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Kampala, Uganda | THE INDEPENDENT | The Minister of State for Planning David Bahati has confirmed several radical tax proposals and amendments to the Income tax Bills, including increase excise duty on diesel and petrol by Sh100 for a litre to generate Sh196.4 billion.
Another key new tax proposal is the Sh200 daily levy on social media – to bring in Sh284 billion as Minister of Finance, Planning and Economic
Development New plans to generate an extra Shs 770 billion for its Sh 29 trillion budget. The other measure is a ban on imported cars older than eight years old but which is expected will generate a Sh182 billion loss
The tax amendment bills 2018 have been tabled by the Minister of Finance, Planning and Economic Development and are currently being discussed in Parliament. These include: The Income Tax (Amendment) Bill, The Value Added Tax (Amendment) Bill, The Excise Duty (Amendment) Bill, The Tax Procedures Code (Amendment) Bill, Gaming (Amendment) Bill, Stamps Duty (Amendments) Bill, Tax Appeals Tribunal (Amendment) Bill, and Traffic & Road Safety (Amendment) Bill.
The Minister of State for Planning, David Bahati on Tuesday outlined the proposed amendments to the Income tax Bills to Parliament’s Committee on Finance.
He said the the new tax measures should generate Shs 770 billion for government while new tax policy measures $272 billion, for a total Sh 1 trillion.
Here is a summary of the new measures proposed.
INCOME TAX
1. Introduce an alternative minimum tax of 0.5% of annual gross income for companies that post losses for 7 consecutive years. This is expected to raise Shs 7 billion
2. Introduce 10% final withholding tax on commissions by telecommunication companies to mobile money and airtime agents – this will raise 11.3 billion.
3. Reinstate corporation tax on Saccos – this will generate Shs 10 billion.
4. Strengthen the effectiveness of the current limitation of excessive interest deduction – to generate Shs 14,5 billion.
5. Impose tax on direct or indirect sale of an asset connected to Uganda by a non-resident – this is expected to generate Shs 5 billion.
6. Apply withholding on all winnings in sports betting and gaming – this will generate Shs 15 billion
7. Enforcement of 1% withholding tax on persons engaged in agriculture – to generate Shs 15 billion.
8. Align tax treatment of returnable containers used by manufacturers – to generate Shs 5 billion.
EXCISE DUTY
1. Introduce equivalent tax rates for ad valorem rates on spirits and wines – to generate Shs 5 billion
2. Introduce excise duty on opaque beer (kibuku) – to generate Shs 2.3 billion
3. Impose 15% excise duty on all juices including powders – to generate Shs 1 billon.
4. Impose Shs 200/litre excise duty on cooking oil – to generate Shs 3 billion.
5. Harmonise excise duty of 12% on all telecomm services – to generate Shs 30 billion.
6. Increase excise duty on diesel and petrol by Shs 100/litre – to generate Shs 196.4 billion.
7. Increase excise duty on mobile money and bank charges from 10% to 15% – to generate Shs 45 billion.
8. Impose Shs 200,000 excise duty on motorcycles at first registration – to generate Shs 8 billion
9. Levy 1% levy on mobile money – to generate Shs 115 billion.
10. Impose Shs 200 daily levy on over the top (OTT) i.e social media – to generate Shs 284 billion.
VAT
1. Foreign based remote service providers to account for VAT in Uganda – to generate Shs 5 billion.
2. Exclude goods for private use from the scope of the payment provisions – to generate Shs 10 billion.
3. Oblige MDAs (ministries, departments and agencies) to withhold VAT on their purchases – to generate Shs 40 billion.
4. Carry forward VAT offsets – to generate Shs 30 billion.
Non-Tax Revenues (NTR)
1. Increase motor vehicle first registration from Shs 1.2 million to Shs 1.3 million – to generate Shs 4 billion.
2. Environmental levy to include goods vehicles over 5 tonnes – to generate Shs 20 billion.
3. Ban of motor vehicle imports – to generate Shs 182 billion loss
CUSTOMS
1. Common External Tarrif (CET) adjustments – to generate Shs 50 billion
2. Impose export levy of $0.4 (about Shs 1500) per kilogram of wheat, maize, rice. cotton – to generate Shs 20 billion.
