URA, city traders agree on tax payment mode

Ms Doris Akol, URA commissioner general

Kampala- To enhance compliance, Uganda Revenue Authority will allow informal players joining the tax bracket in the new financial year 2015/16 to clear their tax obligations in instalment's.
.According to Kampala City Traders Association chairman, Mr Everest Kayondo, most of his members, majority of whom operate informally, would have defaulted if this compromise was not taken into consideration.
Speaking on a sideline interview in Kampala on Monday where Uganda Revenue Authority was holding a post-Budget analysis, Mr Kayondo said: “Despite the fact that the revenue is quite high, considering that the cost of doing business is high in Uganda, the good news is that the payment will be in installments.”

He continued: “We would prefer to pay the taxes in installments of about Shs150,000 after every quarter of the financial year. If that is done, I think we will comply.”

According to the 2015/16 tax measures, businesses in Kampala and the city divisions that garner a turnover of between Shs10 million and Shs50 million, will be mandated to pay revenue ranging between Shs200,000 and Shs500,000 every financial year.

Business in the municipalities with the aforementioned turnovers will be required to pay taxes ranging between Shs150,000 and Shs400,000 while those in towns and trading centres will remit between Shs100, 000 and 300,000. This measure is intended to widen the tax base by bringing players in the informal segment into tax bracket.

In a discussion with the Commissioner for domestic taxes, Mr Henry Saka, it emerged that the deal with informal traders to clear their tax obligations in installments is an easy one to pull off.

He said: “That is an administrative decision which we will handle without any hesitation.”
Just before the Budget was passed, in a meeting to explain taxation and its enforcement, downtown traders asked URA to simplify their tax computation.

They said they do not understand the current assessment, suggesting that it should be a flat rate, like the licence levy. This, if done, they said, will enhance compliance.

URA Commissioner General Doris Akol said the post-Budget analysis by URA, the first of its kind, was aimed at explaining the tax measures in an understandable way by tax collectors.

TAXES DIFFERENT BUSINESSES WILL PAY
Trade Shs35m-Shs50m Shs20m-35mShs10m-Shs20m
General trade 500,000 400,000 250,000
Carpentry 500,000 400,000 250,000
Garages 550,000 450,000 300,000
Salons 550,000 450,000 300,000
Restaurants 550,000 450,000 300,000
Clinics 550,000 450,000 300,000
Drugshops 500,000 400,000 250,000
Others 450,000 300,000 200,000