Uganda Unveils New Tax Measures For 2013

more about geneva; font-size: small;”>Reading the budget for the financial year of 2013/2014 at Kampala Serena Hotel on Thursday, information pills Kiwanuka said government was determined to raise revenues, enhance transparency in collection and enforcement, improve compliance and encourage investment.

She also proposed amendments to the tax laws to improve tax administration and enhance compliance.

The Minister proposed widening the scope of withholding agents to capture non-compliant tax persons engaged in economic activities and not registered for income tax purposes.

This measure is expected to generate Shs 5bn.

She further called for the provision of the legal framework through which Uganda Revenue Authority will collaborate with Uganda Registration Services Bureau, Local governments and KCCA to identify taxpayers and collect taxes on small businesses which are hard to reach by URA.


“This is aimed at easing tax administration and enforcing compliance by bringing more taxpayers into the tax net,” she added.

However, the minister suggested the elimination of the VAT exemption on Hotel accommodation to improve tax administration and generate revenues with the view of raising Shs.6 billion as contained in the VAT (Amendment Bill) 2013.

She also proposed to apply VAT on the supply of water to generate revenues Shs.8 billion.

“This should not affect the prices paid by the majority of low-income consumers, as the price of a jerrycan from National Water and Sewerage Corporation (NWSC) will amount to about Shs.40 at communal taps,” said Kiwanuka.

VAT will also be introduced on Wheat and wheat flour to raise Shs.30 billion.

Excise Duty

The Minister proposed to increase excise duty on petrol and diesel by 50 shillings, a move aimed at raising about Shs.72 billion.

She also moved restore excise duty on kerosene at 200 shillings per litre to discourage the practice of adulterating diesel by mixing it with kerosene, saying the measure would bring in about Shs15bn.

Kiwanuka also proposed to increase excise duty on cigarettes from Shs 22,000, 25,000 and 55,000 for Soft cup (whose local content is more than 70 percent of its constituents), other soft cup and Hinge lid respectively to Shs. 32,000, Shs. 35,000 and Shs. 69,000 to collect about Shs3.2 bn.

And in a bid to curb the excise duty evasion by some unscrupulous distillers of spirits, Kiwanuka proposed to increase the excise duty from 70 percent to 140 percent at importation.

The Minister told Parliament she intended to impose excise duty at the rate of 20 percent on revenue from activities akin to gambling to expand the tax base by shs 8 billion.

An excise tax of 10 percent on fees charged on transfer of money by mobile network operators and other money transfer operators and widen the tax base will also be put in place.

The Minister also moved to impose an extra 30,000 shillings on stamp duty on Third Party insurance Policies for motor vehicles to generate about Shs. 12 billion and also increase motorcycle registration fees by 120,000 Shillings to raise about Shs. 8.64 billion.

Motor vehicle registration fees will be raised by 200,000 Shillings to generate about Shs. 8 billion and an International Calls Levy on international incoming calls to generate about Shs.43 billion.

Lotteries and Gaming

The Finance Minister concurred there has been unprecedented development in the lotteries and Gaming industry in the country which necessitated a strong regulatory framework to ensure that investments in the sector flourish but at the same the public, especially minors and those not keen to participate, are protected from unscrupulous dealers.

The Ministry of Finance will present necessary amendments to Parliament.

She also revealed that during the coming financial year the value chain for petroleum and minerals sector will be reviewed with the aim of ensuring that Government gets maximum benefit from the sector.

And as part of its efforts to promote investments, welfare of Ugandans, equity and enhance compliance and tax administration, Government has proposed new excise, stamps duty, Lotteries, Gaming and Pool Betting laws and a Tax Procedures Code.

In Financial Year 2013/14, Government will comprehensively review the exemptions in the VAT Act and the Income Tax Act with the aim of eliminating them to increase revenue and improve administration.

Government will also undertake a study on VAT being collected currently in comparison to its potential (VAT Gap). In addition a similar study will be undertaken on income tax which will form a basis of improving the law to enhance performance and offer better services to taxpayers.

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