PRESENTATION ON INCOME TAX AMMENDEMENTS AND TAX COMPLIANCE TO

COFFEE TRADING COMMUNITY /COFFEE EXPORTERS AT UCDA ON 26th June 2015.

INTRODUCTION

• The budget for the year 2015/2016 was read after it was accordingly approved by parliament on 30/May 2015 in harmony with section 14 of the Public Finance and Management Act 2015.

• The speech include among others, tax amendments that were approved .

• The effect cut across Tin registration requirement, Changes in threshold, Income tax, VAT among others.

TIN Requirement

• To provide professional services where a license or permit is required (doctors, pharmacies, engineers, architects, lawyers, etc) • To get a trading license•Movement permit (e.g. of cattle from one location to

another)• Owning or transferring a vehicle / boda-boda• NOTE: to supply government / local government you need a

TIN but not VAT registration. • Any taxpayer receiving goods and services above Shs5M will

be required to provide a TIN of the supplier before they can claim a deduction.

Transport Sector

•Advance Income Tax for Passenger and Freight Transport i.e. Improve compliance in the transport sector by levying a flat fee of tax i.e. 50,000/= per ton for goods vehicles and 20,000/= per passenger per year for PSVs. •For example:•Commercial vehicles; Multiply tonnage by 50,000 for commercial vehicles and make an advance payment. E.g. If a Gross weight of a lorry per logbook reading is 7 tones , the income tax there on is (7*50,000=350,000)•Passenger vehicles; Multiply the passenger caring capacity per logbook reading by 20,000 and make an advance payment. E.g. If an Omnibus is a 14 seater, the income tax there on is (14*20,000 = 280,000).• 4

Under Income Tax- Presumptive Tax

•The threshold for presumptive tax payers increased from UGX 50M to 150M .•Introduced the Rates of tax payable by Presumptive tax Payers whose turnover is below UGX 50M depending on location and nature of business.•Presumptive Tax rates reduced from 3% to 1.5%.•This is to simplify procedures, reduce costs of

doing business, ensure that the threshold is in line with the VAT threshold, make it easy to work with Local Governments and to curb the growth of the informal sector.

PRESUMPTIVE RATES FOR KAMPALA CITY AND DIVISIONS OF KAMPALA

General trade 500,000 400,000 250,000

Carpentry/metal works 500,000 400,000 250,000

Garages/metal vehicle repair

550,000 450,000 300,000

Hair and beauty saloons 550,000 450,000 300,000

Restaurants and/or bars 550,000 450,000 300,000

Clinics 550,000 450,000 300,000

Drug shops 500,000 400,000 250,000

Others 450,000 300,000 200,000

PRESUMPTIVE RATES FOR MUNICIPALITIES

Business trade With turn over between(UGX 35,000,000-50,000,000)

With turn over between(UGX 20,000,000-35,000,000)

With turn over between(UGX 10,000,000-20,000,000)

General trade 400,000 300,000 150,000

Carpentry/metal works 400,000 300,000 150,000

Garages/metal vehicle repair

450,000 350,000 200,000

Hair and beauty saloons 450,000 350,000 200,000

Restaurants and/or bars 450,000 350,000 200,000

Clinics 450,000 350,000 200,000

Drug shops 400,000 300,000 150,000

Others 400,000 350,000 150,000

PRESUMPTIVE RATES FOR TOWNS AND TRADING CENTRES

Business trade With turn over between(UGX 35,000,000-50,000,000)

With turn over between(UGX 20,000,000-35,000,000)

With turn over between(UGX 10,000,000-20,000,000)

General trade 300,000 200,000 100,000

Carpentry/metal works 300,000 200,000 100,000

Garages (metal vehicle repair)

350,000 250,000 100,000

Hair and beauty/salons 350,000 250,000 100,000

Restaurants and/or bars 350,000 250,000 100,000

Clinics 350,000 250,000 100,000

Drug shops 300,000 200,000 100,000

Others 300,000 250,000 100,000

Part I Gross Turnover Between 50M to 150MThe amount of tax payable for purposes of section 4(5) is—

Where the gross turnover of the taxpayer exceeds Shs. 50 million but does not exceed Shs. 75 million per annum

Shs. 937,500 or 1.5% of the gross turnover, whichever is lower

Where the gross turnover of the taxpayer exceeds Shs. 75 million, but does not exceed Shs. 100 million per annum

Shs. 1,312,500 or 1.5% of the gross turn over, whichever is lower

Where the gross turnover of the taxpayer exceeds Shs. 100 million but does not exceed Shs. 125 million per annum

Shs. 1,687,500 or 1.5% of the gross turn over,whichever is lower

Where the gross turnover of the taxpayer exceeds Shs. 125 million but does not exceed Shs. 150 million per annum

Shs. 2,062,500 or 1.5% of the gross turnover, whichever is lower

Gross Turnover Between 50M to 150M Cont ……

• . The tax payable by a taxpayer under section 4(5) is reduced by—• (a) any credit allowed under section 128(3) for withholdingtax paid in respect of amounts included in the gross turnover of the

taxpayer; or (b) any credit allowed under section 111(8) for provisional tax paid in respect of amounts included in the grossturnover of the taxpayer

ON VAT

•The VAT registration threshold increased from UGX 50M to UGX 150M.•Objective :

To reduce the cost of compliance to the T/payers,

To minimize the cost of administration To harmonize with the region.

•The implication is that those below turn over 150m are to be de-registered from VAT and notification shall be sent to the public to this effect.

ON VAT cont…….

•Voluntary registration is still an option but must meet the criteria like before amendment.

•Taxpayers de-registered due to threshold shall fall into presumptive category.

Rights• Facilitation on tax compliance• Equitable treatment on tax

matters• Confidentiality of information• Objection and appeal• Prior notice on inspection &

audit • Tax refunds• Customer care• Processing returns, customs

entries• Accountability for payments

made to URA

Obligations• To Register for Taxes • To Make correct and

accurate declarations (returns, customs entries)

• To Pay your taxes promptly • To Cooperation with the

authority• To Maintain proper records

and avail them for inspection by the Commissioner

Tax Payer Rights and Obligations

Taxes applicable to coffee trading community (farmers,traders and exporters).

Tax Type Taxed On Who Pays Due Date

WITHHOLDING TAX Advance Tax Collected by listed agents

Service/goods suppliers/importers

By 15th Of Following Month

PAYE Staff emoluments Using PAYE rates

Employees of the agent or dealer

By 15th Of Following Month

VAT Multi-stage Tax Collected by Registered agents.

Final Consumers By 15th Of Following Month

INCOME TAX Tax on Profit derived from Business Income, Rental Income, any other incomes other than presumptive tax with fixed rates.

Trader / person/company in business

Provisional, 30th June/31st Dec.Final Return, 30th June/31st Dec.

Costs of Non Compliance•No license•High taxes due to Fines,

Penalties & Interest•High estimated

assessments•Enforcement action

through Agency Notices etc•Shame list•Reputation Loss•Prosecution

Tips on being tax complaint• Register for the tax, get a TIN

• Prepare and keep records of your transactions

• Make Correct declarations

• Pay the right tax by the due date

• Seek guidance from URA through various channels like email, telephone,nearest office, etc

It pays to comply

• Acquisition of license from Government bodies.

• Tax Clearances

• Awards and Recognition

• Reputation

•WHT Exemption

• National development

WAY FORWARD

18

Developing Uganda Together

Website: ura.go.ug. URApage

@uraugandaEmail: services@ura.go.ugContact Centre: 0800117000/ 0417444602/3Our nearest URA Service Office

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Saturday, April 15, 2023