TOURISM

What is tourism?

 Tourism involves the short-term movement of people to destinations outside the places where they normally live and work.  It also involves the activities of people who travel for recreation, holiday, business, sports and leisure activities.

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You’re considered a player in the tourism sector if you operate tourism sights/destinations, accommodation, food service activities, tour operations, travel agency, arts and culture sectors.

All businesses in the tourism sector in Uganda are required to be registered with:

  • Uganda Registration Services Bureau (URSB) for Company registration
  • Uganda Revenue Authority (URA) for taxes
  • Local council authorities e.g. KCCA, municipal council, for a trading license

Please note

Upon registration companies in the tourism sector are required to comply with the requirements of relevant authorities like:

  • Ministry of Tourism, Wildlife and Antiquities
  • Uganda Tourism Board
  • National Environment Management Authority

 

For individual

  • 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.
  • Certificate of registration (incase you are in business)
  • Statement of particulars and partnership deeds (incase of a partnership)

For non-individual

  • Company Form 20
  • Certificate of incorporation

Click here for details on requirements for registration

You’re required to visit the URA portal on ura.go.ug

Click here for your rights as a taxpayer

Click here for your obligations as a taxpayer

Value Added Tax (VAT)

VAT is a consumption tax charged at a rate of 18% on all supplies made by taxable persons i.e. persons registered or required to register for VAT purposes. The threshold for VAT registration is an annual turnover of over 150 million, or 37.5 million in the first 3 consecutive months.

Click here to register for VAT

Please note

Tour agents are expected to prepare two accounts

  • The reconciliation account to determine the actual VAT spent by the tourist.
  • The VAT account to determine the actual amount of VAT payable or claimable to URA by the agent

 

Income tax

Any person dealing in tourism business is required to be registered for income tax. Income tax applies generally to all types of persons who derive income, whether an individual, non-individual or partnership.

Resident persons are taxed on worldwide income, while non-resident persons are taxed    only on income derived from sources in Uganda.

Click here for information on income tax rate.

 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).

Please note

The tax withheld is credited/ reduced on the tax payable in the final income tax return.

Click here for information on Withholding tax.

Pay As You Earn (PAYE)

Any person dealing in transport business and has workers earning a monthly salary more than 235,000 per month is required to register for Pay as You Earn (PAYE), withhold and remit tax to URA.

Click here for the PAYE rates

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.

Income tax

Beneficiary

Incentives

Period of Incentive

Conditions for the Tax Incentive

Compliant taxpayers

6% Withholding tax exemption on payment for goods and services and professional fees

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 training expenditure

Indefinite

Employers who train permanent residents or provide tertiary education not exceeding in the aggregate 5 years

All taxpayers

Carry forward losses: Assessed loss is carried forward as a deduction in the following year of income.

Duration of the loss

All taxpayers

Investor established in a country with which Uganda has a  DTA

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%

Duration of the DTA

Beneficial owner of investment as defined in the Income Tax Act established with economic substance in a country with which Uganda has a DTA.

VAT Act

 

Beneficiary

Incentives

Period of Incentive

Conditions for the Tax incentive

 

1. Developer of a hotel or tourism facility

No VAT on the supply of feasibility study, design and construction services; or on the supply of locally produced materials

Duration of the development

The hotel developer must invest at least USD 8m. The feasibility studies must be for the development of a hotel or tourism facility or the supply of machinery and equipment furnishings or fittings (not available on the market). The hotel or tourism facility must have a room capacity exceeding 30 guests. A developer of a facility for meetings, conferences and exhibitions whose investment capital is not less than one million United States Dollars.

 

VAT Registered taxpayers

VAT registered persons claim all the VAT incurred.

Indefinite

Turnover of UGX 150m in any 12-month period for first time registration, ability to keep proper books of accounts and making taxable supplies.

 

 

 

Stamp Duty Act

 

Beneficiary

Incentives

Period of Incentive

Tax incentive

 

Hotel or tourism developer

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.

Duration of the development

Must invest at least USD 8m.

Hotel or tourism facility should have room capacity exceeding one hundred guests

 

Loan applicants

NIL stamp duty on an agreement relating to the deposit of title- deeds, pawn pledge-of the total value.

Indefinite

Agreement relating to the deposit of title- deeds, pawn pledge-of the total value.

 

4. Loan applicants

NIL stamp duty on security bond or mortgage deed.

Indefinite

Security bond or mortgage deed executed by way of security for the due execution of an office, or to account for money or other property received by virtue of security bond or mortgage deed executed by a surety to secure a loan or credit facility-of entry value.

 

                     

 

 

 

 

Beneficiary

Type of vehicle

Incentive

Conditions for Exception

Tour operators and guides

1) Motor car for transportation of tourist imported by tour operators upon recommendation

by a competent authority responsible for tourism promoting in a partner state

 

Exempted from

all taxes under the

fifth schedule of

the East African

Community Customs

 

Management Act,

 

2004

 

the Vehicles meet

the following conditions;

a)  They are four-wheel drive with open roof facility

for game viewing and have a seating capacity not exceeding 12 passengers.

 

b) They have provisions

for camping, rescue and first

aid equipment, baggage

and compartment and communication fittings.

 

c) operate and have a

clear and conspicuous label or marking of “Tourist

vehicle.”       

 

d) Any other condition

that the commissioner may impose, Provided that

duties shall be payable upon

disposal for other use or

change of use         

Tour operators and guides

 Sightseeing buses

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

a) Front facing comfortable reclining coach seats.

b) Basic lavatory facilities.

 

c) Provisions for first aid equipment, communication fittings and luggage compartment.

d)Seating capacity above

20.

e) Any other condition the commissioner may impose or vary. Provided that duties shall be payable upon disposal for

other use or change of use.

Tour operators and guides

Overland truck

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

a) High clearance for o road driving.

 

b)Forward facing comfortable reclining coach seats.

 

c)Inverter for charging electrical items.

 

d)Camping stocks, tents, kitchen and food storage.

 

e) Windows for good all-round view.

 

f) Provisions for first aid equipment, communication fittings and luggage compartment.

 

g)        Any other condition the commissioner may impose or vary.

Provided that duties shall be

payable upon disposal for

other use or change of use

Tour operators and guides

Tourism boats

Tourism boats imported by a licensed tour operator

exempted from taxes under the 5th Schedule of the EAC CMA

 

Click here to download Taxation on Hotel and Accommodation Sector Guide
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