List Of Domestic Taxes In Uganda

domestic tax means a tax chargeable on profits or gains, under the laws of a territory in which an entity is established, that is similar to income tax, corporation tax (including a charge under Part 35B) or capital gains.

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 pa pay an additional 10% on the income above 120m.

Taxation in Uganda

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Tax Administration
Taxes in Uganda are centrally assessed and collected by the Uganda Revenue Authority (URA),
headed by a Commissioner General.
Within the organisational structure of URA, two operational departments (Domestic Taxes and
Customs) headed by Commissioners are directly responsible for the assessment and collection
of revenues resulting from the tax laws below:
1. Customs Tariff Act, Cap. 337;
2. East African Customs Management Act;
3. East African Excise Management Act;
4. Excise Tariff Act, Cap. 338;
5. Income Tax Act, Cap. 340;
6. Stamps Act, Cap. 342;
7. Traffic and Road Safety Act, Cap. 361;
8. Value Added Tax Act, Cap. 349;
9. Finance Acts (Various);
10. Gaming and Pool Betting (Control and Taxation) Act, Cap.292;
Income Tax
In Uganda, income tax applies generally to all types of persons who derive income, whether an
individual, bodies of individuals, or corporate entities. Resident persons are taxed on worldwide
income, while non-resident persons are taxed only on income derived from sources in Uganda.
Income tax is imposed on three broad categories of income – Business income, Employment
income and Property income.
Most of the taxes imposed are self-assessed. The self-assessment system imposes on the taxpayer, in the first instance, responsibility for calculating taxable income and the tax due on that income. The taxpayer’s calculations may however be reviewed by revenue officials when returns are filed and may be subject to further audit.

Tax rates for Individuals in Business

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 pa pay an additional 10% on the income above 120m.

Tax rates for Individuals in Employment
Employers are required by law to deduct tax from an employee’s salary or else they become personally liable for the tax that should have been deducted. The monthly PAYE (Pay As You Earn)rates are shown below:
CHARGEABLE
INCOME (CY)
RATE OF TAX
UGX (MONTHLY) RESIDENTS NON-RESIDENTS
0 to 235,000 Nil CY x 10%
235,000 to 335,000 (CY – 235,000) x 10% CY x 10%
335,000 to 410,000 (CY – 335,000) x 20% + (10,000) (CY – 335,000) x 20% + (33,500)
410,000 to 10,000,000 (CY – 410,000) x 30% + (25,000) (CY – 410,000) x 30% + (48,500)
Above 10,000,000 [(CY – 410,000) x 30% + (25,000)]
+[(CY – 10,000,000) x 10%]
[(CY – 410,000) x 30% + (48,500)]
+[(CY – 10,000,000) x 10%]
Tax rates for Companies
The income tax rate for a company i.e. a body of persons, corporate or unincorporated, created or recognised under any law in Uganda or elsewhere, is 30% of the entity’s CHARGEABLE INCOME i.e. gross income less tax allowable deductions.
For non-resident companies, an additional 15% tax may become chargeable on repatriated
branch profits.
CHARGEABLE INCOME (CY) RATE OF TAX
UGX (Annual) Residents Non-residents 0 to 2,820,000 Nil CY x 10%
2,820,000 to 4,020,000 (CY – 2,820,000) x 10% CY x 10%
4,020,000 to 4,920,000 (CY – 4,020,000) x 20% + (120,000) (CY – 4,020,000) x 20% + (402,000)
4,920,000 to 120,000,000 (CY – 4,920,000) x 30% + (300,000) (CY – 4,920,000) x 30% + (582,000)
Above 120,000,000 [(CY – 4,920,000) x 30% + (300,000)]
+ [(CY – 120,000,000) x 10%]
[(CY – 4,920,000) x 30% + (582,000)]
+[(CY – 120,000,000) x 10%]

Withholding taxes (WHTs)

As in the case for corporations, individuals that are employers are also obligated to withhold tax on payments of employment income made to their employees. This is a final tax for an individual who does not have other sources of income.

Individuals also incur WHT on payments of interest made to them. The WHT is at a rate of 15%. However, individuals are not obligated to withhold tax on payments made by them to taxable persons.

WHT is also incurred at a rate of 15% on dividends received by individuals. However, if the dividend is received from a listed company, the WHT incurred is 10%.

WHT is also charged on the importation of goods into the country. The tax charged is at a rate of 6% on the value of goods imported. Individuals are required to maintain records of the WHT paid on imported goods.

Tax at 6% is also deducted on receipt of payment from the government of Uganda, a government institution, a local government, or designated withholding agents for supplies exceeding UGX 1 million.

Tax credits are available for the WHT suffered. However, tax suffered on interest from government securities is a final tax. Such interest is therefore not included in the chargeable income of the individual and no tax credits are granted on it.