Domestice Tax Laws of Uganda (2017 Edition)

FOR PUBLIC RELEASE
By Joseph O. Okuja at 9:51:30 AM, 23/06/2017
DOMESTIC TAX LAWS

OF UGANDA
Joseph O. Okuja
An Updated and Tracked Compendium containing a
reproduction, with amendments, of the Income Tax
Act, the Value Added Tax Act, the Excise Duty Act, the
Tax Procedures Code Act, and the Lotteries and Gaming
Act. It also contains Subsidiary Legislation and Practice
Notes, Extracts from Finance Acts, Stamp Duty rates
and the Exemptions Schedule under the East African
Community Customs Management Act.
TASLAF Advocates & Consultants

Plot 1, Wampewo Close, Kololo
+256(0)392 081 345
: www.taslaf.com
: info@taslaf.com ©2017 EDITION
Domestic Tax Laws Uganda
While making reference to this compendium, the following adaptations

and general principles should be noted:
Tax Laws are structured into Parts, Sections and Schedules. Parts distinguish the categories
of information for ease of reference. Each Part deals with a specific subject area and
prescribes the rules or principles affecting the subject area. Sections have headings which
describe the subject matter dealt with in the Section, and are further divided into
subsections for purposes of organising information in the section. Subsections may be
further divided in paragraphs; and paragraphs into sub-paragraphs. Schedules provide for
rates of tax and detailed descriptions of the subject matter under the different Parts and
sections.
The enactment, passing or making of a law, and its operation or commencement are two
different things. An enactment becomes law on the day it receives assent of the President.
However, a law only begins to operate from the date of its commencement which is
normally provided within the law itself. In the absence of any commencement provision, an
Act comes into operation on the date of its assent. As a general rule, all provisions are
considered to be prospective from the date of commencement, except when made
retrospective by express words in the law or by necessary intention. In case of any
ambiguity, a provision should be construed as being prospective. Retrospective operation
should not be given to a law if it takes away or impairs an existing right, or creates a new
obligation, or imposes a new liability. The only exception to this general rule would be for
matters of procedure.
The Amendment Acts relied on for insertions, additions, substitutions or repeals in this
reproduction are indicated as side notes against affected provisions. An Amendment Act of
any year normally has a commencement and effective date of 1st July of that year (i.e. the
first day of the financial year), unless stated otherwise.
In this compendium, substitutions or insertions of words within original provisions are

indicated in italicised font. Substitutions replacing or substantially altering the wording of
existing or original provisions or sections are indicated in normal font, but with side notes
for the Amendment Act relied on. Insertions of new provisions are also indicated in normal
font. Repealed substantive provisions, words or terms have not deleted but indicated in
faded font, while repealed procedural provisions have been deleted. This is because
amended or repealed substantive provisions are still relevant for application to tax periods
prior to the amendment or repeal. Amendments affecting procedure can be applied
retrospectively to obligations that are still outstanding at the time the amendment takes
effect, unless the circumstances of the obligation prevent, by implication, its application.
As a general application rule, all amendment Acts are considered to be prospective except
when made retrospective by express words or by necessary intendment. However, it is
important to note that the application of an amendment to an event or transaction which is
continuing and not complete when a new provision comes into force does not amount to
giving a retrospective operation to the law if, it taxes that ongoing or continuing event or
transaction.
Feel free to contact me if and when you encounter challenges in using this compendium.
i
Disclaimer
Tax laws are among the most dynamic pieces of legislation because they are
amended almost every year to serve various economic and social goals of the
government. This necessitates that the laws are regularly updated with the
various amendments for ease of reference. This compendium contains an up-
to-date reproduction of the Income Tax Act, Cap 340, the Value Added Tax
Act, Cap 349, the Excise Duty Act 2014, and the Tax Procedure Code Act,
2014. It also includes subsidiary legislation and practice notes under different
the tax laws. In updating this version, the “Reprint of the Income Tax Act
and the Value Added Tax Act” as at 19th October 2012, by the Uganda
Law Reform Commission was used as an authentic reference for conformity;
and all the amendments to the principal Acts and Regulations have been
incorporated to date.
This compilation is the personal effort of the undersigned. It is neither

prepared by Order of the Government of Uganda nor does it purport, if
printed, to have been printed by the Government Printer or by or under the
authority of the Attorney General or Parliament, and cannot therefore, under
any circumstances, be a substitute for a Publication by the Government of
Uganda. While great care has been taken to ensure that this reproduction is
free of errors of omission or commission, it is my humble request that you
notify the undersigned in the event that you encounter any errors while
making reference to this Handbook.
Any person, who relies on this compendium for any purposes including legal
proceedings, is responsible for ensuring its accuracy, novelty and
completeness by conducting an independent verification with the Principal
Laws of Uganda as enacted by Parliament and/or published by the Uganda
Law Reform Commission. Neither the Government of Uganda nor the
Undersigned shall be held liable for any misrepresentations arising out of its
use.
FOR GOD AND MY COUNTRY
Joseph O. Okuja
TASLAF ADVOCATES & CONSULTANTS
T|+256 (0) 750 333 800 | (0) 776 440 120
E |ojokuja@gmail.com
Income Tax Act Cap.340
INCOME TAX ACT | Cap 340

Laws of Uganda
An Act to consolidate and amend the law relating to income tax and for
other connected purposes.
Commencement: 1st July 1997

Arrangement of Sections
PART I – PRELIMINARY
1. Application of the Act

2. Interpretation
3. Associate
PART II – IMPOSITION OF TAX
4. Income tax imposed

5. Rental tax imposed
Rates of Tax
6. Rates of tax for individuals

7. Rate of income tax for companies
8. Rate of income tax for trustees and retirement funds
PART III – RESIDENTS AND NON-RESIDENTS
9. Resident individual
10. Resident company
11. Resident trust
12. Resident partnership
13. Resident retirement fund
14. Non-resident person
PART IV – CHARGEABLE INCOME
15. Chargeable income

16. Chargeable income arising from insurance business
17. Gross income
18. Business income
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19. Employment income

20. Property income
Exempt Income
21. Exempt income
Deductions
22. Expenses of deriving income

23. Meals, refreshment and entertainment expenditure
24. Bad debts
25. Interest
26. Repairs and minor capital equipment
27. Depreciable assets
27A. Initial allowance
28. Initial allowance
29. Industrial buildings
30. Start-up costs
31. Costs of intangible assets
32. Scientific research expenditure
33. Training expenditure
34. Charitable donations
35. Farming
36. Mineral exploration expenditures
37. Apportionment of deductions
38. Carry forward losses
PART V – TAX ACCOUNTING PRINCIPLES
39. Substituted year of income

40. Method of accounting
41. Cash-basis taxpayer
42. Accrual-basis taxpayer
43. Prepayments
44. Claim of right
45. Long-term contracts
46. Trading Stock
47. Debt obligations with discount or premium
48. Foreign currency debt gains and losses
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PART VI – GAINS AND LOSSES ON DISPOSAL OF ASSETS
49. Application of Part VI

50. Gains and losses on disposal of assets
51. Disposals
52. Cost base
53. Special rules for consideration received
54. Non recognition of gain or loss
PART VII – DETERMINING CHARGEABLE INCOME
55. Income of joint owners

56. Valuation
56A. Other methods of allocating costs and revenue
57. Currency conversion
58. Indirect payments and benefits
59. Finance leases
60. Exclusion of doctrine of mutuality
61. Compensation receipts
62. Recouped expenditure
PART VIII – PERSONS ASSESSABLE
Taxation of Individuals
63. Taxation of individuals

64. Income splitting
Taxation of Partnerships and Partners
65. Principles of taxation of partnerships

66. Calculation of partnership income or loss
67. Taxation of partners
68. Formation, reconstitution or dissolution of a partnership
69. Cost base of partner’s interest
Taxation of Trusts and Beneficiaries
70. Provisions relating to taxation of trusts and beneficiaries

71. Principles of taxation for trusts
72. Taxation of trustees and beneficiaries
73. Taxation of estates of deceased persons
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Taxation of Companies and Shareholders
74. Principles of taxation for companies

75. Change in control of companies
76. Dividend stripping
77. Rollover relief
PART IX – INTERNATIONAL TAXATION
78. Interpretation of Part IX

79. Source of income
80. Foreign employment income
81. Foreign tax credit
82. Taxation of branch profits
83. Tax on international payments
84. Non-resident public entertainers or sports persons
85. Tax on payments to non-resident contractors or professionals
86. Non-residents in shipping, air transport, or telecom services
87. General provisions on taxes imposed under Sections 83, 84, 85, & 86
88. International agreements
89. Thin capitalisation
PART IXA – TAXATION OF PETROLEUM OPERATIONS
89A. Interpretation
Mining Operations
89B. Taxation of mining licenses

89C. Limitations of deductions relating to mining operations
89D. Mining exploration expenditure
89E. Mining extraction expenditure
89F. Rehabilitation expenditure
Petroleum Operations
89G. Taxation of petroleum licenses

89GA.Limitations of deductions relating to petroleum operations
89GB.Petroleum exploration expenditure
89GC.Petroleum development expenditure
89GD.Decommissioning expenditure
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Rules applicable to Mining and Petroleum Operations
89GE. Farm-outs
89GF. Indirect transfers of interests
89GG.Taxation of contractors
89H. Withholding tax
89I. Tax accounting principles
89J. Allocation of costs and expenses
89K. The principle of ring fencing
89KA.Valuation and measurement of petroleum
89L. Allowable currencies
89M. Consolidation principle
89MA.Application of sections 111 to 113 and the Tax Procedures Code Act
89N. Carry forward losses
89O. Returns
89OA.Assessments, objections and appeal
89P. Collection and recovery
89Q. Classification, definition and allocation of costs and expenditures
89QA.Failure to furnish returns
89QB. Making false or misleading statements
89QC.Penal tax and tax offences
89QD.Right of Commissioner to undertake audit
PART X – ANTI-AVOIDANCE
90. Transactions between associates

91. Re-characterisation of income and deductions
PART XI – PROCEDURE RELATING TO INCOME TAX
Returns
92. Furnishing of return of income

93. Cases where return of income not required
94. Extension of time to furnish a return of income
Assessments
95. Assessments
96. Self-assessment
97. Additional assessments
98. General provisions in relation to assessments
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Objections and Appeals
99. Objection to assessment

100. Appeal to the High Court or a tax tribunal
101. Appeal to the Court of Appeal
102. Burden of proof
Collection and Recovery of Tax
103. Due date for payment of tax

104. Tax as a debt due to the Government of Uganda
105. Collection of tax from persons leaving Uganda permanently
106. Recovery of tax from persons owing money to the taxpayer
107. Collection of tax by distraint
108. Recovery from agent of non-resident
109. Duties of receivers
110. Security on property for unpaid tax
Provisional Tax
111. Payment of provisional tax

112. Estimated tax payable
Refund of Tax
113. Refunds
PART XII – PROCEDURE RELATING TO RENTAL TAX
114. Rental tax
PART XIII – WITHHOLDING OF TAX AT THE SOURCE
115. Interpretation of Part XIII

116. Withholding of tax by employers
117. Payment of interest to resident persons
118. Payment of dividends to resident shareholders
118A. Withholding tax from professional fees
118B. Withholding of tax by the purchaser of an asset
118C. Payments for winnings of sports betting and pool betting
118D. Withholding Tax on Payments of Re-Insurance Premiums
119. Payment for goods and services
120. International payments
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121. Non-resident services contract

122. Withholding as a final tax
123. Payment of tax withheld
123A. Advance tax for transport services
124. Failure to withhold tax
125. Tax credit certificates
126. Record of payments and tax withheld
127. Priority of tax withheld
128. Adjustment on assessment and withholding agent’s indemnity
PART XIV – RECORDS AND INFORMATION COLLECTION
129. Accounts and records

130. Business information returns
131. Access to books, records and computers
132. Notice to obtain information or evidence
133. Books and records not in the English language
Tax Clearance Certificate
134. Tax clearance certificate
Tax Identification Number
135. Tax identification number
PART XV – OFFENCES AND PENALTIES
Interest
136. Interest on unpaid tax
Offences and Penalties
137. Failure to furnish a return

138. Failure to comply with recovery provision
139. Failure to maintain proper records
140. Failure to comply with sections 121, 129, 130, 131, 132 and 133
141. Improper use of tax identification number
142. Making false or misleading statements
143. Obstructing an officer of the Authority
144. Aiding and abetting
145. Offences by and relating to officers
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146. Offences by companies

147. Officer may appear on behalf of the Commissioner
148. Compounding offences
149. Place of trial
150. Tax charged to be paid notwithstanding prosecution
Penal Tax
151. Penal tax for failure to furnish a return of income

152. Penal tax in relation to records
153. Penal tax in relation to false or misleading statements
154. Penal tax for understating provisional tax estimates
155. Recovery of penal tax
PART XVI – ADMINISTRATION
156. Delegation
157. Official secrecy
Forms and Notices
158. Forms and notices; authentication of documents

158A. Use of information technology
158B. Cancellation of registration
158C. Offences
159. Service of notices and other documents
Rulings
160. Practice notes

161. Private rulings
Remission of Tax
162. Remission of tax
PART XVII – MISCELLANEOUS
163. Interpretation of Part XVII

164. Regulations
165. Amendment of monetary amounts and Schedules
166. Transitional
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SCHEDULES
First Schedule Listed institutions

Second Schedule Small business taxpayers tax rates
Third Schedule Rates of tax
Fourth Schedule Chargeable income arising from insurance business
Fifth Schedule Valuation of benefits
Sixth Schedule Depreciation rates and vehicle depreciation ceiling
Seventh Schedule Currency point
========================
SUBSIDIARY LEGISLATION
1. Withholding Tax Regulations, 2000

2. Approved Industrial Buildings Regulations, 2003
3. Tax Incentives for Exporters of Finished Goods Regulations, 2009
4. Transfer Pricing Regulations, 2011
5. Designation of Payers Notice, 2013
=========================
PRACTICE NOTES
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1. Application of the Act
This Act applies to years of income commencing on or after 1st July, 1997.
2. Interpretation
In this Act, unless the context otherwise requires –
(a) “amateur sporting association” means an association whose sole or

main object is to foster or control any athletic sport or game and
whose members consist only of amateur sports persons or affiliated
associations, the members of which consist only of amateur sports
persons;
(b) “approved” means approved by the Minister under regulations made

under Section 164;
(c) “assessed loss” has the meaning in Section 38;
(d) “assessment” means –
(i) the ascertainment of the chargeable income of, and the amount
of tax payable on it, by a taxpayer for a year of income under
this Act, including a deemed assessment under Section 96;
(ii) the ascertainment of the rental income of, and the amount of
tax payable on it by an individual for a year of income under
this Act;
(iii) the ascertainment of the amount of penal tax payable by a

person under this Act; or
(iv) any decision of the Commissioner which, under this Act, is

subject to objection and appeal;
(e) “associate” has the meaning in Section 3;
(f) “building society” means a building society registered under the

Building Societies Act;
(g) “business” includes any trade, profession, vocation or adventure in the

nature of trade, but does not include employment;
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(h) “business asset” means an asset which is used or held ready for use in
a business, and includes any asset held for sale in a business and any
asset of a partnership or company;
(i) “business debt” means –
(i) in the case of a debtor –
(A) a debt obligation, the proceeds of which are used to

acquire a business asset or to incur an expense of a
business;
(B) a debt obligation arising, as a result of being given time to

pay, on the acquisition of a business asset or the incurring
of an expense of a business; or
(C) any debt obligation of a partnership or company; or
(ii) in the case of a creditor, any debt obligation owed to the

creditor that was entered into or arose in the course of the
creditor’s business;
(j) “business income” has the meaning in Section 18;
(k) “chargeable income” has the meaning in Section 15;
(l) “chargeable trust income” has the meaning in Section 70;
(la) “Collective Investment Scheme” has the meaning assigned to it by

Inserted by section 3 of the Collective Investment Schemes Act.
IT (Am) Act 2005
(m) “Commissioner” means the Commissioner General appointed under

the Uganda Revenue Authority Act;
(n) “company” means a body of persons corporate or unincorporated,

whether created or recognised under the law in force in Uganda or
elsewhere, and a unit trust, but does not include any other trust or a
partnership;
(o) “cost base”, in relation to an asset, has the meaning in Section 52;
(p) “court” means a court of competent jurisdiction;
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(q) “currency point” represents the amount in Uganda Shillings

prescribed in the Seventh Schedule to this Act;
(r) “debenture” includes any debenture stock, mortgage, mortgage stock,

loan, loan stock or any similar instrument acknowledging
indebtedness, whether secured or unsecured;
(s) “debt obligation” means an obligation to make a repayment of money

to another person, including accounts payable and the obligations
arising under promissory notes, bills of exchange and bonds;
(t) “dependant”, in relation to a member of a retirement fund, means a

spouse of the member, any child, including an adopted child of the
member who is under the age of eighteen years, or any other relative
of the member who the Commissioner is satisfied relies on the
member for support;
(u) “depreciable asset” means any plant or machinery, or any implement,

utensil or similar article, which is wholly or partly used, or held ready
for use, by a person in the production of income included in gross
income and which is likely to lose value because of wear and tear, or
obsolescence;
(v) “disposal” has the meaning in Section 51;
(w) “dividend” includes –
(i) where a company issues debentures or redeemable preference

shares to a shareholder –
(A) in respect of which the shareholder gave no

consideration, an amount equal to the greater of the
nominal or redeemable value of the debentures or
shares; or
(B) in respect of which the shareholder gave consideration

which is less than the greater of the nominal or
redeemable value, an amount equal to the excess;
(ii) any distribution upon redemption or cancellation of a share, or

made in the course of liquidation, in excess of the nominal
value of the share redeemed, cancelled, or subject to
liquidation;
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(iii) in the case of a partial return of capital, any payment made in

excess of the amount by which the nominal value of the shares
was reduced;
(iv) in the case of a reconstruction of a company, any payment

made in respect of the shares in the company in excess of the
nominal value of the shares before the reconstruction; or
(v) the amount of any loan, the amount of any payment for an
asset or services, the value of any asset or services provided, or
the amount of any debt obligation released, by a company to,
or in favour of, a shareholder of the company or an associate of
a shareholder to the extent to which the transaction is, in
substance, a distribution of profits, but does not include a
distribution made by a building society;
Inserted by
(vi) the issue of bonus shares to shareholders. However, bonus
IT (Am) Act 2013 shares shall only be taxable upon disposal.
(x) “employee” means an individual engaged in employment;
(y) “employer” means a person who employs or remunerates an

employee;
(z) “employment” means –
(i) the position of an individual in the employment of another

person;
(ii) a directorship of a company;
(iii) a position entitling the holder to a fixed or ascertainable

remuneration; or
(iv) the holding or acting in any public office;
(aa) “employment income” has the meaning in Section 19;
(bb) “exempt organisation” means any company, institution, or irrevocable

trust –
(i) which is –
(A) an amateur sporting association;
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(B) a religious, charitable or educational institution of a

public character; or
(C) a trade union, employees’ association, an association of

employers registered under any law of Uganda or an
association established for the purpose of promoting
farming, mining, tourism, manufacturing, or commerce
and industry in Uganda;
Inserted by (D) a body established by law for the purpose of regulating

IT (Am 2) Act 2017
the conduct of professionals; and
(ii) which has been issued with a written ruling by the

Commissioner currently in force stating that it is an exempt
organisation; and
(iii) none of the income or assets of which confers, or may confer, a

private benefit on any person;
Inserted by (iv) or the National Medical Stores

IT (Am) Act 2015
(cc) “farming” means pastoral, agricultural, plantation, horticultural or

other similar operations;
(dd) “financial institution” means any person carrying on the business of

receiving funds from the public or from members through the
acceptance of money deposits repayable upon demand, after a fixed
period, or after notice, or any similar operation through the sale or
placement of bonds, certificates, notes or other securities, and the use
of such funds either in whole or part for loans, investments or any
other operation authorised either by law or by customary banking
practices, for the account and at the risk of the person doing such
business;
(ee) “foreign-source income” means any income which is not derived from
sources in Uganda;
(ff) “gross income” has the meaning in Section 17;
(gg) “gross turnover”, in relation to a resident taxpayer for a year of

income, means –
(i) the amount shown in the recognised accounts of the taxpayer as

the gross proceeds derived in carrying on a business or businesses
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during the year of income, including the gross proceeds arising

from the disposal of trading stock, without deduction for
expenditures or losses incurred in deriving that amount; and
(ii) the amount, if any, shown in the recognised accounts of the

taxpayer as the amount by which the sum of the gains derived by
the taxpayer during the year of income from the disposal of
business assets, other than trading stock, exceeds the losses
incurred by the taxpayer during the year in respect of the disposal
of such assets;
(hh) “incapacitated person” means a resident individual adjudged under a

law in Uganda to be in a state of unsoundness of mind;
(ii) “incapacitated person’s trust” means a trust established for the benefit
of an incapacitated person;
(jj) “industrial building” means any building which is wholly or partly

used, or held ready for use, by a person in –
(i) manufacturing operations;
(ii) research and development into improved or new methods of

manufacture;
(iii) mining operations;
(iv) an approved hotel business;
(v) an approved hospital; or

Inserted by
Finance Act 2001 (vi) approved commercial buildings.
(kk) “interest” includes –
(i) any payment, including a discount or premium, made under a

debt obligation which is not a return of capital;
(ii) any swap or other payments functionally equivalent to interest;
(iii) any commitment, guarantee, or service fee paid in respect of a

debt obligation or swap agreement; or
(iv) a distribution by a building society;
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(ll) “life insurance business” has the meaning in Section 16 (3);
(mm) “listed institution” means an institution listed in the First Schedule to

this Act;
(nn) “local authority” means any public body established under a law of
Uganda and having control over the expenditure of revenue derived
from rates or taxes imposed by law upon the residents of the areas for
which that body is established;
(oo) “local council” has the same meaning as in the Local Governments
Act;
(pp) “manufacturing” means the substantial transformation of tangible

movable property, including power generation and water supply;
(qq) “mineral” has the same meaning as in the Mining Act;
(rr) “mining operations” includes every method or process by which any

mineral is won from the soil or from any substance or constituent of
the soil;
(ss) “Minister” means the Minister responsible for finance;
(tt) “natural resource payment” means –
(i) a payment, including a premium or like payment, made as

consideration for the right to take minerals or a living or non-
living resource from the land; or
(ii) a payment calculated in whole or in part by reference to the

quantity or value of minerals or a living or non-living resource
taken from the land;
(uu) “nominal value”, in relation to a share or debenture, means the paid-

up amount of the share or face value of the debenture, including any
premium paid in respect of the share or debenture;
(vv) “non-resident person” has the meaning in Section 14;
(ww) “partnership” means an association of persons carrying on business

for joint profit;
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(xx) “payment” includes any amount paid or payable in cash or kind, and
any other means of conferring value or benefit on a person;
(yy) “person” includes an individual, a partnership, a trust, a company, a

retirement fund, a government, a political subdivision of a government
and a listed institution;
(yya) “petroleum agreement” means an agreement for the grant of a licence

Inserted by
for petroleum exploration, development and production between the
IT (Am) Act 2 2008 Government and a contractor;
(zz) “property income” has the meaning in Section 20;
(aaa) “provisional taxpayer” means a person liable for provisional tax under
Section 111;
(bbb) “relative”, in relation to an individual, means –
(i) an ancestor, a descendant of any of the grandparents, or an

adopted child, of the individual, or of a spouse of the
individual; or
(ii) a spouse of the individual or of any person specified in

subparagraph (i) of this paragraph;
(ccc) “rent” means any payment, including a premium or like amount,

made as consideration for use or occupation of, or the right to use or
occupy, land or buildings;
(ddd) “rental income”, in relation to [an individual] a person for a year of

income, means the total amount of rent derived by the [individual]
Substituted by
IT (Am) Act, 2014 person for the year of income from the lease of immovable property in
Uganda [by the individual] with the deduction of any expenditures
and losses incurred [by the individual] in respect of the property;
(eee) “resident company” has the meaning in Section 10;
(fff) “resident individual” has the meaning in Section 9;
(ggg) “resident partnership” has the meaning in Section 12;
(hhh) “resident person” means a resident individual, resident company,

resident partnership, resident trust, resident retirement fund, the
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Government of Uganda or a political subdivision of the Government

of Uganda;
(iii) “resident retirement fund” has the meaning in Section 13;
(jjj) “resident taxpayer” means a taxpayer who is a resident person;
(kkk) “resident trust” has the meaning in Section 11;
(lll) “retirement fund” means a pension or provident fund established as a

permanent fund maintained solely for either or both of the following
purposes:–
(i) the provision of benefits for members of the fund in the event
of retirement; or
(ii) the provision of benefits for dependants of members in the

event of the death of the member;
(mmm) “royalty” means –
(i) any payment, including a premium or like amount, made as

consideration for –
(A) the use of, or the right to use, any patent, design,
trademark, or copyright, or any model, pattern, plan,
formula, or process, or any property or right of a similar
nature;
(B) the use of, or right to use –
(I) any motion picture film;
(II) any video or audio material, whether stored on

film, tape, disc, or other medium, for use in
connection with television or radio broadcasting;
or
(III) any sound recording or advertising matter

connected with material referred to in sub-
paragraph (i)(B)(I) or (II) of this paragraph;
(C) the use of, or the right to use, or the receipt of, or right
to receive, any video or audio material transmitted by
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satellite, cable, optic fibre or similar technology for use

