All you need to know about Tax compliance for your business in Uganda

Tax Compliance is the degree or extent to which a taxable person complies with tax issues for example producing & submitting tax information to the tax authorities in time and required formats ,Filing returns, paying tax due in a timely manner.

What does it takes to be Tax Compliant?

  • Obtaining appropriate  tax registrations
  • Preparation and filing of  periodic returns
  • Advance tax computation
  • Health check of Tax position
  • Review of your transactions.

Taxes on businesses and Individuals in Uganda

Business Income Tax
Paid by every incorporated business whose source of income is in Uganda and it is 30 percent except for mining companies which is calculated using different formulas depending on chargeable & gross revenue but the tax is at least 25 percent & most 45 percent.  

Still the small business with annual sales between Uganda shillings 5,000,000 and 50,000,000 have special rates determined based upon the gross income of the business.

Personal Income Tax
Individuals pay taxes on the income and are required to pay personal income on a monthly basis which is usually not more than 30 percent of the monthly salary earned and is commonly known as Paye as You Earn (PAYE) and must be filed before every 15th of the following month.

Value Added Tax (VAT)
Is paid on every taxable supply made by a taxable supply, every imported goods and services and it is at rate of 18 percent. A person is required to register for VAT if the turnover of taxable supplies of the entity in 3 consecutive calendar months will exceed Shs 12.5 Million.

Excise Duty
Tax on sale of goods mainly of luxurious nature like beer, spirits, and soft drinks and registration is done by accessing E1 form from URA which is filled in duplicate and a fee of Shs 20,000 is paid as license fee and is valid for one year. Excise duty is charged at a rate of 20 percent and 10 percent on special cases.

Image Credit: Bearing Point Caribbean

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