or creditable.

• Under the final withholding tax system, the amount of income tax withheld by the withholding agent constitutes a full and final payment of the income tax due from the payee on the said income. The payee is not required to file an income tax return for the particular income that has been subject to final withholding tax and does not qualify for an allowable deduction on the expenditures incurred in generating the income.
• Under the creditable withholding tax system, taxes withheld on certain income payments are advance tax payments, which are offset against a final tax liability in an assessment for a particular year of income. The payee is required to file an income tax return to report the income and/or pay the difference between the tax withheld and the tax due on the income.

WHT should be considered when making the following payments:

1. International payments: Tax is imposed on every non-resident person who derives any dividend, interest, royalty, natural resource payment, or management charge from sources in Uganda. The tax is withheld by the payer at the rate of 15% on the gross amount before payment.
2. Payments to non-resident Contractors or professionals: Tax is imposed on every non-resident person deriving income under a Ugandan source service contract. The tax is charged at 15% of the gross amount of payment, and the person making the payment should withhold the relevant tax before effecting the payment.

• Payments on dividends: 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. However, where the dividend is paid by a company listed on the stock exchange to a resident shareholder, the rate is 10% on the gross amount.

Please note;

• The responsibility for payment of the WHT rests primarily on the person making payment as a withholding agent, and failure to remit will render the withholding agent liable for the tax due.
• A WHT Agent is required to file and pay the tax withheld within 15 days after the end of the month in which the payment subject to withholding tax was made by the WHT Agent.

1. VALUE ADDED TAX (VAT)

VAT is an indirect tax on consumption charged on value added to taxable supplies at different stages in the chain of production and distribution.

Taxable supplies are goods or services supplied by a taxable person, i.e., persons registered or required to register for VAT purposes. These are either Standard-rated at 18% VAT or Zero-rated at 0% VAT

The threshold for VAT registration is Shs. 150 million annually. However, you are required to be registered for VAT when you make taxable supplies exceeding 37.5 million in any 3 consecutive calendar months..

Please note:

1. Persons dealing in taxable supplies with a gross turnover of over 150 million are required to register for VAT.
2. Traders dealing in livestock, unprocessed foodstuffs and unprocessed agricultural products except wheat grain are not subject to Value Added Tax (VAT)
3. Commercial farmers may register for VAT to enable them to claim a refund of VAT on inputs used in the farm.
4. Those on VAT are required to use the Electronic Fiscal Receipting and Invoicing Solution – EFRIS, to issue receipts and e-invoices.

For more clarification please contact us on our Toll-free line at 0800117000 or 0417444602 and 0417444603 (Not toll-free); or send an email to services@ura.go.ug