Inserted by
IT (Am) Act 2011 in connection with television, internet or radio
broadcasting;
(D) the imparting of, or undertaking to impart, any

scientific, technical, industrial or commercial
knowledge or information;
(E) the use of, or the right to use, any tangible movable
property;
(F) the rendering of, or the undertaking to render,

assistance ancillary to a matter referred to in
subparagraph (i)(A) to (E) of this paragraph; or
(G) a total or partial forbearance with respect to a matter

referred to in subparagraphs (i)(A) to (F); or
(ii) any gain on the disposal of any right or property referred to in

subparagraph (i) of this paragraph;
(nnn) “substituted year of income” has the meaning in Section 39;
(ooo) “swap agreement” means an arrangement between a person who has

incurred a debt obligation with a floating interest rate and a person
who has incurred a debt obligation with a fixed interest rate under
which the persons agree to exchange their interest obligations;
(ppp) “swap payment” means a payment made under a swap agreement;
(qqq) “tax” means any tax imposed under this Act;
(rrr) “tax-exempt employer” means an employer whose income is exempt

from tax;
(sss) “taxpayer” means any person who derives an amount subject to tax
under this Act and includes –
(i) any person who incurs an assessed loss for a year of income; or
(ii) for the purposes of any provision relating to a return, any

person required by this Act to furnish such a return;
- 19 -
(ttt) “trading stock” includes anything produced, manufactured,

purchased, or otherwise acquired for manufacture, sale, or exchange,
as well as consumable stores;
(uuu) “transitional year of income” has the meaning in Section 39;
(vvv) “trust” means any arrangement affecting property in relation to

which there is a trustee;
(www)“trustee” includes –
(i) any person appointed or constituted as such by act of the

parties, by will, by order or declaration of any court, or by
operation of the law;
(ii) an executor, administrator, tutor, or curator;
(iii) a liquidator or judicial manager;
(iv) any person having the administration or control of property

subject to a trust;
(v) any person acting in a fiduciary capacity;
(vi) any person having, either in a private or official capacity, the

possession, direction, control or management of any property
of a person under a legal disability;
(vii) any person who manages assets under a private foundation or

other similar arrangement;
(xxx) “underlying ownership”, in relation to a person other than an

individual, means an interest held in, or over, the person directly or
indirectly through interposed companies, partnerships, or trusts by an
individual or by a person not ultimately owned by individuals;
(yyy) “unit trust” means a unit trust registered or required to be registered as

Parliament may by law prescribe; and
(zzz) “year of income” means the period of twelve months ending on 30th
June, and includes a substituted year of income and a transitional year
of income.
- 20 -
3. Associate
(1) For the purposes of this Act, where any person, not being an employee,
acts in accordance with the directions, requests, suggestions, or wishes
of another person whether or not they are in a business relationship and
whether those directions, requests, suggestions, or wishes are
communicated to the first-mentioned person, both persons are treated
as associates of each other.
(2) Without limiting the generality of subsection (1), the following are
treated as an associate of a person –
(a) a relative of the person, unless the Commissioner is satisfied that

neither person acts in accordance with the directions, requests,
suggestions, or wishes of the other person;
(b) a partner of the person, unless the Commissioner is satisfied that

suggestions, or wishes of the other person;
(c) a partnership in which the person is a partner where the person,

either alone or together with an associate or associates under
another application of this Section, controls fifty per cent or more
of the rights to income or capital of the partnership;
(d) the trustee of a trust under which the person, or an associate under
another application of this Section, benefits or may benefit;
(e) a company in which the person, either alone or together with an

associate or associates under another application of this Section,
controls fifty per cent or more of the voting power in the company
either directly or through one or more interposed companies,
partnerships, or trusts;
(f) where the person is a partnership, a partner in the partnership who,

another application of this Section, controls fifty per cent or more
of the rights to income or capital of the partnership;
(g) where the person is the trustee of a trust, any other person who
benefits or may benefit under the trust; or
(h) where the person is a company –
- 21 -
(i) a person who, either alone or together with an associate or

associates under another application of this Section, controls
fifty per cent or more of the voting power in the company,
partnerships, or trusts; or
(ii) another company in which the person referred to in

subparagraph (i) of this paragraph, either alone or together
with an associate or associates under another application of
this Section, controls fifty per cent or more of the voting
power in that other company, either directly or through one or
more interposed companies, partnerships, or trusts.
PART II – IMPOSITION OF TAX
4. Income Tax imposed
(1) Subject to, and in accordance with this Act, a tax to be known as
income tax shall be charged for each year of income and is imposed on
every person who has chargeable income for the year of income.
(2) Subject to subsections (4) and (5), the income tax payable by a taxpayer
for a year of income is calculated by applying the relevant rates of tax
determined under this Act to the chargeable income of the taxpayer for
the year of income and from the resulting amount are subtracted any
tax credits allowed to the taxpayer for the year of income.
(3) Where a taxpayer is allowed more than one tax credit for a year of
income, the credits shall be applied in the following order-
(a) the foreign tax credit allowed under Section 81; then
(b) the tax credit allowed under Section 128; then
(c) the tax credit allowed under Section 111(8).
(4) Subject to subsection (6a), where the gross income of a taxpayer for a year
Inserted by
of income consists exclusively of employment income derived from a
IT (Am) Act 2011 single employer from which tax has been withheld as required under
Section 116, the income tax payable by the taxpayer for the year of
income is the amount equal to the sum of the amounts required to be
withheld from such income under Section 116.
- 22 -
(5) Subject to subsection (7), where the gross turnover of a resident

Substituted by
taxpayer for a year of income derived from carrying on a business or
IT (Am) Act 2015 businesses is less than one hundred and fifty million shillings, [fifty million
shillings] the income tax payable by the taxpayer for the year of income
shall be determined in accordance with the Second Schedule to this Act,
unless the taxpayer elects by notice in writing to the Commissioner for
subsection (2) to apply; and
(a) the tax shall be a final tax on the business income of the taxpayer;
(b) no deductions shall be allowed under this Act for expenditures or

losses incurred in the production of the business income; and
(c) no tax credits allowed under this Act shall be used to reduce the
tax payable on the business income of the taxpayer, except as
provided in the Second Schedule to this Act.
(6) An election under subsection (5) must be lodged with the

Commissioner by the due date for the taxpayer’s return for the year of
income to which it relates.
(6a) Section 4(4) shall not apply to a taxpayer for a tax year if the
Inserted by employment income of that taxpayer for that year includes an amount
IT (Am) Act 2011
under section 19(1)(h).
(7) Subsection (5) does not apply to a resident taxpayer who is in the
business of providing medical, dental, architectural, engineering,
accounting, legal, or other professional services, public entertainment
services, public utility services, or construction services.
Section 5 Substituted By
5. Rental Tax imposed IT (Am) Act 2014
(1) Subject to, and in accordance with this Act, a tax shall be charged for
each year of income and is imposed on every [individual] person who
has rental income for the year of income.
(2) The tax payable by [an individual] any person under this Section for a
year of income is – [calculated by applying the relevant rates of tax
determined under Section 6(2) to the rental income derived by the
individual for the year.]
(a) where the person is an individual, calculated by applying the

relevant rates of tax determined under section 6(2) to the rental
income derived by the individual for the year;
- 23 -
(b) where the person is a company, calculated by applying the relevant

rates of tax determined under section 7(2) to the rental income
derived by the company for the year;
(c) where the person is a trustee of a trust or a retirement fund,

calculated by applying the relevant rates of tax determined under
section 8(5) to the rental income derived by the trustee or
retirement fund for the year;
(d) where the person is a partnership, calculated by applying the

relevant rates of tax on the individual partners under section 6(2)
to the rental income derived by the partnership for the year.
(3) The tax imposed under this Section on an person individual is separate
from the tax imposed under Section 4 and –
(a) the [rental income of the individual] rent derived by an individual

Substituted by shall not be included in the gross income subject to tax under this Act
IT (Am) Act 2002
of the individual for any year of income;
(b) expenditures and losses incurred by the individual in the

Substituted by production of rent [rental income] shall be allowed as a deduction
IT (Am) Act 2002
under this Act for any year of income only as provided in Section
22(1)(c); and
(c) the tax payable by a resident individual under this Section shall not
Repealed by
IT (Am) Act 1 2008
be reduced by any tax credits allowed to the individual under this
Act. Substitution by IT (Am) Act 2014
(3) The tax imposed under this section on any person is separate from the
tax imposed under section 4 and –
(a) the rent derived by a person shall not be included in the gross
income of the person which is subject to tax under this Act for any
year of income;
(b) expenditures and losses incurred by the individual in the

production of the rent shall be allowed as a deduction under this
Act for any year of income only as provided for in section 22(1)(c);
(c) expenditures and losses incurred by a person, other than an

individual, in the production of rent shall be allowed as a
deduction under this Act for any year of income; and
- 24 -
(d) expenditures and losses incurred by a partnership in the production

of rent shall be allowed as a deduction under this Act for any year
of income only as provided for in section 22(1)(c).
(4) In this Section, “year of income” means the period of twelve months
ending on 30th June. Substituted by IT (Am) Act 2014
(4) For the purposes of assessing rental tax under this section, the Minister
shall, by statutory instrument, prescribe estimates of rent based on the
4 - 7 Inserted by
IT (Am 2) Act 2017
rating of the rental property in a specific location.
(5) A Statutory Instrument made under subsection(4) shall only apply to a

person who fails to file a return in accordance with subsection (1) or
whose return is misleading on the face of it and has been contested by
the Commissioner.
(6) A Statutory Instrument made under this section shall come into force
after approval by Parliament.
(7) Notwithstanding the provisions of this section, all rental agreements

shall be executed and effected in Uganda Shillings.
Rates of Tax
6. Rates of Tax for Individuals
(1) The chargeable income of an individual for a year of income is charged

to income tax at the rates prescribed in Part I of the Third Schedule to
this Act.
(2) The rental income of a resident individual for a year of income is

charged to rental tax at the rate prescribed in Part VI of the Third
Schedule.
7. Rate of Income Tax for Companies
(1) The chargeable income of a company for a year of income, is charged

to income tax at the rate prescribed in Part II of the Third Schedule to
this Act.
(2) The rental income of a company for a year of income is charged to

Inserted by income tax at the rate prescribed in Part II of the Third Schedule to this
IT (Am) Act 2014
Act.
- 25 -
8. Rate of Income Tax for Trustees and Retirement Funds
(1) Subject to subsections (2) and (3), a trustee of a trust is charged to tax at
the rate prescribed in Part III of the Third Schedule to this Act on the
chargeable trust income of the trust for a year of income.
(2) A trustee of a trust being the estate of a deceased taxpayer who, at the
date of death, was a resident individual, is charged to tax on the
chargeable trust income of the trust at the rates prescribed in Part I of
the Third Schedule to this Act for –
(a) the year of income in which death occurred; and
(b) the following year of income.
(3) A trustee of an incapacitated person’s trust is charged to tax at the rates

prescribed in Part I of the Third Schedule to this Act on the chargeable
trust income of the trust for a year of income.
(4) The chargeable income of a retirement fund for a year of income is

charged to tax at the rate prescribed in Part III of the Third Schedule to
this Act.
(5) Subject to subsections (6) and (7), the rental income of a trustee for a
5 – 8 inserted by year of income is charged to tax at the rate prescribed in Part III of the
IT (Am) Act 2014
Third Schedule.
(6) A trustee of a trust being the estate of a deceased taxpayer who, at the
date of death, was a resident individual, is charged to tax on the rental
income of the trust at the rates prescribed in Part I of the Third
Schedule to this Act for –
(a) the year of income in which death occurred; and
(b) the following year of income.
(7) A trustee of an incapacitated person’s trust is charged to tax on the

rental income of the trust for a year of income at the rates prescribed in
Part I of the Third Schedule to this Act.
(8) The rental income of a retirement fund for a year of income is charged
to tax at the rate prescribed in Part III of the Third Schedule to this Act.
- 26 -
PART III – RESIDENTS AND NON-RESIDENTS
9. Resident Individual
(1) Subject to subsections (2) and (3), an individual is a resident individual

for a year of income if that individual –
(a) has a permanent home in Uganda;
(b) is present in Uganda –
(i) for a period of, or periods amounting in aggregate to, 183

days or more in any twelve-month period that commences or
ends during the year of income; or
(ii) during the year of income and in each of the two preceding
years of income for periods averaging more than 122 days in
each such year of income; or
(c) is an employee or official of the Government of Uganda posted

abroad during the year of income.
(2) An individual who is a resident individual under subsection (1) for a

year of income, in this Section referred to as the “current year of
income”, but who was not a resident individual for the preceding year
of income is treated as a resident individual in the current year of
income only for the period commencing on the day on which the
individual was first present in Uganda.
(3) An individual who is a resident individual for the current year of

income but who is not a resident individual for the following year of
income is treated as a resident individual in the current year of income
only for the period ending on the last day on which the individual was
present in Uganda.
10. Resident Company
A company is a resident company for a year of income if it –
(a) is incorporated or formed under the laws of Uganda;
(b) has its management and control exercised in Uganda at any time during
the year of income; or
- 27 -
(c) undertakes the majority of its operations in Uganda during the year of
income.
11. Resident Trust
A trust is a resident trust for a year of income if –
(a) the trust was established in Uganda;
(b) at any time during the year of income, a trustee of the trust was a
resident person; or
(c) the trust has its management and control exercised in Uganda at any
time during the year of income.
12. Resident Partnership
A partnership is a resident partnership for a year of income if, at any time

during that year, a partner in the partnership was a resident person.
13. Resident Retirement Fund
A retirement fund is a resident retirement fund for a year of income if it –
(a) is organised under the laws of Uganda;
(b) is operated for the principal purpose of providing retirement benefits to

resident individuals; or
(c) has its management and control exercised in Uganda at any time during
the year of income.
14. Non-Resident Person
(1) Subject to subsection (2), a person is a non-resident person for a year of

income if the person is not a resident person for that year.
(2) Where Section 9(2) or (3) applies, an individual is a non-resident person

for that part of the year of income in which the individual is not a
resident individual.
- 28 -
PART IV – CHARGEABLE INCOME
15. Chargeable Income
Subject to Section 16, the chargeable income of a person for a year of income
is the gross income of the person for the year less total deductions allowed
under this Act for the year.
16. Chargeable Income arising from Insurance Business
(1) The chargeable income of a person for a year of income arising from the
carrying on of a short-term insurance business is determined in
accordance with the Fourth Schedule to this Act.
(2) Where a person to whom subsection (1) applies derives income charged
to tax other than income arising from the carrying on of a short-term
insurance business for a year of income, the chargeable income
determined under subsection (1) is added to that other income for the
purposes of determining the person’s total chargeable income for the
year of income.
(3) In this Section,
(a) “insurance business” means the business of, or in relation to the

issue of, or the undertaking of liability under, life policies, or to
make good or indemnify the insured against any loss or damage,
including liability to pay damages or compensation contingent
upon the happening of a specified event;
(b) “life insurance business” means business of any of the following

classes –
(i) effecting, carrying out, and issuing policies on human life or

contracts to pay annuities on human life;
(ii) effecting, carrying out, and issuing contracts of insurance

against the risk of the person insured sustaining injury or
dying as the result of an accident or an accident of a specific
class, or becoming incapacitated in consequence of disease or
of diseases of specified classes, being contracts that are
expressed to be in effect for a period of not less than five years
or without limit of time and either are not expressed to be
terminable by the insurer before the expiry of five years from
taking effect or are expressed to be so terminable before the
- 29 -
expiry of such period only in special circumstances specified

in the contract; or
(iii) effecting, carrying out, and issuing of insurance whether

effected by the issue of policies, bonds, endowment
certificates, or otherwise, whereby, in return for one or more
premiums paid to the insurer, an amount or series of amounts
is to become payable to the insurer in the future, not being
such contracts as fall within subparagraph (i) or (ii) of this
paragraph; and
(c) “short-term insurance business” means any insurance business

which is not a life insurance business.
Gross Income
17. Gross Income
(1) Subject to this Act, the gross income of a person for a year of income is
the total amount of –
(a) business income;
(b) employment income; and
(c) property income,
derived during the year by a person, other than income exempt from
tax.
(2) For the purposes of subsection (1) –
(a) the gross income of a resident person includes income derived

from all geographical sources; and
(b) the gross income of a non-resident person includes only income

derived from sources in Uganda.
(3) Unless this Act provides otherwise, Part V of this Act, which deals with
tax accounting principles, applies in determining when an amount is
derived for the purposes of this Act.
- 30 -
18. Business Income
(1) Business income means any income derived by a person in carrying on

a business and includes the following amounts, whether of a revenue or
capital nature –
(a) the amount of any gain, as determined under Part VI of this Act
which deals with gains and losses on disposal of assets, derived by
a person on the disposal of a business asset, or on the satisfaction
or cancellation of a business debt, whether or not the asset or debt
was on revenue or capital account;
(b) any amount derived by a person as consideration for accepting a

restriction on the person’s capacity to carry on business;
(c) the gross proceeds derived by a person from the disposal of trading
stock;
(d) any amount included in the business income of the person under
any other Section of this Act;
(e) the value of any gifts derived by a person in the course of, or by
virtue of, a past, present, or prospective business relationship;
(f) interest derived by a person in respect of trade receivables or by a

person engaged in the business of banking or money lending; and
Repealed by
(g) rent derived by a person whose business is wholly or mainly the
IT (Am) Act 2014 holding or letting of property.
(2) An amount included in business income under subsection (1)(f) or (g)

retains its character as interest or rent for the purposes of any Section of
this Act referring to such income.
(3) Where, as a result of any concession granted by, or a compromise

made with, a taxpayer’s creditors in the course of an insolvency, the
taxpayer derives a gain on the cancellation of a business debt, Section
38(3) applies in lieu of including the gain in the business income of the
taxpayer under subsection (1).
(4) In this Section, “business asset” does not include trading stock or a
depreciable asset.
- 31 -
19. Employment Income
(1) Subject to this Section, employment income means any income derived
by an employee from any employment and includes the following
amounts, whether of a revenue or capital nature –
(a) any wages, salary, leave pay, payment in lieu of leave, overtime
pay, fees, commission, gratuity, bonus, or the amount of any
travelling, entertainment, utilities, cost of living, housing, medical,
or other allowance;
(b) the value of any benefit granted;
(c) the amount of any discharge or reimbursement by an employer of

expenditure incurred by an employee, other than expenditure
incurred by an employee on behalf of the employer which serves
the proper business purposes of the employer;
(d) any amount derived as compensation for the termination of any

contract of employment, whether or not provision is made in the
contract for the payment of such compensation, or any amount
derived which is in commutation of amounts due under any
contract of employment;
(e) any amount paid by a tax-exempt employer as a premium for

insurance on the life of the employee and which insurance is for
the benefit of the employee or any of his or her dependants;
(f) any amount derived as consideration for the employee’s agreement

to any conditions of employment or to any changes in his or her
conditions of employment;
(g) the amount by which the value of shares issued to an employee

under an employee share acquisition scheme at the date of issue
exceeds the consideration, if any, given by the employee for the
shares including any amount given as consideration for the grant
of a right or option to acquire the shares;
(h) the amount of any gain derived by an employee on disposal of a

right or option to acquire shares under an employee share
acquisition scheme.
(2) Notwithstanding subsection (1), the employment income of an

employee does not include –
- 32 -
(a) the cost incurred by the employer of any passage to and from
Uganda in respect of the employee’s appointment or termination
of employment where the employee –
(i) was recruited or engaged outside Uganda;
(ii) is in Uganda solely for the purpose of serving the employer;

and
(iii) is not a citizen of Uganda; or
(b) any reimbursement or discharge of the employee’s medical

expenses;
(c) except where subsection (1)(e) applies, any amount paid as a

premium for insurance on the life of the employee and which
insurance is for the benefit of the employee or any of his or her
dependants;
(d) any allowance given for, and which does not exceed the cost
actually or likely to be incurred, or a reimbursement or discharge
of expenditure incurred by the employee on –
(i) accommodation and travel expenses; or
(ii) meals and refreshment,
Substituted by while undertaking travel in the course of performing duties of

IT (Am) Act 2009
employment;
(e) the value of any meal or refreshment provided by the employer to

the employee in premises operated by, or on behalf of the
employer solely for the benefit of employees and which is available
to all full-time employees on equal terms;
(f) any benefit granted by the employer to the employee during a

month, where the total value of the benefits provided by the
employer to the employee for the month is less than ten thousand
shillings; or
Substituted by (g) any contribution or similar payment by the employer made to a

IT (Am) Act 2002
retirement fund for the benefit of the employee or any of his or her
dependents.
- 33 -
Inserted by (h) the value of a right or option to acquire shares granted to an

IT (Am) Act 2011
employee under an employee share acquisition scheme.
(3) For the purposes of this Section, the value of any benefit is determined
in accordance with the Fifth Schedule to this Act.
(4) Where the amount to which subsection (1)(d) applies is paid by an

employer to an employee who has been in the employment of the
employer for ten years or more, the amount included in employment
income is calculated according to the following formula –
A x 75%
where, A is the total amount derived by the employee to which

subsection (1)(d) applies.
(5) For the purposes of subsection (2), a director of a company is only a

full-time employee of the company if the director –
(a) is required to devote substantially the whole of his or her time to

the service of the company in a managerial or technical capacity;
and
(b) does not have an interest of more than five per cent in the
underlying ownership of the company.
(6) For the purposes of this Section, an amount or benefit is derived in

respect of employment if it –
(a) is provided by an employer or by a third party under an

arrangement with the employer or an associate of the employer;
(b) is provided to an employee or to an associate of an employee; and
(c) is provided in respect of past, present, or prospective employment.
(7) An amount excluded from the employment income of an employee

under subsection (2) or (4) is exempt income of the employee.
(8) In this Section –
(a) “employee share acquisition scheme” means an agreement or

arrangement under which –
- 34 -
(i) a company is required to issue shares in the company to

employees of the company or of an associated company; or
(ii) a company is required to issue shares to a trustee of a trust

and under the trust deed the trustee is required to transfer the
shares to employees of the company or of an associated
company; and
(b) “medical expenses” includes a premium or other amount paid for

medical insurance.
20. Property Income
(1) Property income means –
(a) any dividends, interest, annuity, natural resource payments, rents,

royalties and any other payment derived by a person from the
provision, use, or exploitation of property;
(b) the value of any gifts derived by a person in connection with the
provision, use, or exploitation of property;
(c) the total amount of any contributions made to a retirement fund

during a year of income by a tax exempt employer; and
(d) any other income derived by a person including winnings derived

Substituted by
IT (Am) Act 2014
from sports betting and pool betting, but does not include any amount
which is business, employment or exempt income.
(2) An amount included in property income under subsection (1)(a) retains

its character as dividends, interest, annuity, natural resource payment,
rent, or royalties for the purposes of any Section of the Act referring to
such income.
Exempt Income
21. Exempt Income
(1) The following amounts are exempt from tax –
(a) the income of a listed institution;
- 35 -
(b) the income of any organisation or person entitled to privileges

under the Diplomatic Privileges Act to the extent provided in the
regulations and orders made under that Act;
(c) the official employment income derived by a person in the public

service of the government of a foreign country if –
(i) the person is either a non-resident person or is a resident

individual solely by reason of performing such service;
(ii) the income is payable from the public funds of that country;
and
(iii) the income is subject to tax in that country;
(d) any allowance payable outside Uganda to a person working in a

Ugandan foreign mission;
(e) the income of any local authority;
(f) the income of an exempt organisation, other than –
(i) property income, except rent received by an exempt

Substituted by
organisation in respect of immovable property [which is used
IT (Am) Act 2005 by the lessee] and the rent is used by the lessor exclusively for the
activities of the organisation specified in paragraph (bb)(i) of
the definition of “exempt organisation” in Section 2; or
(ii) business income that is not related to the function constituting

the basis for the organisation’s existence;
(g) any education grant which the Commissioner is satisfied has been
made bona fide to enable or assist the recipient to study at a
recognised educational or research institution;
(h) any amount derived by way of alimony or allowance under any

judicial order or written agreement of separation;
Repealed by
IT (Am) Act 2002
(i) interest payable on Treasury Bills or Bank of Uganda Bills;
(j) the value of any property acquired by gift, bequest, devise, or

inheritance that is not included in business, employment, or
property income;
- 36 -
Substituted by (k) any capital gain that is not included in business income, other than
IT (Am) Act 2010
& IT (Am) Act 2014
capital gains on the sale of shares in a private limited liability company or
on the sale of a commercial building;
(l) employment income derived by an individual to the extent

provided for in a technical assistance agreement where –
(i) the individual is a non-resident or a resident solely for the

purpose of performing duties under the agreement; and
(ii) the Minister has concurred in writing with the tax provisions
in the agreement;
(m) foreign-source income derived by –
(i) a short-term resident of Uganda;
(ii) a person to whom paragraph (c) or (l) of this subsection

applies; or
(iii) a member of the immediate family of a person referred to in

subparagraph (i) or (ii) of this paragraph;
(n) a pension;
(o) a lump sum payment made by a resident retirement fund to a

member of the fund or a dependant of a member of the fund;
(p) the proceeds of a life insurance policy paid by a person carrying on

a life insurance business;
(q) the official employment income of a person employed in the

