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Uganda Budget Speech for Financial Year 2022/2023 Delivered — Orbitax Tax News & Alerts

On 14 June 2022, Uganda's Minister of Finance, Planning, and Economic Development, Matia Kasaija, delivered the Budget Speech for Financial Year 2022/2023. The tax measures for financial year 2022/23 have already been enacted and include the following as summarized in the speech:

Income Tax

  • The corporate income tax exemption for the Bujagali Hydro Power Project has been extended for 1 year up to 30 June 2023 in order not to increase electricity tariffs for power that the Project generates;
  • The Income Tax Act has been amended to streamline the rental income tax regime for individuals and non-individuals as follows:
  • a zero rental income tax rate for individuals that earn annual rental income not exceeding UGX 2,820,000 and a rate of 12% of rental income exceeding that amount; and
  • for rental businesses, a 30% rental income tax rate on rental income with deductible expenses capped to 50% for each year of income, with any excess expenses not allowed to be carried forward to a subsequent year of income.

Value Added Tax

  • VAT exemptions are introduced for:
    • the supply of oxygen cylinders or oxygen for medical use;
    • the supply of assistive devices for persons with disabilities; and
    • the supply of airport user services charged by the Civil Aviation Authority;
  • Cash basis accounting is allowed for suppliers that supply goods and services to the government in order to hedge against the risk of interest and penalties arising from delayed payments by the government; and
  • The VAT exemption on imported services used in the provision of an exempt supply is repealed in order to encourage businesses to use local suppliers of services such as information and communications technology services.

Tax Procedures Code

  • Penalties are introduced for failing to provide information for purposes of Automatic Exchange of Information to improve compliance; and
  • Penalties are introduced for failing to adhere to requirements for the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and Digital Tax Stamps to combat tax evasion, smuggling, and other vices.

Stamp Duty

  • NIL stamp duty is provided on the following instruments:
    • agreements relating to the deposit of title deeds or personal property or goods to another as a pledge or as security for a sum of money borrowed;
    • agricultural insurance policies; and
    • security bonds or mortgage deeds executed by way of security for the due execution of an office, or to account for money or other property received by virtue of security bonds or mortgage deeds executed by surety to secure a loan or credit facility.

The budget measures for financial year 2022/23 generally apply from 1 July 2022. Additional details will be published once available.