What you need to know:
- Farmers with an annual turnover of Shs150m are required to get TINs that they must quote in all business transactions
Uganda Revenue Authority (URA) has said any person dealing in agricultural business with an annual turnover of Shs150m must acquire a tax identification number (TIN) for onward tax assessment and payment.
In a tax sensitisation notice published early this week, URA indicated that any person dealing in agricultural business must acquire a TIN, which they must at all time quote in all business transaction documents.
Such persons, URA added are also required to keep business records for a minimum of five years, file income tax returns and pay the tax due and withhold pay as you earn at the appropriate rates from employees earning above Shs235,000 per month.
“Commercial farmers are required to register for value added tax (VAT), to enable them claim a refund on VAT on farming input,” the notice reads in part.
URA has in the last three years sought to widen the tax base by bringing taxable categories of business in the tax fold, while at the same time putting in place measures to close tax leakages. In December last year, URA warned persons earning an income from entertainment to obtain TINs or face penalties.
Mr Robert Wamala Lumanyika, the URA acting manager public and corporate affairs, told Monitor yesterday that whereas many people have claimed this is a new tax, it has been in place and URA was only plugging into areas that have previously been low on compliance to increase the tax base.
Under the Income Tax Act, he said, everyone with a chargeable income is supposed to pay income tax.
“So, if a person or business sells birds, maize or matooke and earns an annual turnover of, say Shs10m you will not be expected to file the return. But if you exceed Shs150m, you must file,” he said, noting that this is because farmers are under the category of small taxpayers.
However, he noted, farmers who are into commercial agriculture, will be required to register for valued added tax given that they are adding value, some of whom are entitled to VAT refunds on certain items.
Former agriculture minister Victoria Sekitoleko, yesterday said URA should get out of Kampala and make use of make use government programmes to educate farmers about the benefits and why they should pay taxes.
“Instead of URA waiting to terrorize farmers for taxes, they should train them through town-halls. Once they have been educated, then they [farmers] will happily pay taxes without looking like they are being penalised for supporting the country to produce what we eat,” she said.