Inserted by
IT (Am) Act 2013
Uganda Peoples’ Defence Forces, the Uganda Police Force, the
External Security Organisation, the Internal Security Organisation or the
Uganda Prisons Service, other than a person employed in a civil
capacity;
Inserted by
IT (Am) Act 2016
(qa) the employment income of a person employed as a Member of
Parliament, except salary;
Added by (r) the income of the Government of the Republic of Uganda and the
IT (Am) Act 2002
Government of any other country;
Inserted by
IT (Am) Act 2003 (s) the income of the Bank of Uganda;
W.E.F 7/07
- 37 -
[t,u,v] Inserted by (t) income of a collective investment scheme to the extent of which
IT (Am) Act 2005
the income is distributed to participants in the collective
investment scheme;
Repealed by (u) interest earned by a financial institution on a loan granted to any

IT (Am) Act 2014 person for the purpose of farming, forestry, fish farming, bee
keeping, animal and poultry husbandry or similar operations;
Inserted by
IT (Am) Act 2006 (v) emoluments payable to employees of the East African
and 2008
Development Bank with effect from 1st July 1997;
(w) the income of an Investor Compensation Fund established under

Section 81 of the Capital Markets Act;
Inserted by (x) the income of a person derived from the operation of aircraft in
IT (Am) Act 1 2008
and substituted by domestic and international traffic or the leasing of aircraft; [whose
IT (Am) Act 2 2008
place of effective management is not in Uganda;]
(y) the income of a person derived from the exportation of finished

consumer and capital goods for a period of ten years, where the
person –
(i) in the case of a new investment, applies in writing to the

Inserted by
IT (Am) Act 1 2008
Commissioner to be issued with a certificate of exemption at
the beginning of his or her investment; or
(ii) in the case of an existing investment, applies for a certificate

from the Commissioner which is effective from 1st July 2007,
and the person -
(aa) exports at least 80% of his or her production of goods;
(ab) has fulfilled such conditions as may be prescribed by

Regulations made by the Minister; and
(ac) has been issued with a certificate of exemption

prescribed by the Commissioner.
(z) the income of a person for a year of income derived from agro-
processing where –
Inserted by
IT (Am) Act 2 2008
and substituted by
IT (Am) Act 2009, and
(i) the person or an associate of the person has not previously
by IT (Am) Act 2011. carried on agro-processing of a similar or related agricultural
product in Uganda;
- 38 -
(ii) upon commencement of agro-processing in Uganda, the

person applies in writing to the Commissioner for a certificate
of exemption which the Commissioner may issue within sixty
days of receiving the application;
(iii) the person invests in plant and machinery that has not
previously been used in Uganda by any person in agro-
processing to process agricultural products for final
consumption;
(iv) the person processes agricultural products grown or produced

in Uganda;
(v) the person regularly files returns as required under this Act;
(vi) the person regularly fulfils all obligations under this Act
relating to that person’s investment; and
(vii) the person has been issued with a certificate of exemption for
that year of income by the Commissioner.
Inserted by (za) for avoidance of doubt, a certificate of exemption issued under

IT (Am) Act 2011
subsection (1)(z)(ii) shall be valid for one year and may be
renewed annually.
Inserted by IT (Am)
Act 2 2008 &
substituted by (aa) business income derived by a person from managing or running
IT (Am) Act 2009.
Repealed by an educational institution; or
IT (Am) Act 2014
Inserted by
IT (Am) Act 2 2008
and repealed by (ab) interest earned by a person on deposit auction funds issued by the
IT (Am) Act 2013
Bank of Uganda for the purposes of liquidity management.
Inserted by (ab) an award received by a sports person as a reward for winning or

IT (Am) Act 2013
participating in a sports competition.
(ac) the income of Bujagali Hydro Power Project up to 30th June,

Ac & ad Inserted by
IT (Am 2) Act 2017
2022.
(ad) income of a Savings and Credit Cooperative Society up to 30th

June 2027.
- 39 -
(a) “short-term resident” means a resident individual, other than a

citizen of Uganda, present in Uganda for a period or periods not
exceeding two years; and
(b) “technical assistance agreement” means a grant agreement

between the Government of Uganda and a foreign government or
a listed institution for the provision of technical assistance to
Uganda.
Inserted by
(c) ”agro-processing” in relation to agricultural products of pastoral,
IT (Am) Act 2009 agricultural, or other farming operations, means an industrial or
manufacturing process that substantially transforms or converts
raw agricultural produce in order to convert the produce into a
different chemical or physical states and includes the activities that
take place between slaughter or harvest of the raw product in order
to change it or preserve it.
Deductions
22. Expenses of deriving Income
(1) Subject to this Act, for the purposes of ascertaining the chargeable
income of a person for a year of income, there shall be allowed as a
deduction –
(a) all expenditures and losses incurred by the person during the year
of income to the extent to which the expenditures or losses were
incurred in the production of income included in gross income;
(b) the amount of any loss as determined under Part VI, which deals
with gains and losses on the disposal of assets, incurred by the
person on the disposal of a business asset during the year of
income, whether or not the asset was on revenue or capital
account;
(c) in the case of rental income, twenty per cent of the rental income
as expenditures and losses incurred by the individual in the
production of such income;
Inserted by
IT (Am) Act 2002
and substituted by (d) local service tax [graduated tax] paid by an individual; and
IT (Am) Act 2 2008
Inserted by (e) 2% of income tax payable under this Act by private employers who
IT (Am) Act 2 2008
and substituted by prove to Uganda Revenue Authority that 5% of their employees on
IT (Am) Act 2009
full time basis are persons with disabilities;
- 40 -
(f) Section 17 of the Persons with Disabilities Act is repealed.
(2) Except as otherwise provided in this Act, no deduction is allowed for –
(a) any expenditure or loss incurred by a person to the extent to which

it is of a domestic or private nature;
(b) subject to subsection (1), any expenditure or loss of a capital

nature, or any amount included in the cost base of an asset;
(c) any expenditure or loss which is recoverable under any insurance,

contract, or indemnity;
(d) income tax payable in Uganda or a foreign country;
(e) any income carried to a reserve fund or capitalised in any way;
(f) the cost of a gift made directly or indirectly to an individual where

the gift is not included in the individual’s gross income;
(g) any allowance given to, or a reimbursement or discharge of

Repealed by
expenditure incurred by, an employee, in respect of the employee’s
IT (Am) Act 2002 housing, and any expenditures incurred in respect of housing
provided to an employee;
(h) any fine or similar penalty paid to any government or a political

subdivision of a government for breach of any law or subsidiary
legislation;
(i) a contribution or similar payment made to a retirement fund

Deleted & Substituted
[either for the benefit of the person making the payment or for the
by IT (Am) Act 2005 benefit of any other person] by the employee either for the benefit of the
employee or for the benefit of any other person;
(j) a premium or similar payment made to a person carrying on a life

insurance business on the life of the person making the premium or
on the life of some other person;
(k) the amount of a pension paid to any person; or
(l) any alimony or allowance paid under any judicial order or written
agreement of separation.
- 41 -
(m) any expenditure above five million shillings i n o n e transaction

Inserted by on goods and services from a supplier who does not have a
IT (Am) Act 2015
taxpayer identification number.
(3) In this Section, expenditure of a domestic or private nature incurred by

a person includes –
(a) the cost incurred in the maintenance of the person and the person’s
family or residence;
(b) the cost of commuting between the person’s residence and work;
(c) the cost of clothing worn to work, except clothing which is not
suitable for wearing outside of work; and
(d) the cost of education of the person not directly relevant to the
person’s employment or business, and the cost of education
leading to a degree, whether or not it is directly relevant to the
person’s employment or business.
(4) Unless this Act provides otherwise, Part V, which deals with tax
accounting principles, applies for the purposes of determining when an
expenditure or loss is incurred for the purposes of this Act.
(5) In this Section, “business asset” does not include trading stock or a
depreciable asset.
(6) For the purposes of subsection (1)(a) expenditures and losses incurred
Inserted by by a person during exploration, development or production of
IT (Am) Act 2006
& repealed by
petroleum in a contract area shall be allowed as a deduction only
IT (Am) Act 2 2008 against the income of that area included in gross income.
23. Meals, Refreshment, and Entertainment Expenditure
A deduction is allowed for expenditure incurred by a person in providing

meals, refreshment, or entertainment in the production of income included in
gross income, but only where –
(a) the value of the meals, refreshment, or entertainment is included in the

employment income of an employee under Section 19(1)(b) or is
excluded from employment income by Section 19(2)(d) or (e) ; or
(b) the person’s business includes the provision of meals, refreshment, or

entertainment and the persons to whom the meals, refreshment, or
- 42 -
entertainment have been provided have paid an arm’s length

consideration for them.
24. Bad Debts
(1) Subject to subsection (2), a person, is allowed a deduction for the

amount of a bad debt written off in the person’s accounts during the
year of income;
(2) A deduction for a bad debt is only allowed –
Substituted by (a) if the amount of the debt claim was included in the person’s gross
IT (Am) Act 2002
income in any year of income;
(b) if the amount of the debt claim was in respect of money lent in the
ordinary course of a business carried on by a financial institution in
the production of income included in gross income; or
Inserted by (c) if the amount of the debt claim was in respect of a loan granted to
IT (Am) Act 1 2008
any person by a financial institution for the purpose of farming,
forestry, fish farming, bee keeping, animal and poultry husbandry
or similar operations.
(a) “bad debt” means –
(i) a debt claim in respect of which the person has taken all
reasonable steps to pursue payment and which the person
reasonably believes will not be satisfied; and
(ii) in relation to a financial institution, a debt in respect of which

a loss reserve held against presently identified losses or
potential losses, and which is therefore not available to meet
losses which subsequently materialise, has been made; and
(b) “debt claim” means a right to receive a repayment of money from

another person, including deposits with financial institutions,
accounts receivable, promissory notes, bills of exchange, and
bonds.
- 43 -
25. Interest
(1) Subject to this Act, a person is allowed a deduction for interest incurred
during the year of income in respect of a debt obligation to the extent
that the debt obligation has been incurred by the person in the
production of income included in gross income.
(2) In this Section, “debt obligation” includes an obligation to make a swap

payment arising under a swap agreement and shares in a building
society.
26. Repairs and Minor Capital Equipment
(1) A person is allowed a deduction for expenditure incurred during the

year of income for the repair of property occupied or used by the person
in the production of income included in gross income.
(2) A person is allowed a deduction for expenditure incurred during the

Substituted by year of income in acquiring a depreciable asset with a cost base of less
IT (Am) Act 2005
than [five] fifty currency points.
(3) Subsection (2) only applies to a depreciable asset if the asset normally
functions in its own right and is not an individual item which forms part
of a set.
27. Depreciable Assets
(1) A person is allowed a deduction for the depreciation of the person’s

depreciable assets, other than an asset to which Section 26(2) applies,
during the year of income as calculated in accordance with this Section.
(2) Depreciable assets are classified into four classes as set out in Part I of
the Sixth Schedule to this Act with depreciation rates applicable for
each class as specified in that Part.
(3) A person’s depreciable assets shall be placed into separate pools for
each class of asset, and the depreciation deduction for each pool is
calculated according to the following formula -
AxB
where –
- 44 -
A is the written down value of the pool at the end of the year of
income; and
B is the depreciation rate applicable to the pool.
(4) The written down value of a pool at the end of a year of income is the
total of –
(a) the written down value of the pool at the end of the preceding year
of income after allowing for the deduction under subsection (3) for
that year; and
(b) the cost base of assets added to the pool during the year of income,
reduced, but not below zero, by the consideration received from the
disposal of assets in the pool during the year of income.
(5) Where the amount of consideration received by a person from the

disposal during a year of income of any asset or assets in a pool exceeds
the written-down value of the pool at the end of the year of income
disregarding that amount, the excess is included in the business income
of the person for that year.
(6) If the written down value of a pool at the end of the year of income,
Substituted by after allowing for the deduction under subsection (3), is less than [five]
IT (Am) Act 1 2008
fifty currency points, a deduction shall be allowed for the amount of that
written down value.
(7) Where all the assets in a pool are disposed of before the end of a year of
income, a deduction is allowed for the amount of the written down
value of the pool as at the end of that year.
(8) Where a person has incurred non-deductible expenditures in more than

one year of income in respect of a depreciable asset, this Section applies
as if the expenditures incurred in different years of income were
incurred for the acquisition of separate assets of the same class.
(9) The cost base of a depreciable asset is added to a pool in the year of
income in which the asset is placed in service.
(10) Where a depreciable asset is only partly used during a year of income in
the production of income included in gross income, the depreciation
deduction allowed under this Section in relation to the asset shall be
proportionately reduced.
- 45 -
(11) For the purposes of subsection (4)(b) , the cost base of a road vehicle,
other than a commercial vehicle, is not to exceed the amount set out in
Part II of the Sixth Schedule.
(12) Where the cost base of a road vehicle for the purposes of subsection
(4)(b) is limited under subsection (11), the person is treated as having
acquired two assets –
(a) a depreciable asset being a road vehicle with a cost base equal to
the amount set out in Part II to the Sixth Schedule to this Act; and
(b) a business asset that is not a depreciable asset with a cost base
equal to the difference between the cost base of the asset not taking
into account subsection (11), in this Section referred to as the
“actual cost base”, and the amount set out in Part II of the Sixth
Schedule.
(13) Where a road vehicle to which subsection (12) applies is disposed of,
the person is treated as having disposed of each of the assets specified
under that subsection and the consideration received on disposal is
apportioned between the two assets based on the ratio of the cost base
of each asset as determined under that subsection to the actual cost base
of the asset.
(14) In calculating the amount of any gain or loss arising on disposal of an

asset specified in subsection (12)(b), the cost base of the asset as
determined under that paragraph is reduced by the depreciation
deductions which would have been allowed to the person if the asset –
(a) was a depreciable asset being a road vehicle; and
(b) the asset was the only asset in the pool.
(15) In this Section, “commercial vehicle” means –
(a) a road vehicle designed to carry loads of more than half a tonne or
more than thirteen passengers; or
(b) a vehicle used in a transportation or vehicle rental business.

Inserted by
27A. Initial Allowance IT (Am 2) Act 2017
(1) A person who places an item of eligible property into service for the first
time outside a radius of fifty kilometres from the boundaries of
- 46 -
Kampala, during a year of income is allowed a deduction for that year

of an amount equal to fifty percent of the cost base of the property at the
time it was placed into service.
(2) The cost base of an asset to which subsection (1) applies is reduced by
the amount of the deduction allowed under that subsection for purposes
of Section 27(4)(b).
(3) In this Section, “item of eligible property” means plant and machinery
wholly used in the production of income included in gross income but
does not include –
(a) goods and passenger transport vehicles;
(b) appliances of a kind ordinarily used for household purposes; or
(c) office or household furniture, fixtures and fittings.
(4) A person who places a new industrial building in service for the first
time during the year of income is allowed a deduction for that year of
an amount equal to 20% of the cost base of the industrial building at the
time it was placed in service.
(5) The cost base of an industrial building to which subsection (4) applies is
reduced by the amount of deduction allowed under that subsection for
the purposes of Section 29.
(6) Where a person has incurred capital expenditure on the extension of an

existing industrial building, this Section applies as if the expenditure
was capital expenditure incurred on the construction of a separate
industrial building.
(7) For the purposes of subsections (4) and (6), a new industrial building or
extension of an existing industrial building means a building on which
construction was commenced on or after 1st July 2000.
(8) In this Section, “industrial building” does not include an approved

commercial building.
Repealed by IT (Am) Act 2014 & Re-enacted
28. Initial Allowance as section 27A by IT (Am 2) Act 2017
(1) A person who places an item of eligible property into service for the first
an amount equal to –
- 47 -
(a) where the asset is placed in service outside an area prescribed in

Part IV of the Sixth Schedule to this Act, seventy five per cent of
the cost base of the property at the time it is placed in service; or
(b) in any other case, fifty per cent of the cost base of the property at
the time it is placed in service.
(2) The cost base of an asset to which subsection (1) applies is reduced by
the amount of the deduction allowed under that subsection for the
purposes of Section 27(4)(b).
(3) In this Section, “item of eligible property” means plant and machinery
wholly used in the production of income included in gross income but
does not include –
(a) goods and passenger transport vehicles;
(b) appliances of a kind ordinarily used for household purposes; or
(c) office or household furniture, fixtures and fittings.
(4) A person who places a new industrial building in service for the first
[4-8] Inserted by
Finance Act 2001 an amount equal to 20% of the cost base of the building at the time it
was placed in service.
(5) The cost base of an industrial building to which subsection (4) applies is
reduced by the amount of deduction allowed under that subsection for
the purposes of Section 29.
(6) Where a person has incurred capital expenditure on the extension of an

existing industrial building, this Section applies as if the expenditure
was capital expenditure incurred on the construction of a separate
industrial building.
(7) For the purposes of subsections (4) and (6), a new industrial building or
extension of an existing industrial building means a building on which
construction was commenced on or after 1st July 2000.
(8) In this Section, “industrial building” does not include an approved

commercial building.
- 48 -
29. Industrial Buildings
(1) Subject to this Section, where a person has incurred capital expenditure
in any year of income on the construction of an industrial building and
the building is used by the person during the year of income in the
production of income included in gross income, the person is allowed a
deduction for the depreciation of the building during the year of income
as calculated according to the following formula –
A x B x C/D
where –
A is the depreciation rate applicable to the building as

determined under Part III of the Sixth Schedule;
B is the capital expenditure incurred in the construction of the

building;
C is the number of days in the year of income during which the

asset was used or was available for use in the production of
income included in gross income; and
D is the number of days in the year of income.
(2) Subject to subsection (3), where an industrial building is only partly

used by a person during a year of income for prescribed uses, the
amount of the depreciation deduction allowed under subsection (1)
shall be proportionately reduced.
(3) Where an industrial building is only partly used by a person during a

year of income for prescribed uses and the capital expenditure incurred
in the construction of that part of the building used for other uses is not
more than ten per cent of the total capital expenditure incurred on the
construction of the building, the building is treated as wholly used for
prescribed uses.
(4) Where a person has incurred expenditure in making a capital

improvement to an industrial building in a year of income, this Section
applies as if the expenditure was capital expenditure incurred in that
year in the construction of a separate industrial building.
- 49 -
(5) Where an industrial building is purchased by a person, the person is

deemed to have incurred the capital expenditure incurred by the person
who constructed the building.
(6) The amount of the deduction allowed under this Section is not to
exceed the amount which, apart from making the deduction, would be
the residue of expenditure at the end of the year of income.
(7) Where an industrial building has been disposed of by a person during a

year of income, the cost base of the building for the purposes of this Act
is reduced by any deductions allowed to the person under this Section
in respect of the building.
(8) Where an industrial building is bought and sold together with land, the
value of the land shall be the difference between the total consideration
and the value of the industrial building as defined in subsection (7).
(9) Where subsection (4) applies, the consideration received on disposal of

an industrial building shall be reasonably apportioned among the
separate industrial buildings identified under that subsection.
(a) “capital expenditure” does not include –
(i) expenditure incurred in the acquisition of a depreciable asset

installed in an industrial building; or
(ii) expenditure incurred in the acquisition of, or of any rights in

or over, any land;
(b) “prescribed uses” means the uses specified in the definition of

“industrial building” in Section 2; and
(c) “residue of expenditure” means the capital expenditure incurred

on the construction of an industrial building less any deductions
allowed under this Section to any person and any amounts which
would have been allowed as deductions if the building was solely
used for prescribed uses at all times since construction was
completed.
- 50 -
30. Start-Up Costs
(1) A person who has incurred expenditure in starting up a business to

produce income included in gross income or in the initial public offering at
Substituted by
IT (Am) Act 2002 the stock market shall be allowed a deduction of an amount equal to
twenty five per cent of the amount of the expenditure in the year of
income in which the expenditure was incurred and in the following
three years of income in which the business is carried on by the person.
(2) In this section, “expenditure in starting up a business” means –
Inserted by
IT (Am) Act 2014
(a) in the case of initial public offering, costs incurred in listing the
business with the Uganda Stock Exchange;
(b) in any other case, non-recurring preliminary or pre-opening costs,

which are associated with setting up a business such as fees of an
accountant, registration charges, legal fees, costs for promotional
and advertising activities, as well as costs for employee training.
31. Costs of Intangible Assets
(1) A person who has incurred expenditure in acquiring an intangible asset

having an ascertainable useful life is allowed a deduction in each year of
income during the useful life of the asset in which the person wholly
uses the asset in the production of income included in gross income of
an amount calculated according to the following formula –
A/B
where –
A is the amount of expenditure incurred; and
B is the useful life of the asset in whole years.
(2) Where an intangible asset has been disposed of by a person during the
year of income, the cost base of the asset is reduced by any deductions
allowed under this Section to the person in respect of the asset.
32. Scientific Research Expenditure
(1) A person is allowed a deduction for scientific research expenditure

incurred during the year of income in the course of carrying on a
business, the income from which is included in gross income.
- 51 -
(a) “scientific research” means any activities in the fields of natural or

applied science for the development of human knowledge;
(b) “scientific research expenditure”, in relation to a person carrying

on business, means the cost of scientific research undertaken for
the purposes of developing the person’s business, including any
contribution to a scientific research institution which is used by
the institution in undertaking research for the purposes of
developing the person’s business, but does not include –
(i) expenditure incurred for the acquisition of a depreciable or

intangible asset;
(ii) expenditure incurred for the acquisition of land or buildings;

or
(iii) expenditure incurred for the purpose of ascertaining the

existence, location, extent, or quality of a natural deposit; and
(c) “scientific research institution” means an association, institute,

college, or university which undertakes scientific research.
33. Training Expenditure
(1) An employer is allowed a deduction for expenditure incurred during the

year of income for the training or tertiary education, not exceeding in
the aggregate five years, of a citizen or permanent resident of Uganda,
other than an associate of the employer, who is employed by the
employer in a business, the income from which is included in gross
income.
(2) In this Section, “permanent resident” means a resident individual who

has been present in Uganda for a period or periods in total of five years
or more.
34. Charitable Donations
(1) A person is allowed a deduction for a gift made during a year of income
to an organisation within Section 2(bb)(i)(A) or (B) of the definition of
“exempt organisation”.
- 52 -
(2) For the purposes of subsection (1), the value of a gift of property is the
lesser of –
(a) the value of the property at the time of the making of the gift; or
(b) the consideration paid by the person for the property.
(3) The amount of a deduction allowed under subsection (1) for a year of
income shall not exceed five per cent of the person’s chargeable income,
calculated before taking into account the deduction under this Section.
35. Farming
(1) Expenditure incurred by a person in acquiring farm works is included in

the person’s pool for class 4 assets under Section 27 in the year of
income in which the expenditure is incurred and is depreciated
accordingly.
(2) Subject to subsection (3), a person carrying on a business of horticulture

Inserted by the
in Uganda to produce income included in gross income, who has incurred
IT (Am) Act 2002 expenditure of a capital nature on –
(a) the acquisition or establishment of a horticultural plant; or
(b) the construction of a greenhouse,
shall be allowed a deduction of an amount equal to twenty per cent of

the amount of the expenditure in the year of income in which the
expenditure was incurred and in the following four years of income in
which the plant or greenhouse is used in the business of horticulture
carried on by the person.
(3) Expenditure of a capital nature incurred on the establishment of a

horticultural plant shall include expenditure incurred in draining or
clearing land.
(a) ”farm works” means any labour quarters and other immovable
buildings necessary for the proper operation of a farm, fences, dips,
drains, water and electricity supply works, windbreaks, and other
Inserted by
works necessary for farming operations carried on to produce income
IT (Am) Act 2002 included in gross income, but does not include:–
- 53 -
(i) farm houses; or
(ii) depreciable assets; and
(b) “horticulture” includes –
(i) propagation or cultivation of seeds, bulbs, spores, or similar

things;
(ii) propagation or cultivation of fungi; or
(iii) propagation or cultivation in environments other than soil,

whether natural or artificial.
36. Mineral Exploration Expenditures Inserted by IT (Am) Act 2002

