TAX MEASURES 2017/2018

General purpose of the policy

changes

Improvement of efficiency
Improvement of Tax Compliance
both in terms of administration
and business processes
Improvement of revenue
collection
Expansion of the tax base
 SACCOs Exempt

Why
Remarks
Whats Changed To support They are still
A tax holiday the required to file
for all development income tax
of SACCOs returns and
SACCOs for and the pay PAYE
10 years up savings Dividends paid
to 2027 culture in to members is
Uganda still taxable
 Initial Allowance

Whats Changed Why Remarks

To promote This will
Introduction of investment apply to:
initial allowance Encourage Plant and
(Accelerated industrialisation Machinery
depreciation) for upcountry and Industrial
investments located create employment buildings
in a radius of 50kms opportunities for
outside Kampala. the rural
population.
 Capping Of Interest

Whats Changed Why Remarks

To relieve the tax Make tax most
Interest payable payers of the progressive
should not exceed burden of based on the
the sum total of excessive famous
Principal tax and interest. induplum
Penal tax. rule.
To encourage
compliance
 Motor Vehicle Benefit

Whats Changed Why Remarks

Take in account On reducing
Considered depreciation of balance
depreciation in the motor vehicle
determining the tax and equity in this Reduces tax
base for Motor provision payable on
Vehicle Benefit. this benefit
with time
 Exempt Regulators &
Professionals

Whats Changed Why Remarks

Bodies that have To relieve cash They are still

been enacted by flow problems to required to
Parliament to support their file income
regulate the activities tax returns
conduct of and pay
professionals are PAYE.
exempt from
income tax
 Gaming & Betting

Whats Why Remarks

Changed
To This is in addition to
15% WHT on discourage the 20% tax imposed
winnings re- gambling by the Lotteries Act
introduced on Betting Houses
 Rental Tax

Whats Changed Why Remarks

Revenue loss This will be done
The Minister to due under for taxpayers
prescribe rental declarations of who under
receivable rates rental income declare
for given areas by Landlords
for tax This will done in
purposes collaboration
with Govt
Valuer
 Bujagali Energy Ltd

Whats Changed Why Remarks

To mitigate and It will reduce
Exemption of impact on the the tariff /cost
Bujagali Energy tariff (power) and of power going
Limited from make electricity forward from
Corporation cheaper approximately
Tax for a period 13USD cents to
of 5years Further to 7USD cents or
promote industry. thereabout
 Govt not to pay VAT on Donor
Projects
For donor projects - Government MDAs are
Whats deemed to have paid VAT
changed

To relieve Government the burden of having to pay

VAT ( eliminate counterpart funding )
Why

Aid funded Projects are defined

Remarks
 Capping of interest
Interest payable should not exceed the sum total of
Whats Principal tax and Penal tax.
changed

To relieve the tax payers of the burden of excessive

interest.
Why To encourage compliance.

Make tax most progressive based on the famous

induplum rule.
Remarks
 Introduce VAT
on wheat grain

The supply of wheat grain is now standard rated.

Whats
changed

To promote local wheat production

Why

Wheat produced and milled in Uganda is zero rated

Remarks
 Exemptions
in Agriculture

Exempt from VAT:

Supply of animal feeds
Whats Crop extension services
changed Irrigation works, sprinklers and ready to use drip lines

To promote commercialisation of Agriculture

Why

Supply of animal feeds;

Crop extension services;
Remarks Irrigation works, sprinklers and ready to use drip lines
 Other VAT
Exemptions

Menstrual
Whats changed caps

To promote
education of girl
Why child
 Other VAT
Exemptions

Deep cycle batteries

and composite
Whats changed
lanterns

Use of Renewal
Why energy (Solar)
Excise duty
 Excise Duty Amendments
PRODUCT PRODUCT TYPE UNIT OLD RATE NEW RATE
CATEGORY

15 Cigarettes Soft cap per 1,000 55,000/

(Locally
manufactured sticks =
)
1,000 50,000/ 75,000/
Soft cup
(Imported) sticks = =

Hinge lid 80,000/

(Locally
manufactured 1,000 =
) sticks

Hid Lid 100,000

(Imported) 1,000 /=
sticks
 Excise Duty Amendments
PRODUCT PRODUCT UNIT OLD NEW RATE
CATEGORY TYPE RATE
16 Beer Malt beer per litre 60% or
Shs.1860 per
litre, whichever is
higher
Beer whose per litre 30% or Shs.
local raw 650 per
material content,
excluding water,
is at least 75%
by weight of its
constituent
Beer produced per litre 30% or Shs.950
from barley per litre,
grown and whichever is
malted in higher.
Uganda.
 Excise Duty Amendments
PRODUCT PRODUCT UNIT OLD NEW RATE
CATEGORY TYPE RATE
17 Spirits Made from per litre, 60%
locally
produced
raw
materials
Under per litre 100% or
natured Shs.2500 per
spirits litre, whichever
is higher
Other spirits per litre 80%
 Excise Duty Amendments
PRODUCT PRODUCT TYPE UNIT OLD NEW RATE
CATEGORY RATE

19 Non- Alcoholic Non-alcoholic per litre 13% or Shs. 240

beverages per
not including fruit or litre, whichever is
vegetable juices. higher

fruit juice and 13% or Shs. 300

vegetable per liter, whichever
juice, except juice is higher.
made from at least
30% of pulp from fruit
and s grown in
Uganda
 Excise Duty Amendments
PRODUCT PRODUCT TYPE UNIT OLD NEW RATE
CATEGORY RATE
20
Furniture Specialized hospital Nil Nil
furniture

Furniture manufactured 10% Nil

in Uganda using local
materials but excluding
furniture which is
assembled in Uganda.

Other furniture 10% 20%

TAX PROCEDURES
ACT
 Transfer Pricing Information

PENALTY FOR FAILURE TO PROVIDE TRANSFER

PRICING INFORMATION

Penalty introduced for failure to provide transfer

Whats pricing records/documents
changed

To improve responsiveness by MNEs

Why

Compliance Measure.
Remarks
 Tax Stamps
Introduction of tax stamps on specified goods or
Whats items and provision for penalties for the same.
changed

A control measure for goods manufactured or

coming into the country to ensure all taxes are paid
Why

All importers /manufacturers of these goods are

required to comply with this requirement.
Remarks
TAX MEASURES 2017/2018