On 15th June 2023, the Uganda Revenue Authority (URA) issued a public notice, serving as a reminder to the public “to pay stamp duty on all Agreements or Memorandum of Agreement executed or received in Uganda in relation to the purchase and transfer of property”. In their notice URA stated that “any person who purchases or transfers property should present the Agreement or Memorandum of Agreement together with the Transfer and Consent forms to URA for stamp duty assessment, payment, barcoding, and generation of Stamp Certificate. Stamp duty payable on each Agreement or Memorandum of Agreement is UGX 15,000, while…
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Cephas is a founder and the Managing Partner of Birungyi, Barata & Associates. He is an Advocate of the High Court, a commissioner for Oaths, a Notary Public and a registered Tax Agent with the Uganda Revenue Authority. He is also the head of the Tax Cluster in the Uganda Law Society and a member of the IBA Tax Committee. Founded in 2003, Birungyi, Barata & Associates (BBA) is Uganda’s leading tax law firm. It is recognized both locally and internationally by entities such as Uganda Law Society, East African Law Society, IFLR1000, Chambers & Partners and Global Law Experts…
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Capital gains arise when you sell an asset for more than you originally bought it. There are two kinds of assets in the Income Tax Act; a depreciable asset and a business asset. Depreciable assets are plant or machinery, or any implement, utensil or similar article, which is wholly or partly used or held ready for use, by a person in the production of income and which is likely to lose value because of wear and tear, or obsolescence. Common examples include computers, furniture and fittings, motor vehicles, plant and machinery. A business asset is one that is used or…
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The Tax Appeals Tribunal, sitting in Kampala has set aside a UGX4.6 billion import duty assessment against paint makers, Kansai Plascon Uganda. The company dragged the Uganda Revenue Authority (URA) to the Tribunal, challenging an import duty assessment of UGX4,623,958,639 on raw materials imported between 2017 to 2021 from Egypt, namely long oil alkyd resins, polymers and calcium carbonate. Egypt, just like Uganda, is a member of the Common Market for Eastern and Southern Africa (COMESA); therefore, the said goods were supposed to enjoy preferential tax status. In the tax dispute, URA told the court that during this period, Kansai…
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The Tax Procedures Code (Amendment Bill) 2023 which was published in the Gazette of 30th March 2023 has many novel amendments but this commentary focuses on the proposed amendment to Section 42 of the Act. Section 42 empowers the Commissioner to require any person by notice in writing, whether or not liable for tax to furnish within the time specified in the notice any information that may be stated in the notice. This Section is couched in such strong terms as evidenced in clause (4) which states that; “This section has effect despite- any law relating to privilege or the public interest with respect to the giving of information…
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The Tax Procedures Code (Amendment) Bill 2023 has a number of provisions that attempt to correct the complications and injustices related to the waiver of penalties and interest that has been enacted since 2017. The proposed amendment to Section 39 of the Principal Act reads; “(4) For the avoidance of doubt interest due and payable under the tax law as at 1st July 2017 exceeds the aggregate of the principal tax and penal tax the interest in excess of the aggregate is waived” There are three issues with this proposal; The words ‘for the avoidance of doubt’ have been used in…
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The Income Tax Bill published on 30th March 2023 is spectacular in that it attempts to make dramatic reforms in tax. Apart from doing away with the incentive for investors called initial allowance (50% of the cost base of an eligible property in a radius of 50km outside Kampala and 20% within that radius), it has introduced a wider-ranging tax on digital transactions. Of the proposed reforms, perhaps one that will most likely have wide-ranging effects, if not checked by Parliament, is the redesigning of the policy on the sale of assets which has been upgraded from taxing business assets…
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The Tax Appeals Tribunal (TAT) has disallowed a UGX 504,098,312 tax bill by Uganda Revenue Authority (URA) on asset-financing firm Tugende Limited, saying the tax authority wrongly assessed the tax. The 2 against 1 majority ruling follows an application by Tugende Limited arguing that the tax assessment was based on discounts to its customers who repaid their leases early, yet these should be allowable expenses. URA disagreed and issued an additional income tax assessment of UGX504,098,312 which the applicant objected to. Tugende was represented by Oscar Kamusiime and Linda Mugisha from Birungyi, Barata & Associates, while URA was represented by…
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By James Asiimwe Kamara Tax is a price we pay for a civilised and organised society. It is the major source of revenue that enables governments the world over to provide public amenities for their citizens. Whereas the Government of Uganda is mandated to collect tax from eligible citizens, it performs the role within the premises of a set legal framework and puts into consideration the rights and obligations of taxpayers. Uganda is operating a modern tax regime where the opportunity to determine how much tax to pay is first extended to the taxpayer. This is referred to as a…
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Uganda has one of the highest costs of the internet in the region largely attributed to high taxation. As we set out in this publication, it is time for the government to re-examine its policy stance on the taxation of internet connectivity services in Uganda to make it more affordable. Imported internet Prior to selling internet connectivity services to customers in Uganda, the Internet Service Providers (“ISPs”) import the same either via satellites or fibre optics. As we expound further in this article, at this point of importation of this internet by the ISPs, there is imposed a tax known…
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