Repealed by IT (Am) Act 2015
A person carrying on mining operations to produce income included in gross

income is allowed a deduction for any expenditure of a capital nature incurred
in searching for, discovering and testing, or winning access to deposits of
minerals in Uganda.
37. Apportionment of Deductions
(1) A deduction relating to the production of more than one class of

income shall be reasonably apportioned among the classes of income to
which it relates.
(2) Where a person derives more than one class of income, the deduction
allowed under Section 34 shall be allocated rateably to each class of
income.
38. Carry Forward Losses
(1) Subject to this Section and Section 75, where, for any year of income, the
total amount of income included in the gross income of a taxpayer is
Inserted by
IT (Am) Act 2016
exceeded by the total amount of deductions allowed to the taxpayer, the
amount of the excess, in this Act referred to as an “assessed loss”, shall
be carried forward and allowed as a deduction in determining the
taxpayer’s chargeable income in the following year of income.
(2) Where, for any year of income, the total farming income derived by a
taxpayer who is an individual is exceeded by the total deductions
allowed to the taxpayer relating to the production of that income, the
amount of the excess, in this Act referred to as an “assessed farming
- 54 -
loss”, may not be deducted against any other income of the taxpayer for
the year of income, but shall be carried forward and allowed as a
deduction in determining the chargeable farming income of the
taxpayer in the following year of income.
(3) The amount of an assessed loss carried forward under this Section for a
taxpayer shall be reduced by the amount or value of any benefit to the
taxpayer from a concession granted by, or a compromise made with,
Inserted by the taxpayer’s creditors in the course of an insolvency whereby the
IT (Am) Act 2002
taxpayer’s liabilities to those creditors have been extinguished or
reduced, provided such liabilities were incurred in the production of
income included in gross income.
(4) Where a taxpayer has more than one class of loss, the reduction in
subsection (3) shall be applied rateably to each class of loss.
(5) Subsection (1) shall apply separately to income derived from sources in
Uganda and to foreign-source income.
(a) “chargeable farming income” means the total farming income of a

taxpayer for a year of income reduced by any deductions allowed
under this Act for that year which relate to the production of such
income; and
(b) “farming income” means the business income derived from the
carrying on of farming operations.
PART V – TAX ACCOUNTING PRINCIPLES
39. Substituted Year of Income
(1) A taxpayer may apply, in writing, to use as the taxpayer’s year of

income a substituted year of income being a twelve-month period other
than the normal year of income and the Commissioner may, subject to
subsection (3), by notice in writing, approve the application.
(2) A taxpayer granted permission under subsection (1) to use a substituted

year of income may apply, in writing, to change the taxpayer’s year of
income to the normal year of income or to another substituted year of
income and the Commissioner, subject to subsection (3), may, by notice
in writing, approve the application.
- 55 -
(3) The Commissioner may only approve an application under subsection

(1) and (2) if the taxpayer has shown a compelling need to use a
substituted year of income or to change the taxpayer’s year of income
and any approval is subject to such conditions as the Commissioner
may prescribe.
(4) The Commissioner may, by notice in writing to a taxpayer, withdraw

the permission to use a substituted year of income granted under
subsection (1) or (2).
(5) A notice served by the Commissioner under subsection (1) takes effect
on the date specified in the notice, and a notice under subsection (2) or
(4) takes effect at the end of the substituted year of income of the
taxpayer in which the notice was served.
(6) Where the year of income of a taxpayer changes as a result of

subsections (1), (2), or (4), the period between the last full year of
income prior to the change and the date on which the changed year of
income commences is treated as a separate year of income, to be known
as the “transitional year of income”.
(7) In this Act, a reference to a particular normal year of income includes a

substituted year of income or a transitional year of income commencing
during the normal year of income.
(8) A taxpayer dissatisfied with a decision of the Commissioner under

subsections (1), (2), or (4) may only challenge the decision under the
objections and appeal procedure in this Act.
(9) In this Section, “normal year of income” means the period of twelve
months ending on the 30th June.
40. Method of Accounting
(1) A taxpayer’s method of accounting shall conform to generally accepted

accounting principles.
(2) Subject to subsection (1) and unless the Commissioner prescribes

otherwise in a particular case, a taxpayer may account for tax purposes
on a cash or accrual basis.
(3) A taxpayer who intends to change the taxpayer’s method of accounting

Substituted by shall apply in writing to the Commissioner and the Commissioner may, by
IT (Am) Act 2010
- 56 -
notice in writing, approve the application where he or she is satisfied that

the change is necessary to clearly reflect the taxpayer’s income.
(4) A taxpayer dissatisfied with a decision under this Section may only
challenge the decision under the objection and appeal procedure in this
Act.
(5) If the taxpayer’s method of accounting is changed, adjustments to items

of income, deduction, or credit or to other items shall be made in the
year of income following the change, so that no item is omitted and no
item is taken into account more than once.
41. Cash-Basis Taxpayer
A taxpayer who is accounting for tax purposes on a cash basis derives income
when it is received or made available and incurs expenditure when it is paid.
42. Accrual-Basis Taxpayer
(1) A taxpayer who is accounting for tax purposes on an accrual basis –
(a) derives income when it is receivable by the taxpayer; and
(b) incurs expenditure when it is payable by the taxpayer.
(2) Subject to this Act, an amount is receivable by a taxpayer when the

taxpayer becomes entitled to receive it, even if the time for discharge of
the entitlement is postponed or the entitlement is payable by
instalments.
(3) Subject to this Act, an amount is treated as payable by the taxpayer

when all the events that determine liability have occurred and the
amount of the liability can be determined with reasonable accuracy, but
not before economic performance with respect to the amount occurs.
(4) For the purposes of subsection (3), economic performance occurs –
(a) with respect to the acquisition of services or property, at the time

the services or property are provided;
(b) with respect to the use of property, at the time the property is used;
or
- 57 -
(c) in any other case, at the time the taxpayer makes payment in full
satisfaction of the liability.
43. Pre-payments
Where a deduction is allowed for expenditure incurred on a service or other

benefit which extends beyond thirteen months, the deduction is allowed
proportionately over the years of income to which the service or other benefit
relates.
44. Claim of Right
(1) A taxpayer who is accounting for tax purposes on a cash basis shall
include an amount in gross income when received or claim a deduction
Substituted by
IT (Am) Act 2002 for an amount when paid, notwithstanding that the taxpayer is not
legally entitled to receive the amount or liable to make the payment, if
the taxpayer claims to be legally entitled to receive, or legally obliged to
pay the amount.
(2) Where subsection (1) applies, the calculation of the chargeable income
of the taxpayer shall be adjusted for the year of income in which the
taxpayer refunds the amount received or recovers the amount paid.
(3) A taxpayer who is accounting for tax purposes on an accrual basis shall
include an amount in gross income when receivable or claim a
Substituted by
IT (Am) Act 2002 deduction for an amount when payable notwithstanding that the
taxpayer is not legally entitled to receive the amount or liable to make
the payment, if the taxpayer claims to be legally entitled to receive, or to
be legally obliged to pay the amount.
(4) Where subsection (3) applies, the calculation of the chargeable income
of the taxpayer shall be adjusted for the year of income in which the
taxpayer ceases to claim the right to receive the amount or ceases to
claim an obligation to pay the amount.
45. Long-Term Contracts
(1) In the case of an accrual-basis taxpayer, income and deductions relating

to a long-term contract are taken into account on the basis of the
percentage of the contract completed during the year of income.
(2) The percentage of completion is determined by comparing the total

costs allocated to the contract and incurred before the end of the year of
- 58 -
income with the estimated total contract costs as determined at the time
of commencement of the contract.
(3) Where, in the year of income in which the long-term contract is

completed, it is determined that the contract has made a final year loss,
the Commissioner may allow the loss to be carried back to the
Substituted by preceding years of income and applied against an amount in gross
IT (Am) Act 2002
income over the period of the contract under subsection (1) for those
years starting with the year immediately preceding the year in which the
contract was completed.
(a) “final year loss”, in relation to a long-term contract, occurs where

both the following conditions are satisfied –
(i) the profit estimated to be made under the contract for the
purposes of subsection (1) exceeds the actual profit, including
a loss, made under the contract; and
(ii) the difference between the estimated profit and the actual
profit exceeds the amount included in income under
subsection (1) for the year of income in which the contract is
completed,
and the amount of the excess referred to in subparagraph (ii) of

this paragraph is the amount of the final year loss; and
(b) “long-term contract” means a contract for manufacture,

installation, or construction, or, in relation to each, the
performance of related services, which is not completed within the
year of income in which work under the contract commenced,
other than a contract estimated to be completed within six months
of the date on which work under the contract commenced.
46. Trading Stock
(1) A taxpayer is allowed a deduction for the cost of trading stock disposed
of during a year of income.
(2) The cost of trading stock disposed of during a year of income is

determined by adding to the opening value of trading stock for the year,
the cost of trading stock acquired during the year, and subtracting the
closing value of trading stock for the year.
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(3) The opening value of trading stock for a year of income is –
(a) the closing value of trading stock at the end of the previous year of
income; or
(b) where the taxpayer commenced business during the year of

Substituted by
IT (Am) Act 2002 income, the market value, at the time of commencement of the business,
of trading stock acquired prior to the commencement of the
business.
(4) The closing value of trading stock is the lower of cost or market value of
trading stock on hand at the end of the year of income.
(5) A taxpayer who is accounting for tax purposes on a cash basis may
calculate the cost of trading stock on the prime-cost method or
absorption-cost method; and a taxpayer who is accounting for tax
purposes on an accrual basis shall calculate the cost of trading stock on
the absorption-cost method.
(6) Where particular items of trading stock are not readily identifiable, a tax
payer may account for that trading stock on the first-in-first-out method
or the average cost method but, once chosen, a stock valuation method
may be changed only with the written permission of the Commissioner.
(a) “absorption-cost method” means the generally accepted

accounting principle under which the cost of trading stock is the
sum of direct material costs, direct labour costs, and factory
overhead costs;
(b) “average-cost method” means the generally accepted accounting

principle under which trading stock valuation is based on a
weighted average cost of units on hand;
(c) “direct labour costs” means labour costs directly related to the
production of trading stock;
(d) “direct material costs” means the cost of materials that become an
integral part of the trading stock produced;
(e) “factory overhead costs” means the total costs of manufacturing

except direct labour and direct material costs;
- 60 -
(f) “first-in-first-out method” means the generally accepted accounting

principle under which trading stock valuation is based on the
assumption that trading stock is sold in the order of its receipt;
(g) “prime-cost method” means the generally accepted accounting

principle under which the cost of trading stock is the sum of direct
material costs, direct labour costs, and variable factory overhead
costs; and
(h) “variable factory overhead costs” means those factory overhead

costs which vary directly with changes in volume.
47. Debt Obligations with Discount or Premium
(1) Subject to subsection (2), interest in the form of any discount, premium,
or deferred interest shall be taken into account as it accrues.
(2) Where the interest referred to in subsection (1) is subject to withholding

tax, the interest shall be taken to be derived or incurred when paid.
48. Foreign Currency Debt Gains and Losses
(1) Foreign currency debt gains are included in gross income and foreign
currency debt losses are deductible only under this Section.
(2) A foreign currency debt gain derived by a taxpayer during the year of
income is included in the business income of the taxpayer for that year.
(3) Subject to subsection (4) and (6), a foreign currency debt loss incurred
by a taxpayer during a year of income is allowed as a deduction to the
taxpayer in that year.
(4) A deduction is not allowed to a taxpayer for a foreign currency debt loss
incurred by the taxpayer unless the taxpayer has notified the
Commissioner in writing of the existence of the debt which gave rise to
the loss by the due date for furnishing of the taxpayer’s return of income
for the year of income in which the debt arose or by such later date as
the Commissioner may allow.
(5) Subsection (4) does not apply to a financial institution.
(6) Where –
- 61 -
(a) a taxpayer has incurred a foreign currency debt loss under a

transaction;
(b) the taxpayer or another person has derived a foreign currency debt
gain under another transaction; and
(c) either –
(i) the transaction giving rise to the loss would not have been
entered into, or might reasonably be expected not to have
been entered into, if the transaction giving rise to the gain
had not been entered into; or
(ii) the transaction giving rise to the gain would not have been
entered into, or might reasonably be expected not to have
been entered into, if the transaction giving rise to the loss had
not been entered into,
no deduction is allowed to the taxpayer to the extent that the

amount of the loss exceeds that part of the gain included in gross
income.
(7) Subject to subsection (9), a taxpayer derives a foreign currency debt gain
if –
(a) where the taxpayer is a debtor, the amount in Shillings of the

foreign currency debt incurred by the taxpayer is greater than the
amount in Shillings required to settle the debt; or
(b) where the taxpayer is a creditor, the amount in Shillings of the

foreign currency debt owed to the taxpayer is less than the amount
in Shillings paid to the taxpayer in settlement of the debt.
(8) Subject to subsection (9), a taxpayer incurs a foreign currency debt loss
if:–
(a) where the taxpayer is a debtor, the amount in Shillings of the

foreign currency debt incurred by the taxpayer is less than the
amount in Shillings required to settle the debt; or
(b) where the taxpayer is a creditor, the amount in Shillings of the

foreign currency debt owed to the taxpayer is greater than the
amount in shillings paid to the taxpayer in settlement of the debt.
- 62 -
(9) In determining whether a taxpayer has derived a foreign currency debt

gain or incurred a foreign currency debt loss, account shall be taken of
the taxpayer’s position under any hedging contract entered into by the
taxpayer in respect of the debt.
(10) A foreign currency debt gain is derived or a foreign currency debt loss is
incurred by a taxpayer in the year of income in which the debt is
satisfied.
(a) “foreign currency debt” means a business debt denominated in

foreign currency; and
(b) “hedging contract” means a contract entered into by the taxpayer

for the purpose of eliminating or reducing the risk of adverse
financial consequences which might result for the taxpayer under
another contract from currency exchange rate fluctuation.
PART VI – GAINS AND LOSSES ON DISPOSAL OF ASSETS
49. Application of Part VI
This Part applies for the purposes of determining the amount of any gain or
loss arising on the disposal of an asset where the gain is included in gross
income or the loss is allowed as a deduction under this Act.
50. Gains and Losses on Disposal of Assets
(1) The amount of any gain arising from the disposal of an asset is the
excess of the consideration received for the disposal over the cost base
of the asset at the time of the disposal.
(2) The amount of any loss arising from the disposal of an asset is the
excess of the cost base of the asset at the time of the disposal over the
consideration received for the disposal.
51. Disposals
(1) A taxpayer is treated as having disposed of an asset when the asset has
been –
(a) sold, exchanged, redeemed, or distributed by the taxpayer;
- 63 -
(b) transferred by the taxpayer by way of gift; or
(c) destroyed or lost.
(2) A disposal of an asset includes a disposal of a part of the asset.
(3) Where the Commissioner is satisfied that a taxpayer –
(a) has converted an asset from a taxable use to non-taxable use; or
(b) has converted an asset from a non-taxable use to a taxable use,
the taxpayer is deemed to have disposed of the asset at the time of the
conversion for an amount equal to the market value of the asset at that
time and to have immediately re-acquired the asset for a cost base equal
to that same value.
(4) A non-resident person who becomes a resident person is deemed to

have acquired all assets, other than taxable assets, owned by the person
at the time of becoming a resident for their market value at that time.
(5) A resident person who becomes a non-resident person is deemed to

have disposed of all assets, other than taxable assets, owned by the
person at the time of becoming a non-resident for their market value at
that time.
(6) Where a person to whom subsection (5) would otherwise apply-
(a) intends, in the future, to re-acquire status as a resident person; and
(b) provides the Commissioner with sufficient security to satisfy any

tax liability which would otherwise arise under subsection (5),
the Commissioner may, by notice in writing, exempt the person from

the application of subsection (5).
(7) In this Section, “taxable asset” means an asset the disposal of which
would give rise to a gain included in the gross income of, or a loss
allowed as a deduction to, a resident or non-resident taxpayer.
52. Cost Base
(1) Subject to this Act, this Section establishes the cost base of an asset for
the purpose of this Act.
- 64 -
(2) The cost base of an asset purchased, produced, or constructed by the

taxpayer is the amount paid or incurred by the taxpayer in respect of the
Inserted by asset, including incidental expenditures of a capital nature incurred in
IT (Am) Act 2002
acquiring the asset, and includes the market value at the date of
acquisition of any consideration in kind given for the asset.
(3) Subject to subsection (4), the cost base of an asset acquired in a non-
arm’s length transaction is the market value of the asset at the date of
acquisition.
(4) The cost base of an asset acquired in a transaction described in Section

53(2) is the amount of the consideration deemed by that subsection to
have been received by the person disposing of the asset.
(5) Where a part of an asset is disposed of, the cost base of the asset shall be
apportioned between the part of the asset retained and the part disposed
of in accordance with their respective market values at the time of
acquisition of the asset.
(6) Unless otherwise provided in this Act, expenditures incurred to alter or

improve an asset which have not been allowed as a deduction are added
to the cost base of the asset.
(7) Where the acquisition of an asset by a taxpayer represents the

derivation of an amount included in gross income, the cost base of the
asset is the amount included in gross income plus any amount paid by
the taxpayer for the asset.
(8) Where the receipt of an asset represents the derivation of an amount

which is exempt from tax, the cost base of the asset is the amount
exempt from tax plus any amount paid by the taxpayer for the asset.
53. Special Rules for Consideration Received
(1) The consideration received on disposal of an asset includes the market

Inserted by value at the date of the disposal of any consideration received in kind.
IT (Am) Act 2002
(2) Where an asset is disposed of to an associate or in a non-arm’s length

transaction other than by way of transmission of the asset to a trustee or
beneficiary on the death of a taxpayer, the person disposing of the asset,
in this Section referred to as the “disposer”, is treated as having received
consideration equal to the greater of –
(a) the cost base of the asset to the disposer at the time of disposal; or
- 65 -
(b) the fair market value of the asset at the date of disposal.
(3) Where two or more assets are disposed of in a single transaction and the
consideration paid for each asset is not specified, the total consideration
received is apportioned among the assets disposed of in proportion to
their respective market values at the time of the transaction.
(4) Where a part of an asset is disposed of, the consideration received is

Repealed by apportioned between the part of the asset retained and the part of the
IT (Am) Act 2002
asset disposed of in accordance with their respective market values at
the time of acquisition of the asset.
54. Non-Recognition of Gain or Loss
(1) No gain or loss is taken into account in determining chargeable income

in relation to –
(a) a transfer of an asset between spouses;
(b) a transfer of an asset between former spouses as part of a divorce

settlement or bona fide separation agreement;
(c) an involuntary disposal of an asset to the extent to which the

proceeds are reinvested in an asset of a like kind within one year of
the disposal; or
(d) the transmission of an asset to a trustee or beneficiary on the death

of a taxpayer.
(2) Where no gain or loss is taken into account as a result of subsection

(1)(a), (b), or (d), the transferred or transmitted asset is deemed to have
been acquired by the transferee, or trustee or beneficiary as an asset of
the same character for a consideration equal to the cost base of the asset
to the transferor or deceased taxpayer at the time of the disposal.
(3) The cost base of a replacement asset described in subsection (1)(c) is the
cost base of the replaced asset plus the amount by which any
consideration given by the taxpayer for the replaced asset exceeds the
amount of proceeds received on the involuntary disposal.
- 66 -
PART VII – MISCELLANEOUS RULES FOR DETERMINING

CHARGEABLE INCOME
55. Income of Joint Owners
(1) Income or deductions relating to jointly owned property are

apportioned among the joint owners in proportion to their respective
interests in the property.
(2) Where the interest of the joint owners in jointly-owned property cannot
be ascertained, the interest of such joint owners in the property shall be
deemed to be equal.
56. Valuation
(1) For the purposes of this Act and subject to Section 19(1)(b), the value of
a benefit in kind is the fair market value of the benefit on the date the
benefit is taken into account for tax purposes.
(2) The fair market value of a benefit is determined without regard to any
restriction on transfer or to the fact that it is not otherwise convertible to
cash.
56A. Other Methods of allocating Costs and Revenue
Inserted by In determining the chargeable income of a person, use of input-output

IT (Am) Act 2013
ratios and other methods of allocating costs and revenue may be
applied.
57. Currency Conversion
(1) Chargeable income under this Act shall be calculated in Uganda

Shillings.
(2) Where an amount taken into account under this Act is in a currency other
Substituted by than the Uganda Shilling, the amount shall be converted to the Uganda
IT (Am) Act 2002
Shilling at the Bank of Uganda mid-exchange rate applying between the
currency and the Uganda Shilling on the date that the amount is
derived, incurred, or otherwise taken into account for tax purposes.
(3) With the prior written permission of the Commissioner, a taxpayer may
use the average rate of exchange during the year of income, or may
keep books of account in a currency other than the Uganda Shilling.
- 67 -
58. Indirect Payments and Benefits
The income of a person includes –
(a) a payment that directly benefits the person; and
(b) a payment dealt with as the person directs,
which would have been income of the person if the payment had been made
directly to the person.
59. Finance Leases
(1) Where a lessor leases property to a lessee under a finance lease, for the
purposes of this Act –
(a) the lessee is treated as the owner of the property; and
(b) the lessor is treated as having made a loan to the lessee, in respect
of which payments of interest and principal are made to the lessor
equal in amount to the rental payable by the lessee.
(2) The interest component of each payment under the loan is treated as
interest expense incurred by the lessee and interest income derived by
the lessor.
(3) A lease of property is a finance lease if –
(a) the lease term exceeds seventy-five per cent of the effective life of
the leased property;
(b) the lessee has an option to purchase the property for a fixed or
determinable price at the expiration of the lease; or
(c) the estimated residual value of the property to the lessor at the
expiration of the lease term is less than twenty per cent of its fair
market value at the commencement of the lease.
(4) For the purposes of subsection (3), the lease term includes any
additional period of the lease under an option to renew.
- 68 -
60. Exclusion of Doctrine of Mutuality
(1) A company which carries on a member’s club, a trade association, or a

mutual insurance company is treated for the purposes of this Act as
carrying on a business subject to tax.
(2) The business income of a company to which subsection (1) applies

includes entrance fees and subscriptions paid by members.
(3) Where a company referred to in subsection (1) is operated primarily to

furnish goods or services to members, deductions attributable to the
furnishing of goods or services to members are allowed only to the
extent of the total income derived from the members, with any excess
carried forward and allowed as a deduction in the following year of
income.
(4) In this Section, “member’s club” means a club or similar institution, all
the assets of which are owned by or are held in trust for the members of
the club or institution.
61. Compensation Receipts
A compensation payment derived by a person takes the character of the item

that is compensated.
62. Recouped Expenditure
(1) Where a previously deducted expenditure, loss, or bad debt is recovered

by the taxpayer, the amount recovered is deemed to be income derived
by the taxpayer in the year of income in which it is recovered and takes
the character of the income to which the deduction related.
(2) For the purposes of subsection (1), a deduction is considered

recovered upon the occurrence of an event which is inconsistent with
the basis for the deduction.
PART VIII – PERSONS ASSESSABLE
Taxation of Individuals
63. Taxation of Individuals
The chargeable income of each taxpayer who is an individual is determined

separately.
- 69 -
64. Income Splitting
(1) Where a taxpayer attempts to split income with another person, the
Commissioner may adjust the chargeable income of the taxpayer and
the other person to prevent any reduction in tax payable as a result of
the splitting of income.
(2) A taxpayer is treated as having attempted to split income where –
(a) the taxpayer transfers income, directly or indirectly, to an

associate; or
(b) the taxpayer transfers property, including money, directly or

indirectly, to an associate with the result that the associate receives
or enjoys the income from that property,
and the reason or one of the reasons for the transfer is to lower the total
tax payable upon the income of the transferor and the transferee.
(3) In determining whether the taxpayer is seeking to split income, the

