Uganda budget tax highlights
In financial year 2010/11 there will be no increases in duty and tax rates, as a measure to stimulate the economy.
Registration fee for motorcycles has been reduced from Ushs 222,800 to 100, 400 and the Uganda Revenue Authority is to decentralize registration to ease public access. Hopefully, it will reduce bodaboda fares. Or maybe the fares will stay high because of the dust and potholes. So far, no change.
Computer software licenses are now VAT exempt. Computers have been exempt from VAT since 2002 and the supply of computer software has been exempt from VAT since 2003. It’s been a long time coming.
The Income Tax amendment bill contains new provisions for the assessment and collection of petroleum revenues. For those investing in the petroleum mining and processing sector, the objective of the new laws is to ensure adequate provisions within the tax law to handle petroleum revenue streams.
Businesses with genuine outstanding Value added tax claims will be paid refunds by the end of July. The processing of refunds will be speeded up. And from July 2010, all new claims that meet the low risk criteria will be paid within 120 days. So, the refund claims will now be processed within 4 months. Is there a penalty to the Kenya Revenue Authority for failure to process genuine refunds within the 120 days?
Import duty on wheat and rice were lowered by 10%, stamp duty penalties by 5%, mortgages by 0.1% and land rates by 1%.
Import duty on iron and steel, paint dryers and LED lamps and bulbs was removed.
Withholding tax on leases was removed.
Excise duty on beer went up from Ksh45 to Ksh55 and that of malt beer up from Ksh54 to Ksh65.
Agricultural implements are now VAT exempt. Suppliers of goods and services used in building farm infrastructure are exempt from VAT.
Machines and equipment used in the collection, transportation and processing of milk products in Tanzania, are now VAT exempt. The supply of machinery used for the processing of agricultural or dairy products has been VAT exempt in Uganda since 2001.
Tax holidays have been reinstated to investors on importation of some capital goods in the hospitality sector after having been scrapped last year.
There is a 1% reduction in the income tax rate from 15% to 14% and an increase in the minimum wage which will be announced soon by the minister of state for the president’s office and public service management.
Excise duty has been increased by 8% on non-petroleum products including wines and spirits, cigarettes, beers and soda. Oh, the high cost of luxuries.
Taxes on mobile phone handsets and SIM cards have been scrapped but taxes on airtime have increased from 5% to 8%.
East African Community pre budget consultations of the Ministers of Finance
( in the Uganda budget speech on page 64 of the New Vision newspaper dated 11 June 2010).
It was agreed that Common External Tariff (CET) rate of 25% for buses and trucks for Tanzania, Uganda and Rwanda not be applied for 1 year to ease the transport of persons and goods.
Duty remission for the list of Uganda industrial inputs has been extended for 1 year to enable manufacturers to remain competitive.
The CET of 0%, 10% and 25% has been maintained.
The ministers agreed to establish an East African Infrastructure Fund which will be domesticated within the East African Development Bank,
To develop a coordinated framework of engagement with the multi lateral agencies e.g. World Bank, IMF, ADB and others,
To convene a meeting of Ministers for Finance, Permanent Secretaries and Governors to agree on the Road map for the 45 Monetary Union including Macro- economic convergence criteria immediately after conclusion of the budget sessions of partner states; and
To review the sensitive list within five years with a view to reduce the list and preserve the current tariff structure of 0%, 10% and 25%.