In recent years, Uganda has been implementing various taxation laws and policies aimed at promoting economic growth, increasing revenue collection, and attracting foreign direct investments.
These measures ta*@ug.com T +256 (0) 200 907333\nDisclaimer: This article is developed as an information resource summarising pronouncements issued by the Ministry of Finance, Planning & Economic Development. This document is intended as a guide only and the application of its contents to specific situations will depend on the particular circumstances involved. While every care has been taken in its presentation, personnel who use this document to assist in evaluating compliance with applicable laws and regulations should have sufficient training and experience to do so. No person should act specifically on the basis of the material contained herein without considering and taking professional advice. Neither Grant Thornton Uganda, nor any of its personnel nor any of its member firms or their partners or employees, accept any responsibility for any errors this document might contain, whether caused by negligence or otherwise, or any loss, howsoever caused, incurred by any person as a result of utilising or otherwise placing any reliance upon it .\nHow can we help you?\nWhereas the above analysis in respect of bills which are currently under discussion by the Parliament, Grant Thornton Taxation Service Limited is available to provide further guidance as well as interpretation on current laws wherever required.\nSolomon Rukundo\nE ta*@ug.com T +256 (0) 200 907333\n©2023 Grant Thornton International Ltd. All rights reserved.\nTax Procedures Code (Amendment) Bill, 2023\nThe Hon. Minister of Finance, Planning & Economic Development tabled the Tax Amendment Bills, 2023. The Bills are due for discussion in Parliament and if passed into law, will take effect from 1 st July 2023.\nPlease find ahead a brief of what is contained in the Tax Procedures Code Bill, 2023 including our understanding of its implications and comments.\n2 Tax Alert\nNo Section Amendment\n1 Amendment of section 19B Penalty for manufacturers of gazetted products who temper with DTS machines.\n2 Amendment of section 39 Harmonizing of interest capping provisions across the different tax legislations.\n3 Insertion of section 40D Waiver of interest and penalty for taxpayers who comply by paying their outstanding principal taxes.\n4 Amendment of section 42 Denial of the right of a taxpayer to provide information during objections which was not provided during an investigation.\n5 Amendment of section 62H Penalty for taxpayers who fix and activate tax stamps wrongly.\nExecutive summary of key proposed amendments:\n3 Tax Alert\n1. Amendment of section 19B\nThe principal Act is proposed to be amended in section 19B by inserting immediately after subsection (6) the following—\n“(6a) A person who makes an unauthorised\ninterference to, or tampers with, a digital tax stamps machine commits an offence and is liable, on\nconviction, to a fine not exceeding one thousand five hundred currency points or imprisonment not\nexceeding ten years.”\nImplication/Comment: The proposed amendment imposes a penalty on the manufacturers of gazetted products implicated in\ntampering with DTS machines. The maximum penalty of UGX 30,000,000 or maximum imprisonment of ten years upon conviction.\nThis showcases how lawmakers are serious about accurate compliance under the Digital Tax Stamps regime.\n2. Amendment of section 39\nSection of 39 of the principal Act is proposed to be amended by inserting immediately after subsection (3) the following—\n“(4) For the avoidance of doubt, where interest due and payable under a tax law as at 1st July, 2017 exceeds the aggregate of the principal tax and the penal tax, the interest in excess of the aggregate is waived.”\nImplication/Comment:\nSection 136(8) of the Income tax Act and Section 65A(2) of the VAT Act contain provisions of limiting the interest that can be charged to a taxpayer. These provisions are now proposed to be repealed and inserted in TPC Act which collates all procedural aspects of tax legislation. .\n3. Insertion of section 40D\nThe principal Act is proposed to be amended by inserting immediately after section 40C the following— “40D Waiver of interest on payment of principal tax\n(1) The Commissioner shall waive the payment of interest and the penalty by a taxpayer, where the taxpayer voluntarily pays the principal tax outstanding at 30th June, 2023, by 31st December, 2023. (2) The Commissioner shall waive the payment of interest and the penalty by a taxpayer on a pro-rata basis, where the taxpayer voluntarily pays part of the principal tax outstanding at 30th June, 2023, by 31st December, 2023.”