Commissioner shall consider the value, if any, given by the associate for
the transfer.
Taxation of Partnerships and Partners
65. Principles of Taxation for Partnerships
(1) The income and losses arising from activities conducted by a

partnership is taxed in accordance with this Act.
(2) The presence or absence of a written partnership agreement is not

decisive in determining whether a partnership relationship exists
between persons.
(3) A partnership shall be liable to furnish a partnership return of income in

accordance with Section 92, but shall not be liable to pay tax on that
income.
(4) Any election, notice, or statement required to be filed in relation to a

partnership’s activities shall be filed by the partnership.
(5) Unless the context otherwise requires, partnership assets are treated as
Inserted by owned by the partnership and not the partners.
IT (Am) Act 2002
- 70 -
66. Calculation of Partnership Income or Loss
(1) The partnership income for a year of income is –
(a) the gross income of the partnership for that year calculated as if the
partnership were a resident taxpayer; less
(b) the total amount of deductions allowed under this Act for
expenditures or losses incurred by the partnership in deriving that
income, other than the deduction allowed under Section 38.
(2) A partnership loss occurs for a year of income where the amount in
subsection (1)(b) exceeds the amount in subsection (1)(a) for that year;
and the amount of the excess is the amount of the loss.
(3) Where the partnership is a non-resident partnership for a year of

income, Section 87 applies in calculating partnership income or
partnership loss of the partnership for that year.
67. Taxation of Partners
(1) The gross income of a resident partner for a year of income includes the
partner’s share of partnership income for that year.
(2) The gross income of a non-resident partner for a year of income

includes the partner’s share of partnership income attributable to
sources in Uganda.
(3) A resident partner is allowed a deduction for a year of income for the
partner’s share of a partnership loss for that year.
(4) A non-resident partner is allowed a deduction for a year of income for

the partner’s share of a partnership loss, but only to the extent that the
activity giving rise to the loss would have given rise to partnership
income attributable to sources in Uganda if a loss had not been
incurred.
(5) Income derived, or expenditure or losses incurred, by a partnership

retain their character as to geographic source and type of income,
expenditure, or loss in the hands of the partners, and are deemed to
have been passed through the partnership on a pro rata basis unless the
Commissioner permits otherwise.
- 71 -
(6) Subject to subsection (7), a partner’s share of partnership income or loss

is equal to the partner’s percentage interest in the income of the
partnership as set out in the partnership agreement.
(7) Where the allocation of income in the partnership agreement does not
reflect the contribution of the partners to the partnership’s operations, a
partner’s share of partnership income or loss shall be equal to the
partner’s percentage interest in the capital of the partnership.
68. Formation, Reconstitution, or Dissolution of a Partnership
(1) A contribution to a partnership by a partner of an asset owned by the

partner is treated as a disposal of the asset by the partner to the
partnership for a consideration equal to –
(a) the cost base of the asset to the partner at the date on which the
contribution was made where all the following conditions are
satisfied –
(i) the asset was a business asset of the partner immediately

before its contribution to the partnership;
(ii) the partner and partnership are residents at the time of

contribution;
(iii) the partner’s interest in the capital of the partnership after the
contribution is twenty five per cent or more;
(iv) an election for this paragraph to apply has been made by the
partners jointly;
(v) the interest in the partnership received by the partner in return

Inserted by
IT (Am) Act 2002 for the contribution equals the market value of the asset
contributed at the time of the contribution; or
(b) in any other case, the market value of the asset at the date the
contribution was made.
(2) Where subsection (1)(a) applies, the asset retains the same character in
the hands of the partnership as it did in the hands of the partner.
(3) Where there is a change in the constitution of a partnership or a

partnership is dissolved, the former partnership is treated as having
disposed of all the assets of the partnership to the reconstituted
- 72 -
partnership or to the partners in the case of dissolution for a

consideration equal to –
(a) the cost base of the asset to the former partnership at the date of
the change in constitution where all the following conditions are
satisfied –
(i) the former partnership and the reconstituted partnership are

resident partnerships at the time of the change;
(ii) twenty-five per cent or more of the interests in the capital of

the reconstituted partnership are held for twelve months after
the change by persons who were partners in the former
partnership immediately before the change; and
(iii) an election for this paragraph to apply has been made by the
partners of the reconstituted partnership jointly; or
(b) in any other case, the market value of the asset at the date of the
change in constitution or dissolution, as the case may be.
(4) Where subsection (3)(a) applies, the asset retains the same character in
the hands of the reconstituted partnership as it did in the hands of the
former partnership.
(5) An election under this Section shall be made in the partnership return of
income for the year of income in which the contribution was made or
the constitution of the partnership changed.
69. Cost Base of Partner’s Interest
(1) A partner’s interest in a partnership is treated as a business asset of the

partner for all purposes of this Act.
(2) Subject to subsection (3) and (4), the cost base of a partner’s interest in a
partnership is [the amount the partner has paid for the interest plus] –
(a) in the case of an interest acquired by contribution of property (including

money) to the partnership, the amount of any such money contributed
plus:–
Substituted by
IT (Am) Act 2002
(i) the cost base of an asset contributed to the partnership by the
partner where Section 68(1)(a) applies; and
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(ii) the market value of any asset contributed to the partnership by

the partner where Section 68(1)(b) applies; or
(b) in any other case, the price paid for the interest.
(3) The cost base of a partner’s interest in a partnership determined under

subsection (2) is increased by the sum of the partner’s share for the year
of income and prior years of income of –
(a) partnership income; and
(b) income of the partnership exempt from tax under this Act.
(4) The cost base of a partner’s interest in a partnership determined under

subsection (2) is reduced, but not below zero, by distributions by the
partnership and by the sum of the partner’s share for the year of income
and prior years of income of partnership losses and expenditures of the
partnership not deductible in computing its chargeable income and not
properly chargeable to capital account.
Taxation of Trusts and Beneficiaries
70. Interpretation of Provisions relating to Taxation of Trusts and

Beneficiaries
In this Section and Sections 71, 72, and 73 –
(a) “chargeable trust income”, in relation to a year of income, means:–
(i) the gross income of the trust (other than an amount to which
Section 72(1) or 73(1) applies) for that year calculated as if the trust
is a resident taxpayer; less
(ii) the total amount of deductions allowed under this Act for
expenditures or losses incurred by the trust in deriving that income;
(b) “non-resident trust”, in relation to a year of income, means a trust that is

not a resident trust for that year;
(c) “qualified beneficiary” means a person referred to in paragraph (d)(i) or

(ii) of this Section of the definition of “qualified beneficiary trust”;
(d) “qualified beneficiary trust” means –
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(i) a trust in relation to which a person, other than a settlor, has a

power solely exercisable by that person to vest the corpus or
income of the trust in that person; or
(ii) a trust whose sole beneficiary is an individual or an individual’s

estate or appointees,
but does not include a trust whose beneficiary is an incapacitated

person;
(e) “settlor” means a person who has transferred property to, or conferred a
benefit on, a trust for no consideration or for a consideration which is
Inserted by less than the market value of the property transferred or benefit
IT (Am) Act 2002
conferred at the date of the transfer or conferral; and
(f) “settlor trust” means a trust in relation to a whole or part of which, the
settlor has –
(i) the power to revoke or alter the trust so as to acquire a beneficial

entitlement in the corpus or income of the trust; or
(ii) a reversionary interest in the corpus or income of the trust.
71. Principles of Taxation for Trusts
(1) Subject to subsection (5), the income of a trust is taxed either to the
trustee or to the beneficiaries of the trust, as provided in this Act.
(2) Separate calculations of chargeable trust income shall be made for

separate trusts regardless of whether they have the same trustee.
(3) Income derived, or expenditure or losses incurred by a trust retain their

character as to geographic source and type of income, expenditure, or
loss in the hands of the beneficiary.
(4) A trust is required to furnish a trust return of income in accordance with

Section 92.
(5) A settlor trust or a qualified beneficiary trust –
(a) is not treated as an entity separate from the settlor or qualified

beneficiary, respectively; and
- 75 -
(b) the income of such a trust is taxed to the settlor or qualified

beneficiary and the property owned by the trust is deemed to be
owned by the settlor or qualified beneficiary, as the case may be.
(6) The trustee of an incapacitated person’s trust is liable for tax on the
chargeable trust income of the trust.
(7) Trustees are jointly and severally liable for a tax liability arising in
respect of chargeable trust income that is not satisfied out of the assets
of the trust.
(8) Where a trustee has paid tax on the chargeable trust income of the trust
under Sections 72 or 73, that income shall not be taxed again in the
hands of the beneficiary.
72. Taxation of Trustees and Beneficiaries
(1) Any amount derived by a trustee for the immediate or future benefit of
any ascertained beneficiary, other than an incapacitated person, with a
vested right to such amount is treated as having been derived by the
beneficiary for the purposes of this Act.
(2) Where a beneficiary has acquired a vested right to any amount referred
to in subsection (1) as a result of the exercise by the trustee of a
discretion vested in the trustee under a deed of trust, an arrangement, or
a will of a deceased person, such amount is deemed to have been
derived by the trustee for the immediate benefit of the beneficiary.
(3) For subsection (2) to apply to a beneficiary for a year of income, a

trustee must have exercised the discretion by the end of the second
month after the end of the year of income.
(4) Where subsections (1) or (2) applies, the beneficiary is treated as having
derived the amount at the time the amount was derived by the trustee.
(5) Where any amount to which subsection (1) applies is included in the
gross income of the beneficiary for a year of income, the beneficiary
shall be allowed a deduction in accordance with this Act for any
expenditure or losses incurred in that year by the trustee in deriving that
income.
(6) A trustee of a trust that is a resident trust for a year of income is liable
for tax on the chargeable trust income of the trust for that year.
- 76 -
(7) A trustee of a trust that is a non-resident trust for a year of income is

liable for tax on so much of the chargeable trust income of the trust for
that year as is attributable to sources in Uganda.
(8) This Section is subject to Section 73.
73. Taxation of Estates of Deceased Persons
(1) Any amount derived by a trustee as executor of the estate of a deceased

person shall, to the extent that the Commissioner is satisfied that such
amount has been derived for the immediate or future benefit of any
ascertained heir or legatee of the deceased, be treated as having been
derived by such heir or legatee for the purposes of this Act.
(2) Where any amount to which subsection (1) applies is included in the
gross income of the heir or legatee for a year of income, the heir or
legatee shall be allowed a deduction in accordance with this Act for any
expenditure or losses incurred in that year by the trustee in deriving that
income.
(3) The trustee of an estate of a deceased person that is a resident trust for a
year of income is liable for tax on the chargeable trust income of the
estate for that year.
(4) The trustee of an estate of a deceased person that is a non- resident trust
for a year of income is liable for tax on so much of the chargeable trust
income of that year attributable to sources in Uganda.
(5) The trustee of an estate of a deceased person is responsible for the tax
liability of the deceased taxpayer arising for any year of income prior to
the year of income in which the taxpayer died.
Taxation of Companies and Shareholders
74. Principles of Taxation for Companies
(1) A company is liable to tax separately from its shareholders.
(2) Subject to subsection (3), a dividend paid to a resident company, other

than an exempt organisation, by another resident company is exempt
from tax where the company receiving the dividend controls, directly or
indirectly, twenty-five per cent or more of the voting power in the
company paying the dividend.
- 77 -
(3) Subsection (2) does not apply to –
(a) a dividend paid to a financial institution by virtue of its ownership

of redeemable shares in the company paying the dividend; or
(b) a dividend to which Section 76 applies.
75. Change in Control of Companies
Where, during a year of income, there has been a change of fifty per cent or
more in the underlying ownership of a company, as compared with its
ownership one year previously, the company is not permitted to deduct an
assessed loss in the year of income or in subsequent years, unless the
company, for a period of two years after the change or until the assessed loss
has been exhausted if that occurs within two years after the change –
(a) continues to carry on the same business after the change as it carried on
before the change; and
(b) does not engage in any new business or investment after the change,
where the primary purpose of the company or the beneficial owners of
the company is to utilise the assessed loss so as to reduce the tax
payable on the income arising from the new business or investment.
76. Dividend Stripping
(1) Where a company takes part in a transaction in the nature of dividend

stripping and receives a dividend from a resident company in the
transaction, the company receiving the dividend shall include the
dividend in its gross income to the extent to which the Commissioner
considers necessary to offset any decrease in the value of shares in
respect of which the dividend is paid or in the value of any other
property caused by the payment of the dividend.
(2) In any such transaction, the Commissioner may also reduce the amount
of any deduction arising to the extent to which it represents the decrease
in value of the shares or other property.
(3) In this Section, “dividend stripping” includes an arrangement under

which –
(a) a company, referred to as the “target company”, has accumulated

or current-year profits, or both, represented by cash or other
readily realisable assets;
- 78 -
(b) another company, referred to as the “acquiring company”,

acquires the shares in the target company for an amount that
reflects the profits of the target company;
(c) the disposal of the shares in the target company gives rise to a tax-
free capital gain to the shareholders in the target company;
(d) after the acquiring company has acquired the shares in the target
company, the target company pays a dividend to the acquiring
company, which in the absence of Section 74(3)(b) would be
exempt from tax in the hands of the target company; and
(e) after the dividend is declared, the acquiring company sells the
shares for a loss.
77. Roll-Over Relief
(1) Where a resident person, in this subsection referred to as the

“transferor”, transfers a business asset, with or without any liability not
in excess of the cost base of the asset, to a resident company other than
an exempt organisation, in this subsection referred to as the
“transferee”, in exchange for a share in the transferee and the transferor
has a fifty per cent or greater interest in the voting power of the
transferee immediately after the transfer –
(a) the transfer is not treated as a disposal of the asset by the transferor
but is treated as the acquisition by the transferee of a business
asset;
(b) the transferee’s cost base for the asset is equal to the transferor’s
cost base for the asset at the time of transfer; and
(c) the cost base of a share received by the transferor in exchange for
the asset is equal to the cost base of the asset transferred, less any
liability assumed by the transferor in respect of the asset.
(2) Where, as part of the liquidation of a resident company, in this

subsection referred to as the “liquidated company”, a business asset is
transferred to a shareholder being a resident company other than an
exempt organisation, in this subsection referred to as the “transferee
company”, and, immediately prior to the transfer, the transferee
company held a fifty per cent or greater interest in the voting power of
the liquidated company:
- 79 -
(a) the transfer is not treated as a disposal of the asset by the liquidated
company, but is treated as the acquisition of a business asset by the
transferee company;
(b) the transferee’s cost base for the asset is equal to the liquidated
company’s cost base for the asset at the time of transfer;
(c) the transfer of the asset is not a dividend; and
(d) no gain or loss is taken into account on the cancellation of the

transferee’s shares in the liquidated company.
(3) Where a resident company or a group of resident companies is

reorganised without any significant change in the underlying ownership
or control of the company or group, the Commissioner may –
(a) permit any resident company involved in the reorganisation to

treat the reorganisation as not giving rise to the disposal of any
business asset or the realisation of any business debt, as the case
may be; and
(b) determine the cost base of any business asset held, or business debt
undertaken, by the resident company after the reorganisation in
order to reflect the fact that no disposal or realisation is treated as
having occurred.
(4) For purposes of this section reorganisation means –
(a) a transaction in which a company transfers its assets to another

4 & 5 inserted by
IT (Am) Act 2015 company that is controlled by the transferor or its shareholders
following which the stock of the transferee is distributed; or
(b) a transaction in which a person whether for payment or not is

allotted shares in or debentures of a company in respect of and in
proportion to, or as nearly as may be in proportion to, their
holdings of shares in the company and in any case which there is
more than one class of shares and the rights attached to shares of
any class are altered;
(c) a merger or amalgamation where all or substantially all the assets

and liabilities of one or more transferor companies are transferred
to a single transferee company, whereby the transferor company
cease to exist by operation of law;
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(d) a transaction i n which two or more companies transfer their

assets and liabilities to a single newly established company;
(e) corporate division; through which all or substantially all the

assets of one company are transferred in exchange for shares to at
least two or more newly established or pre-existing companies,
except where the assets are already in the hands of a subsidiary;
(5) For the avoidance of doubt, a sale of a share from one person to
another does not constitute a re-organization for the purposes of this
Act.
PART IX – INTERNATIONAL TAXATION
78. Interpretation of Part IX
In this Part,
(a) “branch” means a place where a person carries on business, and

includes:–
(i) a place where a person is carrying on business through an agent,

other than a general agent of independent status acting in the
ordinary course of business as such;
Inserted by
(ii) a place where a person has, is using, or is installing substantial
IT (Am) Act 2011 equipment or substantial machinery for ninety days or more; [or]
(iii) a place where a person is engaged in a construction, assembly, or

installation project for ninety days or more, including a place
where a person is conducting supervisory activities in relation to
such a project; or [and]
(iv) the furnishing of services, including consultancy services, by a

person through employees or other personnel engaged by the
(iv), (aa) & (c)
person for such purpose, but only if activities of that nature
Inserted by
IT (Am) Act 2015
continue for the same or a connected project for a period
aggregating more than ninety days in any twelve- month period.
(aa) “immovable property” includes a mining right, petroleum right,

mining information, or petroleum information;
- 81 -
(b) “management charge” means any payment made to any person, other
than a payment of employment income, as consideration for any
managerial services, however calculated.
(c) “mining information”, “mining right”, “petroleum information”, and

“petroleum right” have the meanings in section 89A.”
79. Source of Income
Income is derived from sources in Uganda to the extent to which it is:
(a) derived from the sale of goods –
(i) in the case of goods manufactured, grown, or mined by the seller,

the goods were manufactured, grown, or mined in Uganda; or
(ii) in the case of goods purchased by the seller, the agreement for sale
was made in Uganda, wherever such goods are to be delivered.
(i) derived by a resident person in carrying on a business except to the

Substituted by
extent that it is attributable to a business carried on by the person
IT (Am) Act 2015 through a branch outside Uganda;
(ii) derived by a non-resident person in carrying on a business through

a branch in Uganda;
(b) derived by a resident person in carrying on a business as owner or

chatterer of a vehicle, ship, or aircraft, wherever such vehicle, ship, or
aircraft may be operated;
(c) derived from any employment exercised or services rendered in Uganda.
(c) employment income or a fee for the provision of services –
Substituted by (i) derived from employment or services exercised or rendered in

IT (Am) Act 2015 Uganda;
(ii) paid by a resident person, other than as an expenditure of a

business carried on by a person outside Uganda through a branch;
or
(iii) paid by non-resident person as an expenditure of a business carried

on by a person through a branch in Uganda;
- 82 -
(d) derived in respect of any employment exercised or services rendered

Repealed by
under a contract with the Government of Uganda, wherever the
IT (Am) Act 2015 employment is exercised or services are rendered;
(e) derived by a resident individual from any employment exercised or

services rendered as a driver of a vehicle, or an officer or member of a
crew of any vehicle, ship, or aircraft, wherever the vehicle, ship, or
aircraft may be operated;
(f) derived from the rental of immovable property located in Uganda;
(g) derived from the disposal of an interest in immovable property located

in Uganda or from the disposal of a share in a company the property of
which consists directly or indirectly principally of an interest or interests
in such immovable property, where the interest or share is a business
asset;
(h) derived from the disposal of movable property, other than goods, under
an agreement made in Uganda for the sale of the property, wherever the
property is to be delivered;
(i) an amount –
(i) included in the business income of a taxpayer under Section 27(5)

in respect of the disposal of a depreciable asset used in Uganda; or
(ii) treated as income under Section 62, where the deduction was
allowed for an expenditure, loss, or bad debt incurred in the
production of income sourced in Uganda;
(j) a royalty –
Substituted by
IT (Am) Act 2002 (i) paid by a resident person, other than as an expenditure of a
and IT (Am) Act 2011
business carried on by the person outside Uganda through a
branch;
(ii) paid by a non-resident person as an expenditure of a business

carried on by the person through a branch in Uganda; or
(iii) arising from the disposal of industrial or intellectual property used

in Uganda.
(k) interest where –
- 83 -
(i) the debt obligation giving rise to the interest is secured by

immovable property located, or movable property used, in Uganda;
(ii) the payer is a resident person; or
(iii) the borrowing relates to a business carried on in Uganda;
(l) a dividend or director’s fee paid by a resident company;
(m) a pension or annuity where –
(i) the pension or annuity is paid by the Government of Uganda or by

a resident person; or
(ii) the pension or annuity is paid in respect of an employment

exercised or services rendered in Uganda;
(n) a natural resource payment in respect of a natural resource taken from

Uganda;
(o) a foreign currency debt gain derived in relation to a business debt which
has arisen in the course of carrying on a business in Uganda;
(p) a contribution to a retirement fund made by a tax-exempt employer in

respect of an employee whose employment is exercised in Uganda;
Inserted by
(q) a management charge paid by a resident person; or IT (Am) Act 2015
(r) taxable in Uganda under an international agreement; or
(s) attributable to any other activity which occurs in Uganda, including an

activity conducted through a branch in Uganda.
80. Foreign Employment Income
(1) Foreign-source employment income derived by a resident individual is

exempt from tax if the individual has paid foreign income tax in respect
of the income.
(2) A resident individual is treated as having paid foreign income tax on

foreign-source employment income if tax has been withheld and paid to
the revenue authority of the foreign country by the employer of the
individual.
- 84 -
81. Foreign Tax Credit
(1) A resident taxpayer is entitled to a credit, in this Section referred to as a

“foreign tax credit”, for any foreign income tax paid by the taxpayer in
respect of foreign-source income included in the gross income of the
taxpayer.
(2) The amount of the foreign tax credit of a taxpayer for a year of income
shall not exceed the Ugandan income tax payable on the taxpayer’s
Substituted by
IT (Am) Act 2002 foreign-source income for that year, calculated by applying the average
rate of Ugandan income tax of the taxpayer for that year to the
taxpayer’s net foreign-source income for that year.
(3) The calculation of the foreign tax credit of a taxpayer for a year of
income is made separately for foreign-source business income and other
income derived from foreign sources by the taxpayer during the year.
(4) Foreign income tax paid by –
(a) a partnership is treated as paid by the partners;
(b) a trustee is treated as paid by the beneficiary where the income on

which foreign income tax has been paid is included in the gross
income of the beneficiary under this Act; or
(c) a beneficiary is treated as paid by the trustee where the income on

which foreign income tax has been paid is taxed to the trustee
under this Act.
(5) For the purposes of this Section,
(a) “average rate of Ugandan income tax”, in relation to a taxpayer

for a year of income, means the percentage that the Ugandan
income tax, before the foreign tax credit, is of the chargeable
income of the taxpayer for the year and, in the case of a taxpayer
with both foreign-source business income and other income
derived from foreign sources, the average rate of tax is to be
calculated separately for both classes of income;
(b) “foreign income tax” includes a foreign withholding tax, but does
not include a foreign tax designed to raise the level of the tax on
the income so that the taxation by the country of residence is
reduced; and
- 85 -
(c) “net foreign-source income” means the total foreign-source income

included in the gross income of the taxpayer, less any deductions
allowed to the taxpayer under this Act that –
(i) relate exclusively to the derivation of the foreign-source

income; and
(ii) in the opinion of the Commissioner, may appropriately be

related to the foreign-source income.
82. Taxation of Branch Profits
(1) A tax shall be charged for each year of income and is imposed on every
non-resident company carrying on business in Uganda through a
branch which has repatriated income for the year of income.
(2) The tax payable by a non-resident company under this Section is

calculated by applying the rate prescribed in Part IV of the Third
Schedule to this Act to the repatriated income of the branch of the non-
resident company for the year of income.
(3) The repatriated income of a branch for a year of income is calculated

according to the following formula –
A + (B – C) – D
where –
A is the total cost base of assets, net of liabilities, of the branch

at the commencement of the year of income;
B is the net profit of the branch for the year of income

calculated in accordance with generally accepted accounting
principles;
C is the Ugandan tax payable on the chargeable income of the

branch for the year of income; and
D is the total cost base of assets, net of liabilities, of the branch

at the end of the year of income.
(4) In calculating the repatriated income of a branch, the total cost base of
assets at the end of a year of income is the total cost base of assets at the
commencement of the next year of income.
- 86 -
(5) The tax imposed under this Section is in addition to any tax imposed by
Inserted by this Act on the chargeable income of the branch under section 4, but is
IT (Am) Act 2002
otherwise treated for all purposes of this Act as a tax on chargeable income.
83. Tax on International Payments
(1) Subject to this Act, a tax is imposed on every non-resident person who
Inserted by derives any dividend, interest, royalty, rent, natural resource payment,
IT (Am) Act 2002
or management charge from sources in Uganda.
(2) The tax payable by a non-resident person under this Section is

Substituted by
IT (Am) Act 2016 Schedule to this Act to the gross amount of the dividend, interest,
royalty, rent, natural resource payment, or management charge derived
by a non-resident person.
(3) Notwithstanding Section 79(l), a dividend derived by a non-resident

person is only treated as income derived from sources in Uganda for the
purposes of this Section to the extent to which the dividend is paid out
of profits sourced in Uganda.
(4) For the purposes of subsection (3), where a resident company has
profits sourced both within and outside Uganda, the company is treated
as having paid a dividend out of the profits sourced in Uganda first.
(5) Interest paid by a resident company in respect of debentures is exempt

from tax under this Act where the following conditions are satisfied –
Substituted by
IT (Am) Act 2002
(a) the debentures were issued by the company outside Uganda for the
& IT (Am) Act 2006 purpose of raising a loan outside Uganda;
(b) the debentures were widely issued for the purpose of raising funds
Inserted by
for use by the company in a business carried on in Uganda or the
IT (Am) Act 2006 interest is paid to a bank or a financial institution of a public character;
and
(c) the interest is paid outside Uganda.
(6) Subsection (1) does not apply to an amount attributable to the activities
Inserted by of a branch of the non-resident in Uganda and such amount is subject to
IT (Am) Act 2002 the operation of Section 17.
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84. Tax on payments to Non-Resident Public Entertainers or Sports

Persons
(1) Subject to this Act, a tax is imposed on every non-resident entertainer,

sports person, or theatrical, musical, or other group of non-resident
entertainers or sports persons who derive income from any performance
in Uganda.

