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Uganda Withholding Agents Required to Carry Out Compliance Checks and Settle Outstanding Liabilities — Orbitax Tax News & Alerts

The Uganda Revenue Authority (URA) in a communication that was issued through a public notice on 17 August 2020, has reminded designated withholding tax agents to withhold tax on payments for goods and services made to any person that, in aggregate or as a single payment, exceed UGX 1,000,000. Tax at a rate of 6% on the gross amount must be deducted by the agent and remitted to the URA within 15 days after the end of the month in which the transaction took place. If the agent fails to deduct and remit the tax, it will be liable for the tax not withheld.

For withholding purposes, taxpayers are required to confirm whether they are designated withholding agents as provided for in section 119 of the Income Tax Act (ITA), Cap. 340. Taxpayers are then required to amend their tax registration details on the tax identification number to include withholding tax. Also, all agents are advised to carry out a compliance check from 15 August to 15 September 2020, where they should:

  • review both past and current transactions and identify those that are subject to withholding tax in accordance with the ITA and file or amend the tax returns and charge withholding tax thereon; and
  • pay any outstanding withholding tax which was not remitted to the URA.