\nImplication/Comment: The bill proposes a waiver of interest and penalty for taxpayers who comply by paying their principal tax outstanding (if any) as at 30 th June 2023. This is to cure the ongoing issues of outstanding tax liabilities that are appearing in the e-Tax ledgers of the taxpayers in the books of URA. Although the attempt to clear the matter is welcome, in our opinion, this proposal raises an issue which requires clarification:\nAs a result of the way in which URA applies the waiver of penalty and interest under Section 40C, the principal tax in most cases remains in dispute. This was exhibited in K-Files v URA TAT No 69 of 2021, in which it was held that URA was misapplying the waiver under Section 40C by misinterpreting Section 38 of the Tax Procedures Code Act. This amendment does not cure the\ncontroversies arising from this misapplication of 40C due to the implications of Section 38(2) of the TPC Act. In our opinion, an amendment that provides for the proper application of Section 40C is more appropriate.\nDetails of all the amendments with their implications and comments.\n4 Tax Alert\n4. Amendment of section 42 Section 42 of the principal Act is proposed to be amended by inserting immediately after subsection (3) the following—\n“(4) Where a taxpayer fails to provide the information requested under this section, the taxpayer shall not be allowed to provide that information at objection to a tax decision or during alternative dispute resolution procedure proceedings.”\nImplication/Comment: This proposed amendment attempts to deny a taxpayer the right to provide information at objections that was not provided during an investigation. This proposed amendment raises constitutional challenges as it would deny a taxpayer a fair hearing at the stage of objections or Alternative Dispute Resolution.\nIt is unclear what such a provision would achieve. Tax should be based on facts that may be proven by documentation regardless of when it is submitted. If new documentation is available at the stage of objections it is unclear why URA would choose to reject it if it clarifies the taxpayer’s true tax position. If implemented, it would essentially result in URA collecting taxes not properly proven as owed by the taxpayer simply because they have been denied the right to present documentation reflecting their tax position.\n5. Insertion of section 62H: Penalty for taxpayers who fix and activate the tax stamp wrongly.\nThe principal Act is proposed to be amended by inserting immediately after section 62G the following—\n“62H. Fixing tax stamp on wrong goods, brand or volume A taxpayer who fixes and activates a tax stamp on a wrong good, brand or volume other than a good, brand or volume for that tax stamp commits an offence and is liable, on conviction, to a fine not exceeding five hundred currency points or imprisonment not exceeding three years or both.”\nImplication/Comment: This penalizes a taxpayer who fixes and activates a tax stamp on a wrong good, brand or volume other than the correct good, brand or volume.\ngtuganda.co.ug\n© 2023 Grant Thornton Taxation Services Limited. All rights reserved.\n‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions.\nContact us\nRikin Shah\nE ta*@ug.com T +256 (0) 200 907333\nDisclaimer: This article is developed as an information resource summarising pronouncements issued by the Ministry of Finance, Planning & Economic Development. This document is intended as a guide only and","type":"upload","title":"Income Tax (Amendment) Bill, 2023","canShow":true,"publishedDate":"","url":"","previewUrl":"","year":0,"tally":null,"abstract":"","journal":"","relevanceScore":4.0703125,"categoryFinished":false}">(Income Tax (Amendment) Bill, 2023, n.d)have included broadening the tax base, increasing progressiveness, strengthening compliance frameworks, and improving the rule of law . Additionally, the government has also been focusing on addressing tax avoidance and evasion, as these practices have been limiting the resources generated through taxation (Tomomewo et al., 2022).
Studies have shown that tax evasion in Uganda is primarily a result of a lack of mechanisms in place to effectively collect taxes. This lack of enforcement and collection mechanisms has allowed some individuals and businesses to evade or avoid paying their fair share of taxes, ultimately impacting the country’s economic condition and hindering government tax revenues.
different new tax laws
In response to these challenges, Uganda has recently introduced several new taxation laws and regulations aimed at combating tax evasion and improving revenue collection.