Schedule to this Act to the gross amount of –
(a) remuneration derived by a non-resident public entertainer or sports

person; or
(b) receipts derived by any theatrical, musical, or other group of non-

resident public entertainers or sports persons.
(3) Tax is imposed under this Section on any group regardless of whether
or not the performance is conducted for the joint account of all or some
members of the group.
(4) Every member of a group shall be jointly and severally liable for
Inserted by payment of the tax imposed under this Section and, subject to Section
IT (Am) Act 2002 87(1)(c) , shall remit to the Commissioner the tax due before leaving
Uganda.
85. Tax on Payments to Non-Resident Contractors or Professionals
(1) Subject to this Act, a tax is imposed on every non-resident person

deriving income under a Ugandan-source services contract.

Schedule to this Act to the gross amount of any payment to a non-
resident under a Ugandan- source services contract.
(3) Subsection (1) does not apply to a royalty or management charge

charged to tax under Section 83.
(4) In this Section, “Ugandan-source services contract” means a contract,

other than an employment contract, under which –
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(a) the principal purpose of the contract is the performance of services

which gives rise to income sourced in Uganda; and
(b) any goods supplied are only incidental to that purpose.
86. Taxation of Non-Residents providing Shipping, Air Transport or

Tele-communications Services in Uganda
(1) Subject to this Act, a tax is imposed on every non-resident person

carrying on the business of ship operator, charterer, or air transport
operator who derives income from the carriage of passengers who
Inserted by
embark, or cargo or mail which is embarked in Uganda and on a road
IT (Am) Act 2002 transport operator who derives income from the carriage of cargo or mail which
is embarked in Uganda.
(2) The tax payable by a non-resident person under subsection (1) is

calculated by applying the rate of tax prescribed in Part VII of the Third
Inserted by
IT (Am) Act 2002
Schedule to this Act to the gross amount derived by the person from the
carriage and is treated for all purposes of the Act as a tax on chargeable income.
(3) Subsection (1) does not apply to any income derived from the carriage
of passengers who embark, or cargo or mail which is embarked, solely
as a result of trans-shipment.
(4) Where a non-resident person carries on the business of transmitting

messages by cable, radio, optical fibre, or satellite communication, or
the business of providing internet connectivity services, the tax payable by the
Inserted by
IT (Am) Act 2006
person shall be five per cent of the gross amount derived by the person
and substituted by
IT (Am) Act 1 2008
in respect of –
& IT (Am) Act 2011
(a) the transmission of messages by apparatus established in Uganda;
(b) the provision of direct-to-home pay services to subscribers in

Uganda; or
(c) the provision of internet connectivity services to subscribers in Uganda.
87. General Provisions relating to Taxes imposed under Sections 83, 84,
85 and 86
(1) The tax imposed on a non-resident person under Sections 83, 84, 85,
86(1) and 86(4) is a final tax on the income on which the tax has been
imposed and –
- 89 -
Substituted by (a) that income is not included in the gross income of the non-resident
IT (Am) Act 1 2008
person who derives the income;
(b) no deduction is allowed for any expenditure or losses incurred by

the non-resident person in deriving that income; and
(c) the liability of the non-resident person is satisfied if the tax payable
has been withheld by a withholding agent under Section 120 and
paid to the Commissioner under Section 123.
(2) In this Section, “withholding agent” has the meaning in Section 115.
88. International Agreements
(1) An international agreement entered into between the Government of

Uganda and the government of a foreign country or foreign countries
shall have effect as if the agreement was contained in this Act.
(2) To the extent that the terms of an international agreement to which

Uganda is a party are inconsistent with the provisions of this Act, apart
from subsection (5) of this Section and Part X which deals with tax
Substituted by avoidance, or any other law of Uganda dealing with matters covered by this
IT (Am) Act 2014
agreement, the terms of the international agreement prevail over the
provisions of this Act and any other law of Uganda dealing with matters
covered by this agreement.
(3) Where an international agreement provides for reciprocal assistance in

the collection of taxes and the Commissioner has received a request
from the competent authority of another country pursuant to that
agreement for the collection from any person in Uganda of an amount
due by that person under the income tax laws of that other country, the
Commissioner may, by notice in writing, require the person to pay the
amount to the Commissioner by the date specified in the notice for
transmission to the competent authority of that other country.
(4) If a person fails to comply with a notice under subsection (3), the
amount in question may be recovered for transmission to the competent
authority of that other country as if it were tax payable by the person
under this Act.
(5) Except for a public listed company, where an international agreement

concluded by the Government of Uganda with another contracting state
Substituted by
IT (Am) Act 2016
provides that income derived by a person resident in such other contracting
state from sources in Uganda is exempt from Ugandan tax or is subject
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Substituted by to a reduction in the rate of, [the application of the treaty results in a reduction
IT (Am) Act 2011
in] Ugandan tax, the benefit of that exemption or reduction shall not be
[is not] available to any person who – [for the purposes of the
agreement, is a resident of the other contracting state where fifty per
cent or more of the underlying ownership of that person is held by an
individual or individuals who are not residents of that other Contracting
state for the purposes of the agreement]
(a) receives the income in a capacity which is other than that of a beneficial
owner, within the meaning accorded to that term by the relevant
international agreement, and who does not have full and unrestricted
ability to enjoy that income and to determine its future uses; and
(b) does not possess economic substance in the country of residence.
(6) In this Section, “international agreement” means –
(a) an agreement with a foreign government providing for the relief of

international double taxation and the prevention of fiscal evasion;
or
(b) a bilateral or multilateral agreement with a foreign government or

foreign governments or foreign organisation providing for
Substituted by
IT (Am) Act 2014 administrative assistance in tax matters. [an agreement with a
foreign government providing for reciprocal administrative
assistance in the enforcement of tax liabilities]
89 Substituted by
89. Thin Capitalisation IT (Am) Act 2015
(1) Where a foreign-controlled resident company which is not a financial

institution has a foreign debt-to-foreign equity ratio in excess of 1 [2] to
Substituted by 1 at any time during a year of income, a deduction is disallowed for the
IT (Am) Act 2014
interest paid by the company during that year on that part of the debt
which exceeds the 1 [2] to 1 ratio.
(a) “foreign-controlled resident company” means a resident company

in which fifty per cent or more of the underlying ownership or
control of the company is held by a non-resident person, in this
Section referred to as the “foreign controller”, either alone or
together with an associate or associates;
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(b) “foreign debt”, in relation to a foreign-controlled resident

company, means the greatest amount, at any time during a year of
income, of the sum of –
(i) the balance outstanding at that time on any debt obligation

owed by the foreign-controlled resident company to a foreign
controller or non-resident associate of the foreign controller
on which interest is payable which interest is deductible to
the foreign-controlled resident company and is not included
in the gross income of the foreign controller or associate; and
(ii) the balance outstanding at that time on any debt obligation

owed by the foreign-controlled resident company to a person
other than the foreign controller or an associate of the foreign
controller where that person has a balance outstanding of a
similar amount on a debt obligation owed by the person to
the foreign controller or a non-resident associate of the
foreign controller; and
(c) “foreign equity”, in relation to a foreign-controlled resident

company and for a year of income, means the sum of the following
amounts –
(i) the paid-up value of all shares in the company owned by the
foreign controller or a non-resident associate of the foreign
controller at the beginning of the year of income;
(ii) so much of the amount standing to the credit of the share

premium account of the company at the beginning of the
year of income as the foreign controller or a non-resident
associate would be entitled if the company were wound up
at that time; and
(iii) so much of the accumulated profits and asset revaluation

reserves of the company at the beginning of the year of
income as the foreign controller or a non-resident associate
of the foreign controller would be entitled if the company
were wound up at that time;
reduced by the sum of –
(iv) the balance outstanding at the beginning of the year of

income on any debt obligation owed to the foreign-
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controlled resident company by the foreign controller or a

non-resident associate of the foreign controller; and
(v) where the foreign-controlled resident company has

accumulated losses at the beginning of the year of income,
the amount by which the return of capital to the foreign
controller or non-resident associate of the foreign controller
would be reduced by virtue of the losses if the company
were wound up at that time.
(1) Subject to subsection (2), where a foreign-controlled resident company,

other than a financial institution, has a debt-to-equity ratio in excess of
1.5 to 1 at any time during a year of income, a deduction is disallowed
for the interest paid by the company during that year on that part of the
debt that exceeds the 1.5 to 1 ratio for the period the ratio was
exceeded.
(2) If the debt-to-equity ratio of a foreign-controlled resident company

exceeds 1.5 to 1 for a year of income, subsection (1) does not apply if, at
all times during the year, the amount of the debt of the company does
not exceed the arm’s length debt amount.
(3) This section applies to a non-resident company with a branch in

Uganda on the basis of the following –
(a) the branch is treated as a foreign-controlled resident company;

and
(b) the debt-to-equity ratio of the branch is computed by reference to:
(i) the debt obligations of the non-resident company

attributable to the branch; and
(ii) the equity of the non-resident company attributable to

the operations of the company conducted through the
branch.
(4) For purposes of this section –
“arm’s length debt amount”, in relation to a foreign controlled

resident company, means the amount of debt that a financial
institution that is not related to the company would be prepared to lend
to the company having regard to all the circumstances of the company;
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“debt”, in relation to a foreign-controlled resident company, means the

greatest amount, at any time during a year of income, of the debt
obligations of the company on which interest is payable as determined
according to International Financial Reporting Standards;
“debt obligation” means an obligation to make a repayment of money

to another person, including obligations arising under promissory
notes, bills of exchange, and bonds, but not including accounts payable
or a debt obligation on which no interest is payable;
“equity”, in relation to a foreign-controlled resident company, means

the greatest amount, at any time during a year of income, of the equity
of the company as determined according to International Financial
Reporting Standards and includes a debt obligation on which no
interest is payable; and
“foreign-controlled resident company” means a resident company in

which more than fifty per cent of the underlying ownership or control
of the company is held by a non-resident person either alone or
together with an associate or associates.
PART IX A – SPECIAL PROVISIONS FOR THE TAXATION OF

Part IXA inserted by PETROLEUM OPERATIONS
IT (Am) Act 2 2008 W.E.F 1/7/1997
89A. Interpretation
(1) In this Part, unless the context otherwise requires –

Ss. 89A – 89G
Substituted by “commercial production” means –
IT (Am) Act 2015
Ss. 89G – 89GG
Inserted by
IT (Am) Act 2015
(a) for mining operations, the first period of thirty (30) consecutive
days during which the average level of production of the twenty
five (25) highest production days in the thirty-day period reaches
a production level deemed to be commercial as determined by
the Minister responsible for mining operations;
(b) for petroleum operations, the production of crude oil or natural

gas, or both, and delivery of the crude oil or natural gas at the
delivery point under a program of regular production and sale.
“contract area” means an exploration area which is a subject of a

petroleum agreement, or a development area, as the case may be;
“contractor” means a person supplying services or goods other than as
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an employee, to the following –
(a) a licensee in respect of mining operations undertaken by the

licensee;
(b) a licensee in respect of petroleum operations undertaken by the

licensee;”.
“delivery point” means the point at which petroleum passes through

the intake valve of the pipeline, vessel, vehicle or craft at a terminal or
refinery in Uganda;
“farm-out agreement” is an agreement to which section 89GE

applies;
“gross income of a licensee” includes cost oil, licensee's share of profit

oil and any credits earned by the licensee from petroleum operations;
“licence area” means the area that is the subject of a mining right;
“licensee” means a person who has been granted a mining right or a

person with whom the Government has entered into a petroleum
Substituted by
IT (Am) Act 2016 agreement as defined in the Petroleum (Exploration, Development and
Production) Act, 2013 or a person licensed under the Petroleum (Refining,
Conversion, Transmission and Midstream) Act, 2013;
“Mining Act” means the Mining Act, 2003;
“mining exploration expenditure” means expenditure incurred by a

licensee in undertaking mining exploration operations, and includes
the following –
(a) expenditure incurred in acquiring –
(i) an interest in a mining exploration right from the

Government or under a farm-out agreement; or
(ii) Mining exploration information from the Government or

under a farm-out agreement;
(b) Social infrastructure expenditure incurred in accordance with a

mining exploration right;
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(c) expenditure incurred to acquire a depreciable asset that is

first used in mining exploration operations;
“mining extraction expenditure” means capital expenditure incurred

by a licensee in undertaking operations authorised under a mining
lease, other than expenditure incurred to acquire a depreciable asset,
and includes the following –
(a) expenditure whenever incurred in acquiring –
(i) an interest in a mining right, other than an interest referred

to in paragraph (a)(i) of the definition of “mining exploration
expenditure”; or
(ii) mining information, other than information referred to in

paragraph (a)(ii) of the definition of “mining exploration
expenditure;
(b) Social infrastructure expenditure incurred in accordance with a

mining lease;
“mining exploration information” means information relating to the

search for minerals under a mining exploration right;
“mining exploration operations” means authorised operations under

a mining exploration right;
“mining exploration right” means an exploration or retention licence

granted under the Mining Act;
“mining extraction operations” means authorised operations under a

mining lease;
“mining exploration right” means a prospecting, exploration, or

retention licence;
“mining information” means information relating to mining

operations;
“mining operations” means authorised operations under a mining

right;
“mining revenues” means signature and other bonuses, surface rentals,

royalties, and any other duties or fees payable to the Government
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under the Mining Act or a mining right granted under that Act;
“mining right” means a mining exploration right, or a mining lease;
“non-resident associate”, in relation to a licensee, means an associate

of the licensee that is a non-resident person;
“non-resident contractor” means a contractor that is not a resident

person;
“participation dividend” in relation to a resident licensee, means a

dividend paid by the licensee to a non-resident company that has a
10% or greater voting interest in the voting power of the licensee;
“petroleum agreement”, means an agreement entered into by the

Government of Uganda with another person in accordance with the
Petroleum (Exploration, Development and Production) Act, 2013, or
the Petroleum (Refining, Conversion, Transmission and Midstream
Storage) Act 2013;
“petroleum development expenditure” means expenditure incurred by

a licensee in undertaking exploration operations authorised under a
petroleum production rights;
“petroleum development operations” means authorised operations

under a petroleum production licence;
“petroleum exploration expenditure” means expenditure incurred by a

licensee in undertaking exploration operations authorized under a
petroleum exploration right;
Repealed by “petroleum exploration information” means information relating to

IT (Am) Act 2016
the search for petroleum under a petroleum exploration right;
“petroleum exploration operations” means an authorised operation

under a petroleum exploration right;
“petroleum exploration right” means a reconnaissance permit or

petroleum exploration licence;
“petroleum operation” means a petroleum activity as defined in the

Petroleum (Exploration, Development and Production) Act;
“petroleum revenues” has the meaning assigned to it in section 3 of the
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Public Finance Management Act, 2015;
“petroleum right” means a reconnaissance permit, petroleum

exploration right, or a petroleum production licence;
“prescribed licensee” means –
(a) a person who has been granted a mining right and, in respect
of whom, the Commissioner has notified in writing to be a
prescribed licensee; or
(b) a person with whom the Government has entered into a

petroleum agreement.
“resident licensee” means a licensee that is a resident company;
“service fee” includes an amount treated as a royalty in section

2(mmm)(i)(E);
“social infrastructure expenditure” means capital expenditure that a

licensee is required to incur under a mining right or petroleum
agreement on the construction of a public school, public hospital,
public road, or similar social infrastructure.
(2) Unless the context otherwise requires, any term that is not defined in
this Act but is defined in the Mining Act, 2003 or the Petroleum
(Exploration, Development and Production) Act, 2013 as the case
may be, has the same meaning as in the Mining Act or Petroleum
(Exploration, Development and Production) Act, 2013.
(3) If more than one person has signed a petroleum agreement, each person
is treated as a licensee for the purposes of this Part.
(4) An amount is not treated as “mining exploration expenditure”,

“mining extraction expenditure”, “petroleum exploration
expenditure”, or “petroleum development expenditure” to the extent
that the amount is not allowed as a deduction under section 22(3) or
23.
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Mining Operations
89B. Taxation of Mining Licenses
(1) This Act applies to a licensee in relation to mining operations subject to

the modifications in this Part.
(2) Where there is any inconsistency in the taxation of a licensee referred to

in subsection (1), between this Part, other parts of this Act and any
agreement, the provisions of this Part shall prevail.
(3) The rate of income tax applicable to a licensee in respect of mining

operations is the rate specified under paragraph 1 of Part IX of the
Third Schedule.
89C. Limitations on Deductions relating to Mining Operations
(1) Subject to subsection (5), an amount that a licensee may deduct under
this Act in relation to mining operations undertaken by the licensee in
a licence area in a year of income shall be allowed as a deduction
only against the gross income derived by the licensee from the
operations in the licence area for that year.
(2) If an amount allowed as a deduction relates partly to mining operations

in a licence area and partly to mining operations in another licence area
or to some other activity, the deduction shall be apportioned
accordingly.
(3) If, in any year of income, the total deductions of a licensee in relation to
mining operations undertaken in a licence area exceeds the total gross
income arising from those operations in the licence area, the excess is
carried forward to the following year of income and shall be deducted
in that year against gross income arising from the mining operations in
the licence area, until the excess is fully deducted or the mining
operations in the licence area cease.
(4) If a licensee has a loss carried forward for a licence area under
subsection (3) for more than one year of income, the loss of the earliest
year shall be allowed as a first deduction.
(5) In this section, the licence area for a mining lease includes the area of a
mining exploration right provided the licence area for the mining lease
is wholly within the area covered by the mining exploration right.
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89D. Mining Exploration Expenditure
(1) If the cost of acquiring a depreciable asset is treated as mining

exploration expenditure, section 27 applies to the asset on the following
basis –
(a) the asset is treated as belonging to a separate pool of depreciable

assets; and
(b) the depreciation rate applicable to the pool is 100%.
(2) If the cost of acquiring an intangible asset is treated as mining

exploration expenditure, section 31 applies to the asset on the basis
that the useful life of the asset is one year.
(3) A licensee shall be allowed a deduction for mining exploration

expenditure to which subsection (1) or (2) do not apply in the year of
income in which the expenditure is incurred.
89E. Mining Extraction Expenditure
(1) Subject to subsection (4), if the cost of acquiring an intangible asset is

mining extraction expenditure, the useful life of the asset is the lesser
of:–
(a) the expected life of the mining extraction operations to which the
asset relates; or
(b) six years.
(2) Subject to subsection (4), a licensee shall be allowed a deduction on a

straight line basis for mining extraction expenditure to which
subsection (1) does not apply over the lesser of –
(a) the expected life of the mining extraction operations to which the
expenditure relates; or
(b) six years.
(3) Subject to subsection (5), if a depreciable asset for use in mining

extraction operations is acquired or constructed by a licensee before the
commencement of commercial production, section 27 applies to the
asset as if it was acquired or constructed at the time of commencement
of commercial production.
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(4) Subject to subsection (5), if mining extraction expenditure is incurred

before the commencement of commercial production, subsection (2) or
section 31, as the case may be, applies to the expenditure as if it was
incurred at the time of commencement of the commercial production.
(5) The amount of a deduction for a depreciable asset referred to in

subsection (3) or a mining extraction expenditure referred to in
subsection (4) for the year of income in which the commencement of
commercial production occurs is computed according to the following
formula –
A x B/C
where –
A is the amount of the cost of the asset or the amount of the

expenditure;
B is the number of days in the period beginning on the date of

commencement of commercial production and ending on the
last day of the year of income in which commercial
production commenced; and
C is the number of days in the year of income in which

commercial production commenced.
(6) If a licensee disposes of an interest in a mining right (other than under a

farm-out agreement), any gain arising on the disposal shall be reduced
by any mining extraction expenditure incurred by the licensee to which
subsection (2) applies that has not been deducted by the licensee at the
time of the disposal.
89F. Rehabilitation Expenditure
(1) A contribution made by a licensee to a rehabilitation fund in accordance

with an approved rehabilitation plan in relation to mining operations
shall be allowed as a deduction in the year of income in which the
contribution was made.
(2) An expenditure incurred by a licensee in carrying out work required by

an approved rehabilitation plan in respect of the licensee’s mining
operations shall be allowed as a deduction in the year of income in
which the expenditure is incurred provided that the work is not paid for,
directly or indirectly, from money made available out of the licensee’s
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rehabilitation fund for the mining operations.
(3) An amount accumulated in a rehabilitation fund, or an amount

withdrawn from a rehabilitation fund to meet expenditure incurred
under an approved rehabilitation plan, shall be exempt income.
(4) The following amounts shall be included in the gross income of a

licensee: –
(a) an amount withdrawn from a rehabilitation fund and returned to

the licensee;
(b) any surplus in a rehabilitation fund of a licensee at the time of

completion of rehabilitation that is returned to the licensee.
“approved rehabilitation plan” means a plan for rehabilitation of a

mine site approved by the Minister responsible for mining operations;
and
“rehabilitation fund” means a fund or account required to be

established under a mining right to provide for the future payment of
remedial work to the licence area covered by the mining right and that
is managed jointly by the licensee and the Minister responsible for
mining operations.
Petroleum Operations
89G. Taxation of Petroleum Licensees
(1) This Act applies to a licensee in relation to a petroleum operation

subject to the modifications in this Part.
(2) Where there is any inconsistency in the taxation of a licensee referred to

in clause (1) between this Part, other parts of this Act, and any
petroleum agreement, the provisions of this Part shall prevail.
(3) The rate of income tax applicable to a licensee in relation to a licensee

in relation to a petroleum operation is the rate specified under
paragraph 2 of Part IX of the Third Schedule.
(4) If a licensee has a loss carried forward for a contract area under
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(5) In this section, a contract area that is a development area includes an

exploration area provided the development area is wholly within the
exploration area.
89GA. Limitations o f Deductions relating to Petroleum Operations
(1) An amount that a licensee may deduct under this Act in relation to a
petroleum operation undertaken by the licensee in a contract area in a
year of income shall be allowed as a deduction only against the gross
income derived by the licensee from the operations in the contract area
for that year.
(2) Where an amount allowed as a deduction relates partly to petroleum

operations in a contract area and partly to petroleum operations in
another contract area or to some other activity, the deduction shall be
apportioned accordingly.
(3) Where, in any year of income, the total deductions of a licensee in

relation to petroleum operations undertaken in a contract area exceeds
the total gross income arising from those operations in the contract area,
the excess shall be carried forward to the following year of income and
shall be deducted in that year against gross income arising from the
petroleum operations in the contract area, until the excess is fully
deducted or the petroleum operations in the contract area cease.
(4) If a licensee has a loss carried forward for a contract area under
(5) In this section, a contract area that is a development area includes an

exploration area provided the development area is wholly within the
exploration area.
(6) In case of a licensee granted a petroleum exploration license after 31st

