Uganda Revenue Authority (URA) has published a list of companies exempted from the 6 per cent withholding tax for the period running January 1 to June 31.
In a press statement published on Monday, the tax body said: “Withholding tax shall not apply to the amount payable for listed companies for the supply of goods and services and payments in respect to Clearing and International Forwarding value of imported goods.
The companies published on the tax body’s website- ura.go.ug, lists over 1,000 companies among them ZK Advertising, Nation Media Group, Mukwano Industries, Barclays Bank Uganda, Nile Breweries, Meera Investments, Akamba Uganda and MTN Uganda among others.
Ms Sarah Banage, the URA assistant commissioner for public and corporate affairs, told Daily Monitor in an interview on Monday that the reason for the exemption is to appreciate firms that possess exemplary and timely compliance.
Withholding duty refers to the amount deducted from an individual’s pay which is transferred to the tax body by his or her employers. URA assesses a company’s tax compliance, upon which it determines which firms shall be given tax exemption especially withholding duty.
Ms Banange said: “It’s good to appreciate companies which meet their tax obligations on time but I also encourage those that were not listed to work towards benefitting from the tax body’s initiative.” According to URA, the list is reviewed annually focusing on a company’s three year record of tax compliance.
In the period under review for a company to be considered, it must not have any arrears in its books and must have timely tax filling. However, the exemption may be revoked should a company or an individual’s compliance become lacking. Tax payers can only benefit from the exemption if they show commitment to timely tax compliance for local duty requirements and customs.
Mr Francis Kamulegeya, the PwC senior country partner said in an interview on Monday that the move is good and acts as an incentive to business operations. Companies that have been exempted from the tax are likely to receive this with relief as the public continues to show concern over a heavy tax burden carried by a few working class people.
Recently this news paper quoted a group of motor vehicle importers who said that URA realises its tax targets not because it works hard but because it heavily taxes a small business sector.