One of the key changes is the introduction of the Tax Procedures Code Act, which outlines guidelines and procedures for tax administration. This act aims to streamline tax processes, enhance transparency, and reduce opportunities for tax evasion. Additionally, the Tax Amendment Bills have been tabled in Parliament and are currently under discussion. These bills, if passed into law, will take effect from 1st July 2023 and will introduce amendments to the existing tax laws in Uganda, including the Lotteries and Gaming Bill. The Lotteries and Gaming Bill, 2023 proposes amendments to the Lotteries and Gaming Act, 2016 ta*@ug.com T +256 (0) 200 907333\nHow can we help you?\nWhereas the above analysis in respect of bills which are currently under discussion by the Parliament, Grant Thornton Taxation Service Limited is available to provide further guidance as well as interpretation on current laws wherever required.\nSolomon Rukundo\nE ta*@ug.com T +256 (0) 200 907333\nLotteries and Gaming (Amendment) Bill, 2023\nThe Hon. Minister of Finance, Planning and Economic Development tabled the Tax Amendment Bills 2023. The bills are due for discussion in Parliament and if passed into law, will take effect from 1 st July 2023.\nPlease find below a brief of what is contained in the Lotteries and Gaming (Amendment) Bill, 2023 including our comments and its implications:\n2 Tax Alert\nProposed Amendments:\nAmendment to Schedule 4;\nThe Lotteries and Gaming Act, 2016 is amended by substituting Schedule 4 with the following— “Rate of tax\n1. Twenty percent of the total amount of money staked less the payouts (winnings) for the period of filing returns\nfor a betting activity.\n2. Thirty percent of the total amount of money staked less the payouts (winnings) for the period of filing returns\nfor the gaming activity.”\nImplications / Comments: This proposed amendment is linked to the proposed amendment of Section 118C of the Income Tax Act which eliminates the 15% withholding tax from gaming. This comes out from;\n• the interpretation of what amounted to winning for the purposes of withholding tax payable on gaming services; and\n• at what point it should be collected?\nIt was a challenge to apply the tax the way the authority desired as each game would have to be stopped at every round to administer withholding tax for each player who won yet some of the games like slot machines ran up to 20 spins per minute with each spin constituting a separate bet. Further, wins from games are usually wagered over and over again and clients wanted to have lost wagers offset on a wager won prior to being taxed yet the law does not cover that. Section 118C did not define at what point a winning should be determined which raised questions of whether it was at every game or at the end of the day when the punter wanted a cash out.\nThe purpose of this amendment is therefore to ease administration by removing the withholding tax under Section 118C of the Income Tax Act from gaming in the Casinos and instead increasing the tax rate on gaming from 20% to 30% under the Lotteries and Gaming Act.\ngtuganda.co.ug\n© 2023 Grant Thornton Taxation Services Limited. All rights reserved.\n‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions.\nDisclaimer:\nThis article is developed as an information resource summarising pronouncements issued by the Ministry of Finance, Planning & Economic Development. This document is intended as a guide only and the application of its contents to specific situations will depend on the particular circumstances involved. While every care has been taken in its presentation, personnel who use this document to assist in evaluating compliance with applicable laws and regulations should have sufficient training and experience to do so. No person should act specifically on the basis of the material contained herein without considering and taking professional advice. Neither Grant Thornton Uganda, nor any of its personnel nor any of its member firms or their partners or employees, accept any responsibility for any errors this document might contain, whether caused by negligence or otherwise, or any loss, howsoever caused, incurred by any person as a result of utilising or otherwise placing any reliance upon it .\nHow can we help you?\nWhereas the above analysis is in respect of bills which are currently under discussion by the Parliament, Grant Thornton Taxation Service Limited is available to provide further guidance as well as interpretation on current laws wherever required.\nContact us\nSolomon Rukundo\nE ta*@ug.com T +256 (0) 200 907333\nAnkit Jangla\nE ta*@ug.com T +256 (0) 200 907333","url":"","title":"Income Tax (Amendment) Bill, 2023","publishedDate":"","authorNames":[]}">(Income Tax (Amendment) Bill, 2023, n.d). These amendments aim to strengthen regulatory oversight in the lottery and gaming industry, improve revenue collection, and prevent tax evasion.
One of the notable provisions in the Tax Amendment Bills is the introduction of a tax stamp requirement. This requirement will apply to certain goods and products, including alcoholic beverages, tobacco products, and soft drinks. The tax stamp will serve as a measure to ensure that the correct taxes are paid on these goods and will help combat the illicit trade of these products.
Another significant change in the taxation laws is the inclusion of inbound international calls in the list of exempted items from duty. This means that taxes will no longer be imposed on international calls made to Uganda, which is expected to benefit businesses and individuals who rely on international communications for their operations or personal connections.
Income Tax (Amendment) Bill, 2023. (n.d)
Tomomewo, A O., Omidiji, O D., & Abiola, O A. (2022, December 9). Effect of Voluntary Assets and Income Declaration Scheme (VAIDS) on Economic Growth of Nigeria. https://scite.ai/reports/10.6007/ijarbss/v12-i12/15796