December 2015, the allowable deductions shall be subject to the
limitations on deductions specified in the Production Sharing
Agreement.
89GB. Petroleum Exploration Expenditure
(1) If the cost of acquiring a depreciable asset is treated as petroleum

exploration expenditure, section 27 applies to the asset on the following
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basis –
(a) the asset is treated as belonging to a separate pool of depreciable

assets; and
(b) the depreciation rate applicable to the pool is 100%.
(2) If the cost of acquiring an intangible asset is treated as petroleum

exploration expenditure, section 31 applies to the asset on the basis that
the intangible asset is amortised at the same rate as the assets of the
petroleum exploration.
(3) A licensee shall be allowed a deduction for petroleum exploration

expenditure to which subsection (1) and (2) do not apply in the year of
income in which the expenditure is incurred.
89GC. Petroleum Development Expenditure
(1) Subject to subsection (4), if the cost of acquiring an intangible asset is

petroleum development expenditure, the useful life of the asset is the
lesser of –
(a) the expected life of the petroleum development operations to

which the asset relates; or
(b) six years.
(2) Subject to subsection (4), a licensee shall be allowed a deduction on a

straight-line basis for petroleum development expenditure to which
subsection (1) does not apply over the lesser of –
(a) the expected life of the petroleum development operations to

which the expenditure relates; or
(b) six years.
(3) Subject to subsection (5), if a depreciable asset for use in petroleum

development operations is acquired or constructed by a licensee before
the commencement of commercial production, section 27 shall apply
to the asset as if it was acquired or constructed at the time of
commencement of the commercial production.
(4) Subject to subsection (5), if petroleum development expenditure is

incurred before the commencement of commercial production,
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subsection (2) or section 27, as the case may be, shall apply to the
expenditure as if it was incurred at the time of commencement of the
commercial production.
(5) The amount of a deduction for a depreciable asset referred to in

subsection (3) or petroleum development expenditure referred to in
subsection (4) for the year of income in which the commencement of
commercial production occurs shall be computed according to the
following formula –
A x B/C
where
A is the amount of the cost of the asset or the amount of the

expenditure;
B is the number of days in the period beginning on the date of

commencement of commercial production and ending on the
last day of the year of income in which commercial
production commenced; and
C is the number of days in the year of income in which the

commercial production commenced.
(6) In this section, “commencement of commercial production” means

the first day of the period of thirty consecutive days during which
production is not less than the level of regular production delivered for
sale as determined by Government as part of the approval of, or
amendment to a development plan, averaged over not less than twenty
five days in the period.
89GD. Decommissioning Expenditure
(1) A contribution made by a licensee to a decommissioning fund in

accordance with an approved decommissioning plan in relation to
petroleum operations shall be allowed as a deduction in the year of
income in which the contribution was made.
(2) An expenditure incurred by a licensee in carrying out work required by

an approved decommissioning plan in respect of the licensee’s
petroleum operations shall be allowed as a deduction in the year of
income in which the expenditure is incurred provided that the work is
not paid for, directly or indirectly, from money made available out of
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the licensee’s decommissioning fund for the petroleum operations.
(3) An amount accumulated in a decommissioning fund, or an amount

withdrawn from a decommissioning fund to meet expenditure incurred
under an approved decommissioning plan, shall be exempt income.
(4) The following amounts are included in the gross income of a licensee –
(a) an amount withdrawn from a decommissioning fund and

returned to the licensee;
Repealed by
(b) any surplus in a decommissioning fund of a licensee at the time of
IT (Am) Act 2016 completion of decommissioning that is returned to the licensee.
“approved decommissioning plan” means a decommissioning plan

approved under the Petroleum (Exploration, Development and
Production) Act; and
“decommissioning fund” means a decommissioning fund established

under an approved decommissioning plan.
Common Rules applicable to Mining and Petroleum Operations
89GE. Farm-Outs
(1) This section shall apply where the following conditions are satisfied–
(a) a licensee (referred to as the “transferor”) has entered into an

agreement (referred to as a “farm-out agreement”) with a
person (referred to as the “transferee”) for the transfer of part of
the interest of the transferor in a mining right or petroleum
agreement;
(b) the consideration given by the transferee for the transferred

interest wholly or partly includes the transferee undertaking
some or all of the work commitments of the transferor in respect
of the part of the interest retained by the transferor.
(2) If this section applies –
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(a) the value of any work undertaken by the transferee in relation to

the part of the interest retained by the transferor shall be included
in –
(i) the consideration received by the transferor for the

transferred interest; or
(ii) the gross income of the transferor; and
(b) the following applies to any amount of money received or

receivable by the transferor for the transferred interest –
(i) section 62 applies to the amount of money on the basis that

it is a recoupment by the transferor of any deductions
allowed for expenditure incurred by the transferor in
respect of the transferred interest;
(ii) if the amount of money exceeds the amount of deducted

expenditure to which section 62 applies, the excess shall be
treated as consideration received for the transferred interest.
89GF. Indirect Transfers of Interest
(1) If there is a change in the underlying ownership of a licensee, the

licensee shall immediately notify the Commissioner, in writing, of the
change.
(2) If the person disposing of the interest to which a notice under

subsection (1) relates is a non-resident person, the licensee shall be
liable, as agent for the non-resident person, for any tax payable under
this Act by the non-resident person in respect of the disposal.
(3) The interest referred to in subsection (2) is a business asset for the
purposes of this Act.
89GG. Taxation of Contractors
(1) Subject to subsection (3), a non-resident contractor who derives a fee

for the provision of services (referred to as a “service fee”) to a licensee
or licensee in respect of mining or petroleum operations is liable to pay
non-resident contractor tax at the rate prescribed in Part IX of the
Third schedule.
(2) The tax payable under subsection (1) shall be computed by applying
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the rate prescribed in Part IX of the Third Schedule to the gross

amount of the service fee.
(3) A licensee paying a service fee to a non-resident contractor that is

subject to non-resident contractor tax shall withhold tax on the gross
amount paid at the rate specified in subsection (1).
(4) A licensee to whom subsection (3) applies shall withhold tax at the
earlier of –
(a) at the time the licensee credits the service fee to the account of
the non-resident contractor; or
(b) at the time that the fee is actually paid.
(5) A non-resident contractor tax imposed under this section shall be a

final tax on the service fee and the fee shall not be included in the gross
income of the contractor.
(6) Sections 123 – 128 of the Act and the Tax Procedures Code Act apply
to a non-resident contractor on the basis that –
(a) the tax is a tax withheld under Part XIII;
(b) the contractor is a payee; and
(c) the licensee is a withholding agent.
(7) This section shall apply as if the associate is a non- resident contractor
providing services to the licensee if the following conditions are
satisfied:–
(a) a non-resident contractor provides services to a licensee;
(b) the service fee is paid to the contractor by a non- resident

associate of the licensee;
(c) the fee is recharged by the associate to the licensee.
(8) If a non-resident contractor provides services for the benefit of a

licensee and the fee for the services is paid to the non-resident
contractor by a non-resident associate of the licensee, this section
applies to any recharge of the fee by the associate to the licensee as if
the associate provided the services to the licensee.
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89H. Withholding Tax
(1) The tax payable for the purposes of Section 83(3) applicable to a
Substituted by
participation dividend paid by a resident licensee to a company is
IT (Am) Act 2015 calculated by applying the rate prescribed in Part IXA of the Third
Schedule to this Act.
(2) The tax payable for the purposes of Section 85(2) by a non-resident
subcontractor deriving income under a Uganda-source services contract
Repealed by
IT (Am) Act 2015 where the services are provided to a contractor and directly related to
petroleum operations under a petroleum agreement is calculated by
applying the rate specified in part IXB of the Third Schedule to this Act.
(3) Section 85 applies to an amount treated as a royalty in section

2(nnn)(i)(E), if it is paid by a contractor to a non-resident subcontractor
in respect of the use of property in Uganda.
(4) A licensee is treated as a designated person for the purposes of Section

Substituted by
IT (Am) Act 2015
119 in respect of payments made to a resident contractor.
(5) Section 119 applies to an amount treated as a royalty in section

2(mmm)(i)(E), if it is paid by a licensee to any contractor in Uganda in
respect of the use of property in Uganda.
(6) For the purposes of this section, “resident contractor” means a

Inserted by contractor that is a resident person.
IT (Am) Act 2015
89I. Tax Accounting Principles
(1) A licensee shall account on an accrual basis.
(2) Except as may be otherwise agreed in writing between the Government

Sections 89I – 89Q and a licensee, all transactions shall be accounted for at arm’s-length
Inserted by IT
(Am) Act 2009 and prices, and a licensee shall disclose all non-arm’s-length transactions in
Substituted by IT
(Am) Act 2010
a return for a specified period if required to do so by the Commissioner.
W.E.F 7/97
(3) A prescribed licensee shall, for purposes of taxation –
(a) maintain accounts for a contract area in Uganda Shillings and in

Substituted by
IT (Am) Act 2015
United States Dollars, and in the case of any conflict, the accounts
maintained in United States Dollars shall prevail; and
(b) use the exchange rates prescribed for conversion of currencies as

follows –
- 109 -
(i) the Government or a prescribed licensee shall not experience

an exchange gain or loss at the expense of, or to the benefit of,
the other; and any gain or loss resulting from the exchange of
currency will be credited or charged to the accounts;
(ii) amounts received and costs and expenditures made in

Uganda shillings, United States Dollars or any other currency
shall be converted into Uganda Shillings or United States
Dollars, as the case may be, on the basis of the average of the
buying and selling exchange rates between the currencies in
question as published by the Bank of Uganda, prevailing on
the last business day of the calendar month preceding the
calendar month in which the amounts are received, and costs
and expenditures are paid.
(iii) in the event of an increase or decrease, one time or

accumulative, of ten per cent (10%) or more in the rates of
exchange between the Ugandan Shilling, the United States
Dollar or the currency in question during any given calendar
month, the following rates will be used –
(aa) for the period from the first of the calendar month to
the day when the increase or decrease is first reached,
the average of the official buying and selling exchange
rates between the United States Dollar, the Uganda
Shilling or the currency in question as issued on the last
day of the previous calendar month.
(ab) for the period from the day on which the increase or
decrease is first reached to the end of the calendar
month, the average of the official buying and selling
exchange rates between the United States Dollar, the
Uganda Shilling or the currency in question as issued
on the last day on which the increase or decrease is
reached.
(4) A prescribed licensee shall maintain a record of the exchange rates used
in converting Uganda Shillings, United States Dollars or any other
currency.
89J. Allocation of Costs and Expenses
(1) Costs and expenses incurred by a contractor in respect of activities

Repealed by
which would only in part qualify as contract expenses shall be allocated
IT (Am) Act 2015
- 110 -
to the books, accounts, records and reports maintained for that purpose,
in a manner that –
(a) avoids any duplication of costs;
(b) fairly and equitably reflects the costs attributable to the petroleum
operations carried out;
(c) excludes any costs and expenses which would be allocated to those
activities which do not constitute petroleum operations.
(2) Any petroleum exploration expenditure or petroleum expenditure or

Inserted by
petroleum development expenditure associated with a unit
IT (Am) Act 2010 development involving a discovery area which extends into a
W.E.F 7/97 and
Substituted by neighbouring country or licence or both shall be allocated on the basis
IT (Am) Act 2015
of the petroleum reserves attributable to that portion of the discovery
area located in Uganda or licence or both.
89K. The Principle of Ring Fencing Repealed by IT (Am) Act 2010
Inserted by
89KA. Valuation and Measurement of Petroleum IT (Am) Act 2010 W.E.F 7/97
For the purposes of determining the value of petroleum derived from

petroleum operations from a contract area, petroleum shall be valued and
measured in accordance with the regulations prescribed by the Minister
which shall be laid before Parliament.
89L. Allowable Currencies Repealed by IT (Am) Act 2010
Inserted by IT (Am) Act 2010 W.E.F 7/97

89M. Consolidation Principle and Substituted by IT (Am) Act 2015
89MA. Application of Sections 111 to 113 of the Act and the Tax
Procedures Code Act
Sections 111 to 113 of this Act and the Tax Procedures Code Act apply
subject to the modifications in this Part, to a licensee in respect of –
(a) mining and petroleum revenues and for that purpose –
(i) such revenues are a “tax”; and
(ii) a consolidated mining revenue return and a consolidated petroleum

revenue return required under section 89O are a “tax return”;
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(b) taxes payable to the Government not included in mining or petroleum

revenues, in this Part referred to as “other taxes”.
89N. Carry Forward Losses Repealed by IT (Am) Act 2010
Substituted by IT (Am) Act 2010 W.E.F 7/2010

89O. Returns And by IT (Am) Act 2015
(1) Section 93 of the Act and sections 16 and 19 of the Tax Procedures
Code Act apply to a licensee subject to the following modifications–
(a) a licensee shall furnish a return not later than seven (7) days after
the end of every month in respect of the provisional payments
required under section 89P(b);
(b) not less than thirty days before the beginning of a year of income, a
contractor shall furnish a return, including particulars for each
calendar quarter of the year, estimated to the best of the
contractor’s judgement, and shall furnish updates of the return
within 7 days after the end of each of the first three calendar
quarters in the year;
(c) the Commissioner may require a duly appointed agent or trustee of

the licensee, whether taxable or not, to furnish a return on the
licensee’s behalf or as an agent or trustee of the licensee;
(d) in addition to a return furnished on a licensee’s own behalf, the

Commissioner may require a licensee acting as an operator in a
contract area, to furnish a return in respect of that area on behalf of
all licensee’s with an interest in the petroleum agreement;
(e) a return required under this section shall include particulars of

mining or petroleum revenues and other taxes prescribed by the
Commissioner;
(f) a return required for any period shall be furnished, whether mining
or petroleum [Government] revenues or other taxes are payable for
the period or not;
(g) the Commissioner may make provision permitting or requiring a

licensee to submit returns electronically.
(2) In addition to a return required under subsection (1), a contractor shall

file an annual consolidated mining or petroleum revenue return with
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the Commissioner at the end of each year of income, not later than
ninety days after the expiry of the year of income.
(3) [A person who fails to furnish a return of income for a tax period within
Repealed by
the time required by this section commits an offence and is liable to pay
IT (Am) Act 2015 a penal tax equal to 2 per cent per annum of the tax payable for that
period.]
Inserted by IT (Am) Act 2010 W.E.F 7/2010
89OA. Assessments, Objections and Appeal & substituted by IT (Am) Act 2015
(1) Part VI of the Tax Procedures Code Act apply to a licensee subject to
the following modifications –
(a) an assessment made by the Commissioner on a licensee may relate

to mining or petroleum revenues and not only to chargeable
income;
Deleted by (b) the time limit in section 95(1) is three years instead of five years;
IT (Am) Act 2015
(c) section 96(1), (2), (3) and (4) apply to a licensee, notwithstanding
that a notice has not been published under section 96(5).
(2) Objections and appeals relating to mining or petroleum revenues shall

be determined in accordance with Part VII of the Tax Procedures Code
Act.
89P. Collection and Recovery Substituted by IT (Am) Act 2010 W.E.F 7/2010
Sections 111 to 113 of this Act and Part VIII of the Tax Procedures Code Act
shall apply to licensees with the following modifications –
(a) mining or petroleum revenues and other taxes charged in any

assessment shall be payable within 7 days after the due date for
furnishing a return;
(b) a licensee shall, in each calendar quarter, make a provisional payment

consisting of –
(i) in the case of income tax, one quarter of the licensee’s estimated
income tax for the year; and
(ii) in the case of mining or petroleum revenues other than income tax,
the amounts payable for the quarter under the Mining Act or
mining right, or petroleum agreement.
- 113 -
(c) unless otherwise agreed between the Government and a prescribed

licensee, all payments or refunds of mining or petroleum revenues other
than those payable in kind and other taxes shall be made in United
States Dollars;
(d) all mining or petroleum revenues shall be payable to the Uganda

Revenue Authority;
(e) subject to paragraph (f), section 113 shall apply to refunds of mining or
petroleum revenues and other taxes payable to the Government;
(f) late payment, or refunds of mining or petroleum revenues and other

taxes payable to the Government shall, for each day on which the sums
are overdue during any month, bear interest compounded daily at an
annual rate equal to the average rates published by the Bank of Uganda
plus five percentage points;
(g) where a licensee has paid mining or petroleum revenues in kind and the
amount payable subsequently requires to be adjusted for any reason, the
adjustment will be made in cash unless otherwise agreed between the
Government and a licensee;
(h) a payment of mining or petroleum revenues made by a licensee shall be

allocated by the Commissioner against amounts payable in the order in
which they become due and in such a way as to minimise any interest
or penalties payable by a contractor.
89Q Repealed by IT (Am) Act
2010
89Q. Classification, Definition and Allocation of Costs and Expenditures
89QA – D Inserted by IT (Am) Act 2010
89QA. Failure to Furnish Returns W.E.F 7/2010 & substituted by IT (Am) Act 2015
(1) A licensee who fails to furnish a return or any other document within
the time prescribed by this Act is liable to a fine of not less than 50,000
United States Dollars and not exceeding 500,000 United States Dollars.
(2) A contractor who files false or inaccurate returns commits an offence

and is liable on conviction to a fine of not less than 50,000 United
Repealed by States Dollars and not exceeding 500,000 United States Dollars or its
IT (Am) Act 2015
equivalent in Uganda Shillings and where there is fraud, a fine of not
less than 500,000 United States Dollars or its equivalent in Uganda
Shillings.
(3) Where a licensee convicted of an offence under subsection (2) fails to

furnish the return or document to which the offence relates within a
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period specified by the court, or furnishes false or inaccurate returns,

that licensee is liable to a fine not exceeding 100,000 United States
Dollars.
89QB. Making False or Misleading Statements
A prescribed licensee or person in relation to a prescribed licensee who is

convicted of an offence under section 58 of the Tax Procedures Code Act
shall be liable –
(a) when the statement or omission was made knowingly or recklessly, to

a fine not less than 1,000,000 United States Dollars or imprisonment
for a term not exceeding five years, or both; or
(b) in any other case, to a fine not less than 50,000 United States dollars
and not exceeding 500,000 United States dollars.”
89QC. Penal Tax and Tax Offences
(1) Part XIV and sections 59, 60, 63, 64, 65, 67 of the Tax Procedures
Code Act apply to a licensee in respect of mining or petroleum revenues
and other taxes subject to the following modifications –
Substituted by (a) interest under section 89P(f) and not penal tax under section 51 of
IT (Am) Act 2011
And (Am) Act 2015 the Tax Procedures Code Act shall be charged where provisional
tax is understated;
(b) a licensee shall not be prosecuted or fined under these sections if

prosecuted or fined for the same offence under the Mining Act,
Petroleum (Exploration, Development and Production) Act or the
petroleum agreement.
89QD. Right of Commissioner to undertake Audit Inserted by IT (Am) Act 2015
Nothing in a mining right, petroleum agreement or in any law shall be

construed as limiting the right of the Commissioner to execute his or her
mandate for purposes of this Act.
PART X – ANTI AVOIDANCE
90. Transactions between Associates
(1) In any transaction between [taxpayers who are] associates or persons

who are in an employment relationship, the Commissioner may
- 115 -
Substituted by distribute, apportion, or allocate income, deductions, or credits between

IT (Am 2) Act 2017
the [taxpayers] associates or persons who are in an employment relationship,
as the case may be, as is necessary to reflect the chargeable income realised
by the taxpayer [would have realised] in an arm’s length transaction.
(2) The Commissioner may adjust the income arising in respect of any
transfer or licence of intangible property between associates so that it is
commensurate with the income attributable to the property.
(3) In making any adjustment under subsections (1) or (2), the

Commissioner may determine the source of income and the nature of
any payment or loss as revenue, capital, or otherwise.
91. Re-characterisation of Income and Deductions
(1) For the purposes of determining liability to tax under this Act, the
Commissioner may –
(a) re-characterise a transaction or an element of a transaction that

was entered into as part of a tax avoidance scheme;
(b) disregard a transaction that does not have substantial economic

effect; or
(c) re-characterise a transaction the form of which does not reflect the
substance.
(2) A “tax avoidance scheme” in subsection (1) includes any transaction,

one of the main purposes of which is the avoidance or reduction of
liability to tax.
PART XI – PROCEDURE RELATING TO INCOME TAX
Returns
92. Furnishing of Return of Income S.92 Repealed by TPC Act 2014
93. Cases where Return of Income not required
Unless requested by the Commissioner by notice in writing, no return of

income shall be furnished under this Act for a year of income –
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(a) by a non-resident person where Section 4(4) or Section 87(1)(c) or both

Substituted by apply to all the income derived from sources in Uganda by the person
IT (Am) Act 2002
during the year of income; or
(b) by a resident individual –
Deleted by (i) to whom Section 4(4) [or (5)] applies, except persons employed by
IT (Am) Act 2002
And substituted by diplomatic missions and prescribed organisations on which diplomatic
IT (Am) Act 2016
immunities and privileges are conferred; or
(ii) whose total chargeable income for the year of income is subject to
the zero rate of tax under Part I of the Third Schedule to this Act.
94. Extension of Time to furnish a Return of Income

Ss.94 – 110 Repealed by TPC Act 2014
Assessments
95. Assessments
96. Self-Assessment
97. Additional Assessments
98. General Provisions in relation to Assessments
Objections and Appeals
99. Objection to Assessment

100. Appeal to the High Court or a Tax Tribunal
101. Appeal to Court of Appeal
102. Burden of Proof
103. Due Date for Payment of Tax

104. Tax as a Debt due to the Government of Uganda
105. Collection of Tax from Persons leaving Uganda Permanently
106. Recovery of Tax from Person owing Money to the Taxpayer
107. Collection of Tax by Distraint
108. Recovery from Agent of Non-Resident
109. Duties of Receivers
110. Security on Property for Unpaid Tax
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Provisional Tax
111. Payment of Provisional Tax
(1) A person who derives or expects to derive any income during a year of
Substituted by income which is not or will not be subject to withholding tax at the
IT (Am) Act 2006 source under Section 116, 117, or 118 [or subject to tax under Section 5]
is liable or subject to pay provisional tax under this Section.
(2) A provisional taxpayer, other than an individual, is liable to pay two

instalments of provisional tax, on or before the last day of the sixth and
twelfth months of the year of income, in respect of the taxpayer’s
liability for income tax for that year.
(3) For the purposes of subsection (2), the amount of each instalment of
provisional tax for a year of income is calculated according to the
Substituted by IT (Am) Act 2002 (50% x A)-B [50% x (A-B)]
where –
A is the estimated tax payable by the provisional taxpayer for

the year of income; and
B is the amount of any tax withheld under this Act, prior to the
due date for payment of the instalment, from any amounts
derived by the taxpayer during the year of income which will
be included in the gross income of the taxpayer for that year.
(4) A provisional taxpayer who is an individual is liable to pay four

instalments of provisional tax, on or before the last day of the third,
sixth, ninth, and twelfth months of the year of income, in respect of the
taxpayer’s liability for income tax for that year.
(5) For the purposes of subsection (4), the amount of each instalment of
provisional tax for a year of income is calculated according to the
Substituted by
IT (Am) Act 2003 (25% x A) - B [25% x (A – B)]
Where
- 118 -
A is the estimated tax payable by the provisional taxpayer for

the year of income; and
B is the amount of any tax withheld under this Act, prior to the
due date for payment of the instalment, from any amounts
derived by the taxpayer during the year of income which will
be included in the gross income of the taxpayer for that year.
(6) Upon written application by the taxpayer, the Commissioner may,

where good cause is shown, extend the due date for payment of an
instalment of provisional tax or allow for payment of such an
instalment in equal or varying amounts.
(7) An instalment of provisional tax, when it becomes due and payable, is a

debt due to the Government and the provisions of this Act shall apply
for the purposes of the collection and recovery of provisional tax by the
Commissioner.
(8) Each instalment of provisional tax shall be credited against the income
tax assessed to the provisional taxpayer for the year of income to which
the instalment relates.
(9) Where the total of the instalments credited under subsection (8) exceeds
the taxpayer’s income tax assessed for that year, the excess shall be
dealt with by the Commissioner in accordance with Section 113(3).
(10) No instalment of provisional tax paid by a provisional taxpayer shall be

refunded to the taxpayer other than in accordance with subsection (9).
(11) In this Section, “estimated tax payable” has the meaning in Section 112;
112. Estimated Tax Payable
(1) A provisional taxpayer’s estimated tax payable for a year of income is –
(a) in the case of a taxpayer to whom Section 4(5) applies, the amount
determined under the Second Schedule to this Act for that year as
the tax payable on the gross turnover of the taxpayer estimated for
that year under subsection (2); or
(b) in any other case, the amount calculated by applying the rates of
tax in force for that year against the amount estimated under
subsection (3) by the taxpayer as the chargeable income of the tax
payer for the year.
- 119 -
(2) Every provisional taxpayer to whom Section 4(5) applies shall furnish
an estimate of the gross turnover of the taxpayer for each year of
income and shall include with the estimate for a year of income, a
statement of the actual gross turnover of the taxpayer for the previous
year of income.
(3) Every provisional taxpayer, other than a taxpayer to whom Section 4(5)
applies, shall furnish an estimate of the chargeable income to be derived
by the taxpayer for a year of income in respect of which provisional tax
is or may be payable by the taxpayer.
(4) A provisional taxpayer’s estimate under subsection (2) or (3) shall be in

the form prescribed by the Commissioner and shall be furnished to the
Commissioner by the due date for payment of the first instalment of
provisional tax for the year of income.
(5) A provisional taxpayer’s estimate under subsection (2) or (3) shall

remain in force for the whole of the year of income unless the taxpayer
furnishes a revised estimate to the Commissioner which revised
estimate shall only apply to the calculation of the provisional tax
payable by the taxpayer after the date the revised estimate was
furnished to the Commissioner.
(6) Where a provisional taxpayer fails to furnish an estimate of gross

turnover or chargeable income as required by subsection (2) or (3), the
estimated gross turnover or chargeable income of the taxpayer for the
year of income shall be such amount as estimated by the
Commissioner.
Refund of Tax
113. Refunds
(1) A taxpayer may apply to the Commissioner for a refund, in respect of

any year of income, of any tax paid by withholding, instalments, or
otherwise in excess of the tax liability assessed to or due by the taxpayer
for that year.
(2) An application for a refund under this Section shall be made to the
Commissioner in writing within five years of the later of –
(a) the date on which the Commissioner has served the notice of
assessment for the year of income to which the refund application
relates; or
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(b) the date on which the tax was paid.
(3) Where the Commissioner is satisfied that tax has been over paid, the
Commissioner shall –
(a) apply the excess in reduction of any other tax due from the
taxpayer;
(b) apply the balance of the excess, if any, in reduction of any

outstanding liability of the taxpayer to pay other taxes not in
dispute or to make provisional tax payments during the year of
income in which the refund is to be made; and
Inserted by (c) refund the remainder, if any, to the taxpayer.

