The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | A section of legislators on the Finance Committee of parliament have opposed government’s proposal to compel landlords and companies with more than one property to declare income from each asset separately.
The proposal that seems to be an attempt by authorities to catch landlords, who have been hiding behind making losses to evade taxes, is among a raft of new tax measures in the Income Tax (Amendment) Bill, 2019 formally presented to the committee Wednesday by the State Minister for Planning, David Bahati.
If approved by parliament, the new proposal will come into effect on July 1st 2019, the commencement of the new financial year. Apparently, landlords declare earnings from different properties in a lump sum.
Only those whose properties don’t exceed the Shillings 2.8 million threshold after deducting 20 percent in allowable expenses will be exempted from taxes.
For those whose earning is above the threshold, their rental income would be taxed 20 percent for individuals and 30 percent for corporate companies.
Rental income is the total amount of money derived by a person/company from the lease of immovable property (land and or buildings) excluding all expenditure incurred in respect of the property.
While appearing before the Finance Committee of parliament chaired by the Rubanda East MP, Henry Musasizi, Moses Kaggwa, the Director Economic Affairs explained that the new proposal is meant to ensure that property owners don’t offset losses on one property using income from another profitable property.
However, Amos Lugoloobi, the Ntenjeru South MP opposed the proposal, saying property developers should account for the output of their properties together.
Lugoloobi, who doubles as the Budget Committee Chairperson, asked government to provide incentives to private developer instead of frustrating them.
He pointed out that government had failed in its attempt to provide affordable housing to the citizens prompted the private sector to step in and fill the gap.
Budadiri West MP, Nathan Nandala Mafabi also objected to the proposal arguing that most private developers mortgage one property to develop another.
David Bahati, the State Minister for Finance in charge of Planning insisted that the new property proposal is encouraging, saying it would be better for a landlord to account for each property.
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