IT (Am) Act 2002
(4) Where the Commissioner is required to refund an amount of tax to a

person as a result of –
(a) an application made to him or her under this Act;
(b) a decision under Section 99;
Substituted by
IT (Am) Act 2002
(c) a decision of the High Court or Tribunal under Section 100; or
(d) a decision of the Court of Appeal under Section 101,
the Commissioner shall pay simple interest at a rate of two per cent per
month for the period commencing on the date the person [paid the tax
Substituted by
IT (Am) Act 2002
refunded] made the application for refund and ending on the last day of the
month in which the refund is made.
(5) The Commissioner shall, within thirty days of making a decision on a

refund application under subsection (1), serve on the person applying
for the refund a notice in writing of the decision.
(6) A person dissatisfied with a decision referred to in subsection [(6)] (5)

Substituted by
may only challenge the decision under the objection and appeal
IT (Am) Act 2002 procedure in this Act.
- 121 -
PART XII – PROCEDURE RELATING TO RENTAL TAX
114. Rental Tax
(1) An individual [A resident individual] charged to tax under Section 5

Substituted by shall furnish a return of [gross] rental income for each year of income
IT (Am) Act 2002
& IT (Am) Act 2009
not later than six [four] months after the end of that year.
(2) Sections 92, 94 to 110 and 113 apply, with the necessary changes made,
to the tax imposed under Section 5.
(3) For the avoidance of doubt, the Commissioner shall prescribe the form
Substituted by for return of [gross] rental income under this Section.
IT (Am) Act 2002
PART XIII – WITHHOLDING OF TAX AT THE SOURCE
115. Interpretation of Part XIII
In this Part –
(a) “payee” means a person receiving payments from which tax is required
to be withheld under this Part; and
(b) “withholding agent” means a person obliged to withhold tax under this
Part.
116. Withholding of Tax by Employers
(1) Every employer shall withhold tax from a payment of employment

income to an employee as prescribed by regulations made under Section
164.
(2) The obligation of an employer to withhold tax under subsection (1) is

not reduced or extinguished because the employer has a right, or is
otherwise under an obligation, to deduct and withhold any other
amount from such payments.
(3) The obligation of an employer to withhold tax under subsection (1)

applies notwithstanding any other law which provides that the
employment income of an employee shall not be reduced or subject to
attachment.
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117. Payment of Interest to Resident Persons
(1) Subject to subsection (2), a resident person who pays interest to another
resident person shall withhold tax on the gross amount of the payment
at the rate prescribed in Part V of the Third Schedule to this Act.
(2) This Section does not apply to –
(a) interest paid by a natural person;
Inserted by (b) interest, other than interest from government securities, paid to a
IT (Am) Act 2006
financial institution;
(c) interest paid by a company to an associated company; or
(d) interest paid which is exempt from tax in the hands of the
recipient.
(3) In this Section, “associated company”, in relation to a company, in this

subsection referred to as the “payer company”, means –
(a) a company in which the payer company controls fifty per cent or
more of the voting power in the company either directly or through
one or more interposed companies;
(b) a company which controls fifty per cent or more of the voting
power in the payer company either directly or through one or more
interposed companies; or
(c) a company, in this subsection referred to as the “payee company”,

where another company controls fifty per cent of the voting power
in the payee and payer companies either directly or through one or
more interposed companies.
118. Payment of Dividends to Resident Shareholders
(1) A resident company which pays a dividend to a resident shareholder

shall withhold tax on the gross amount of the payment at the rate
prescribed in Part V of the Third Schedule to this Act.
(2) This Section does not apply where the dividend income is exempt from
tax in the hands of the shareholder.
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Inserted by IT (Am) Act 2002 & substituted by

118A. Withholding Tax from Professional Fees IT (Am) Act 2010 & IT (Am) Act 2013
(1) A resident person who pays management or professional fees to a

resident [professional] person shall withhold tax on the gross amount of
the payment at the rate prescribed in Part VIII of the Third Schedule.
(2) This Section does not apply to a [professional] resident person who the
Commissioner is satisfied has regularly complied with the obligations
imposed on that person under this Act.
Inserted by
118B. Withholding of Tax by the Purchaser of an Asset IT (Am) Act 2013
A resident person who purchases an asset from a non-resident person shall

withhold tax on the gross amount of the payment at the rate prescribed in
Part VIII of the Third Schedule.
Inserted by IT (Am) Act 2014;
118C. Payments for winnings of sports betting or pool betting Repealed by IT (Am) Act 2016.
Re-enacted by IT (Am 2) Act 2017
A person who makes payments for winnings of sports betting or pool betting
shall withhold tax on the gross amount of the payment, at the rate prescribed
in Part X of the Third Schedule to this Act.
118D Withholding Tax on Payments of Re-Insurance Premiums
(1) A resident person who makes a payment of premium for re-insurance

118D Inserted by services to a non-resident person shall withhold tax on the gross amount
IT (Am) Act 2014
of the payment at a rate prescribed in Part XI of the Third Schedule.
(2) Subsection (1) does not apply to re-insurance services provided by –
(a) Uganda Reinsurance Company Limited;
(b) African Reinsurance Corporation;
(c) PTA Reinsurance Company.
119. Payment for Goods and Services
(1) Where the Government of Uganda, a Government institution, a local

authority, any company controlled by the Government of Uganda, or
any person designated in a notice issued by the Minister, in this Section
referred to as the “payer”, pays an amount or amounts in aggregate
exceeding one million shillings to any person in Uganda –
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(a) for a supply of goods or materials of any kind; or
(b) for a supply of any services,
the payer shall withhold tax on the gross amount of the payment at the
rate prescribed in Part VIII of the Third Schedule to this Act, and the
payer shall issue a receipt to the payee.
(2) Where –
(a) there are separate supplies of goods or materials, or of services and

each supply is made for an amount that is one million shillings or
less; and
(b) it would reasonably be expected that the goods or materials, or

services would ordinarily be supplied in a single supply for an
amount exceeding one million shillings,
subsection (1) applies to each supply.
(3) Every person who imports goods into Uganda is liable to pay tax at the
time of importation on the value of the goods at the rate prescribed in
Part VIII of the Third Schedule to this Act.
(4) The value of goods under subsection (3) shall be the value of the goods
ascertained for the purposes of customs duty under the laws relating to
customs.
a, b ,c ,d, g Repealed by
(5) This Section does not apply to – IT (Am) Act 2015
Deleted by
[IT (Am) Act 2009]
(a) a supply or importation of petroleum or petroleum products,
And substituted by including furnace oil, [lubricants] other than lubricants, cosmetics
IT (Am) Act 2010
and fabrics or yarn manufactured out of petroleum products;
(b) a supply or importation of plant and machinery;
(c) a supply or importation of human or animal drugs;
(d) a supply or importation of scholastic materials;
(e) importations by organisations within the definition of “exempt

organisation” in Section 2(bb)(i)(B);
(f) a supplier or importer –
- 125 -
(i) who is exempt from tax under this Act; or
(ii) who the Commissioner is satisfied has regularly complied

with the obligations imposed on the supplier or importer
under this Act; or
Inserted by
Finance Act 2001
(g) the supply or importation of raw materials.
(6) The tax paid under subsections (1) and (3) is treated as tax withheld for
Substituted by the purposes of Section 128.
IT (Am) Act 2002
120. International Payments
(1) Any person making a payment of the kind referred to in Section 83, 85
Substituted by or 86 shall withhold from the payment the tax levied under the relevant
IT (Am) Act 2016
Section.
(2) Any promoter, agent, or similar person –
(a) paying remuneration to a non-resident entertainer or sportsperson;

or
(b) responsible for collecting the gross receipts from a performance in

Uganda by a theatrical, musical, or other group of non-resident
entertainers or sportspersons,
shall withhold from the remuneration or receipts the tax levied under
Section 84.
(3) This Section does not apply where the payment is exempt from tax.
121. Non-Resident Services Contract
(1) Every person who enters into an agreement with a non-resident for the
provision of services by the non-resident which services give rise to
income sourced in Uganda shall, within thirty days of the date of
entering into such agreement, notify the Commissioner in writing of –
(a) nature of such agreement;
(b) the likely duration of the agreement;
(c) the name and postal address of the non-resident person to whom
payments under the agreement are to be made; and
- 126 -
(d) the total amount estimated to be payable under the agreement to

the non-resident person.
(2) The Commissioner may, by notice in writing served on the person who
has notified the Commissioner under subsection (1), require that person
to withhold tax from any payment made under the agreement at the
rate specified by the Commissioner in the notice.
(3) Subsection 2 does not apply to a contract to which Section 85 applies.
(4) A person who fails to notify the Commissioner in accordance with

(3) Substituted,
subsection (1) is personally liable to pay to the Commissioner the
(4) & (5) inserted by amount of tax that the non-resident is liable for on the income arising
IT (Am) Act 2011
under the contract, but the person is entitled to recover this amount
from the non-resident.
(5) The provisions of this Act relating to collection and recovery of tax
apply to the liability imposed by subsection (1) as if it were tax.
122. Withholding as a Final Tax
Where –
(a) tax has been withheld under Section 117 on a payment of interest on
Inserted by treasury bills or other Government securities by the Bank of Uganda to any
IT (Am) Act 2006
and substituted by
person or by a financial institution to a resident individual, other than in
IT (Am) Act 1 2008 the capacity of trustee, resident retirement fund, or to an exempt
organisation; or
(b) tax has been withheld under Section 118 on a payment of dividends to a
resident individual;
the withholding tax is a final tax and –
(c) no further tax liability is imposed upon the taxpayer in respect of the
income to which the tax relates;
(d) that income is not aggregated with the other income of the taxpayer for
the purposes of ascertaining chargeable income;
(e) no deduction is allowed for any expenditure or losses incurred in

Substituted by deriving the income; and
IT (Am) Act 2002
(f) no refund of tax shall be made in respect of the income.
- 127 -
123. Payment of Tax Withheld
(1) Subject to subsection (2), a withholding agent shall pay to the

Commissioner any tax that has been withheld or that should have been
withheld under this Part within fifteen days after the end of the month
in which the payment subject to withholding tax was made by the
withholding agent.
(2) Where a person withholds or should have withheld tax as required

under Section 120(2), the tax shall be paid to the Commissioner within
five days of the performance or by the day before the date the non-
resident leaves Uganda, whichever is the earlier.
(3) The provisions of this Act relating to the collection and recovery of tax
apply to any amount withheld under this Part as if it were tax.
123A. Advance Tax for Transport Services Inserted by IT (Am 2) Act 2017
A taxpayer who provides a passenger transport service or a freight transport

service where the goods vehicle used has a loading capacity of at least two
tonnes shall pay an advance tax at the rates specified in Part III of the Second
Schedule.
124. Failure to Withhold Tax
(1) A withholding agent who fails to withhold tax in accordance with this
Act is personally liable to pay to the Commissioner the amount of tax
which has not been withheld, but the withholding agent is entitled to
recover this amount from the payee.
apply to the liability imposed by subsection (1) as if it were tax.
125. Tax Credit Certificates
(1) Subject to subsection (3), a withholding agent shall deliver to the payee
a tax credit certificate setting out the amount of payments made and tax
withheld during a year of income.
(2) A payee who is required to furnish a return of income shall attach to the
return the tax credit certificate or certificates supplied to the payee for
the year of income for which the return is filed.
- 128 -
(3) A withholding agent shall at the end of each year of income deliver to
the employee to which Section 4(4) applies a certificate setting out the
amount of tax withheld during a year of income.
126. Record of Payments and Tax Withheld
(1) A withholding agent shall maintain, and keep available for inspection
by the Commissioner, records showing, in relation to each year of
income –
(a) payments made to a payee; and
(b) tax withheld from those payments.
(2) The records referred to in subsection (1) shall be kept by the

withholding agent for five years of income after the end of the year of
income to which the records relate.
(3) The Commissioner may call upon a withholding agent to allow an

auditor to examine the agent’s records to verify their accuracy against
the agent’s tax credit certificates.
127. Priority of Tax Withheld
(1) Tax withheld by a withholding agent under this Act –
(a) is held by the withholding agent in trust for the Government of

Uganda; and
(b) is not subject to attachment in respect of a debt or liability of the

withholding agent,
and in the event of the liquidation or bankruptcy of the withholding

agent, an amount withheld under this Act does not form a part of the
estate in liquidation, assignment, or bankruptcy; and the Commissioner
shall have a first claim before any distribution of property is made.
(2) Every amount which a withholding agent is required under this Act to
withhold from a payment is –
(a) a first charge on that payment; and
- 129 -
(b) withheld prior to any other deduction which the withholding agent
may be required to make by virtue of an order of any court or any
other law.
128. Adjustment on Assessment and Withholding Agent’s Indemnity
(1) The amount of tax withheld under this Part is treated as income derived
by the payee at the time it was withheld.
(2) A withholding agent who has withheld tax under this Part and remitted
the amount withheld to the Commissioner is treated as having paid the
withheld amount to the payee for the purposes of any claim by that
person for payment of the amount withheld.
(3) Tax withheld from a payment under this Part is deemed to have been
paid by the payee and, except in the case of a tax that is a final tax
under this Act, is credited against the tax assessed on the payee for the
year of income in which the payment is made.
(4) Where the tax withheld under this Part for a year of income, together
with any provisional tax paid under Section 111 for that year, exceeds
the liability under an assessment of the taxpayer for that year, the excess
shall be dealt with by the Commissioner in accordance with Section
113(3).
(5) Where a person who pays tax in accordance with Section 119(3) is an
individual whose only source of income is employment income, the tax
shall be refunded on application by that person in accordance with
Section 113.
PART XIV – RECORDS AND INFORMATION COLLECTION
129. Accounts and Records S.129 Repealed by TPC Act 2014
130. Business Information Returns
(1) Every person carrying on business in Uganda who makes a payment of

income sourced in Uganda, being services income, [other than
Repealed by
IT (Am) Act 2002 employment income,] interest, royalties, management fees, or other
income specified by the Commissioner shall furnish a return of such
payments, in this Section referred to as a “business information return”,
to the Commissioner within sixty days after the end of the year of
income in which the payment was made.
- 130 -
(2) A business information return shall be in the form specified by the

Commissioner and shall state the information required.
(3) Subsection (1) does not apply to the payment of any income subject to
Inserted by withholding of tax at the source under Part XIII, other than employment
IT (Am) Act 2013
income.
(4) Despite subsection (1), a person required to withhold tax under section
Inserted by
116 shall furnish a withholding tax return for every month in the form
IT (Am) Act 2013 specified by the Commissioner, not later than fifteen days after the end
of the month to which the withholding tax relates for all employees
liable to tax.
131. Access to Books, Records, and Computers

Ss.131 – 135 Repealed by
132. Notice to obtain Information or Evidence TPC Act 2014
133. Books and Records not in the English Language
Tax Clearance Certificate
134. Tax Clearance Certificate S 134 repealed by TPC Act 2014 &
Re-enacted by ITA (Am) Act 2015
A taxpayer –
(a) providing a passenger transport service;
(b) providing a freight transport service where the goods vehicle used has a
load capacity of more than 2 tonnes;
(c) supplying goods or services to the Government;
(d) transferring funds in excess of 2500 currency points from Uganda to a

place outside Uganda; or
(e) to whom paragraphs (a) and (b) apply shall be required to pay advance
Inserted by
tax at the rates specified in Part III of the Second Schedule to this Act
IT (Am) Act 2015 before renewal of operational licenses,
shall obtain a tax clearance certificate from the Commissioner as provided for
in regulations made under Section 164.
- 131 -
Taxpayer Identification Number
135. Taxpayer Identification Number Repealed by TPC Act 2014
(1) For purposes of identification of taxpayers, the Commissioner General

Substituted by shall issue a number to be known as a taxpayer identification number to
IT (Am) Act 2011
every taxpayer.
(2) The Commissioner General may require a person to show his or her
taxpayer identification number in any return, notice, or other document
used for the purposes of this Act.
(3) Every local authority, Government institution, or regulatory body shall

require a taxpayer identification number from any person applying for a
Enacted by
IT (Am) Act 2015 license or any form of authorisation necessary for purposes of
conducting any business in Uganda.
PART XV – OFFENCES AND PENALTIES
Interest
136. Interest on Unpaid Tax
(1) A person who fails –
(a) to pay any tax, including provisional tax;
(b) to pay any penal tax; or
(c) to pay to the Commissioner any tax withheld or required to be

withheld by the person from a payment to another person,
on or before the due date for payment is liable for interest at a rate equal
to two per cent per month on the amount unpaid calculated from the
date on which the payment was due until the date on which payment is
made.
(2) Interest paid by a person under subsection (1) shall be refunded to the
person to the extent that the tax to which the interest relates is found
not to have been due and payable.
(3) Where good cause is shown, in writing, by the person liable for
payment of interest, the Minister may, on the advice of the
- 132 -
Commissioner, remit, in whole or in part, any interest charged under

this Section.
(4) Interest charged in respect of a failure to comply with Section 123 is

borne personally by the withholding agent and no part of it is
recoverable from the person who received the payment from which tax
was or should have been withheld under Part XIII which deals with
withholding of tax.
(5) Interest charged under this Section shall be simple interest.
apply to any interest charged under this Section as if it were tax due.
(7) The interest due and payable under subsection (1) which exceeds the
7 & 8 Inserted by aggregate of the principal tax and the penal tax shall be waived.
IT (Am 2) Act 2017
(8) For the avoidance of doubt, where interest due and payable as at 30th
June 2017 exceeds the aggregate of the principal tax and the penal tax,
the interest in excess of the aggregate shall be waived.
137. Failure to Furnish a Return Ss.137 – 162 Repealed by

TPC Act 2014
138. Failure to comply with Recovery Provision
139. Failure to maintain Proper Records
140. Failure to comply with sections 121, 129, 130, 131, 132 and 133
141. Improper use of Taxpayer Identification Number
142. Making False or Misleading Statements
143. Obstructing an Officer of the Authority
144. Aiding and Abetting
145. Offences by and relating to Officers
146. Offences by Companies
147. Officer may appear on behalf of the Commissioner
148. Compounding Offences
149. Place of Trial
150. Tax charged to be paid notwithstanding Prosecution
Penal Tax
151. Penal Tax for Failure to Furnish a Return of Income

152. Penal Tax in relation to Records
153. Penal Tax in relation to False or Misleading Statements
154. Penal Tax for understating Provisional Tax Estimates
- 133 -
155. Recovery of Penal Tax
PART XVI – ADMINISTRATION
156. Delegation
157. Official Secrecy
Forms and Notices
158. Forms and Notices; Authentication of Documents

158A. Use of Information Technology
158B. Cancellation of Registration
158C. Offences
159. Service of Notices and other Documents
Rulings
160. Practice Notes

161. Private Rulings
Remission of Tax
162. Remission of Tax
PART XVII - MISCELLANEOUS
163. Interpretation of Part XVII
In this Part, “repealed legislation” means the Income Tax Decree, 1974,
amendments to it and subsidiary legislation made under it and Section 25 of
the Investment Code, 1991.
164. Regulations
(1) The Minister may, by statutory instrument, make regulations for better
carrying into effect the purposes of this Act.
(2) Without prejudice to the general effect of subsection (1), regulations

made under that subsection may –
(a) contain provisions of a saving or transitional nature consequent on

the making of this Act; or
(b) prescribe penalties for the contravention of the regulations not

exceeding a fine of twenty five currency points or imprisonment
- 134 -
not exceeding six months or both, and may prescribe, in the case of
continuing offences, an additional fine not exceeding five currency
points in respect of each day on which the offence continues.
165. Amendment of Monetary Amounts and Schedules
The Minister may, with the approval of Parliament, by statutory instrument,

amend
(a) any monetary amount set out in this Act; or
(b) the Schedules.
166. Transitional
(1) The repealed legislation continues to apply to years of income prior to

the year of income in which this Act comes into force.
(2) All appointments made under the repealed legislation and subsisting at
the date of commencement of this Act are deemed to be appointments
made under this Act.
(3) Any arrangement between the Government of Uganda and the

Government of a foreign country with a view to affording relief from
double taxation made under Section 47 of the Income Tax Decree 1974
or its predecessor and which is still in force at 1st July 1997 continues to
have effect under this Act.
(4) All forms and documents used in relation to the repealed legislation
may continue to be used under this Act, and all references in those
forms and documents to provisions of, and expressions appropriate to,
the repealed legislation are taken to refer to the corresponding
provisions and expressions of this Act.
(5) A reference in this Act to a previous year of income includes, where the
context requires, a reference to a year of income under the repealed
legislation.
(6) Section 3(1)(d) of the Income Tax Decree 1974 continues to apply to an
amount referred to in Section 21(1)(h) of this Act if the payer of the
alimony, allowance, or maintenance has obtained a deduction for the
payment under the Income Tax Decree 1974 prior to the
commencement of this Act.
- 135 -
(7) Section 18(1)(a) and 22(1)(b) do not apply to business assets of a capital
nature disposed of before 1st April 1998 or to business debts of a capital
nature cancelled or satisfied before 1st April 1998.
(8) Where, as a result of the application of this Act, a gain or loss on

realisation of a liability is subject to tax being a gain or loss which
would not otherwise have been subject to tax, the value of the liability
on 31st March 1998 shall be used in the calculation of any income or
deduction as from that date.
(9) Subject to subsection (10) and (11), where, as a result of the application
of this Act, a gain or loss on disposal of an asset is subject to tax being a
gain or loss that would not otherwise have been subject to tax, the cost
base of the asset is calculated on the basis that each item of cost or
expense included in the cost base and which was incurred prior to that
date is determined according to the following formula -
CB x CPID
CPIA
where –
Substituted by CB is the amount of an item of cost or expense incurred on or

IT (Am) Act 2002
before 31st March 1998 included in the cost base of the asset;
CPID is the Consumer Price Index number published for the

month ending on 31st March 1998; and
CPIA is the Consumer Price Index number published for the

month immediately prior to the date on which the relevant
item of cost or expense was incurred.
(10) Where the taxpayer is able to substantiate the market value of an asset
on 31st March 1998, the taxpayer may substitute that value for the cost
base determined under subsection (9).
(11) Where the asset referred to in subsection (10) is immovable property,

the cost base of the property as at 31st March 1998 is equal to the market
value of the property as determined by the Chief Government Valuer.
(12) Section 27(4)(b) shall apply to depreciable assets acquired by a taxpayer

before 1st July 1997 and held by the taxpayer at that date on the basis
that the cost base of the asset is the cost of the asset less any
depreciation deductions allowed under the repealed legislation in
respect of that cost.
- 136 -
(13) For the purposes of Section 29(6), the “residue of expenditure” of an

Substituted by
industrial building at 30th June 1997, shall be the residue of expenditure
IT (Am) Act 2002 as determined under the Income Tax Decree 1974, at that date.
(14) The amount of a deduction allowed to a taxpayer under Section 38 for

the year of income commencing on 1st July 1997, shall be determined
under Section 14(4) of the Income Tax Decree 1974.
(15) The amount of a deduction allowed under Sections 30 and 31 in respect

of start-up costs incurred or intangible assets acquired before this Act
comes into force shall be calculated on the assumption that those
Sections had always applied.
(16) For the purpose of applying subsections (7) to (14) to a taxpayer

permitted to use a substituted year of income for the first year of income
under this Act -
(a) the reference in those subsections to 31st March 1998 is treated as a

reference to the day immediately preceding the commencement of
the first year of income of the taxpayer under this Act; and
(b) the reference in those subsections to 1st April 1998 is treated as a

reference to the first day of the first year of income of the taxpayer
under this Act.
(17) A taxpayer entitled to use a substituted year of income under the

Income Tax Decree 1974 is permitted to continue to use that period as
the taxpayer’s substituted year of income under this Act until the
Commissioner decides otherwise by notice in writing to the taxpayer.
(18) Where a taxpayer subject to tax under this Act but who was not subject
to tax under the Income Tax Decree 1974 is entitled to use a substituted
year of income, the taxpayer is treated for the purposes of Section 39(6)
of this Act as having a transitional year of income for the period 1st July
1997, to the end of the day immediately preceding the start of the first
substituted year of income after that date.
(19) Finance leases, as defined in Section 59 of this Act, entered into before
Substituted by 1st July 1997 shall be dealt with in terms of the Income Tax Decree,
IT (Am) Act 2002
1974.
(20) A reference in Section 62 to a previously deducted expenditure, loss or

bad debt includes a reference to an expenditure, loss or bad debt
deducted under the repealed legislation.
- 137 -
(21) Notwithstanding the repeal of Section 25 of the Investment Code 1991,

the holder of a certificate of incentives which is valid at the
commencement of this Act may make an election in writing to the
Commissioner by 31st December 1997 for the exemption from tax on
corporate profits and the exemption from withholding tax paid on
dividends and interest paid to resident persons as provided under
Section 25 of the Investment Code 1991 to continue until the exemption
expires in accordance with that Section, as if that Section had not been
repealed.
(22) Notwithstanding the exemption referred to in subsection (21), a holder

of a certificate of incentives validly in force at 30th June 1997, and who
has made an election under subsection (21) shall furnish a return of
income in accordance with Section 92 prepared on the basis that the
holder is not exempt from tax for each year of income for which the
exemption applies under this Act.
(23) Where an exemption referred to in subsection (21) expires, the

following provisions apply to the holder of the certificate of incentives –
(a) subsections (7) to (10) apply to the person on the basis that the
Substituted by
IT (Am) Act 2002
reference in those subsections to 31st March 1998 is treated as a
reference to the day on which the exemption expired;
(b) the amount of the deduction allowed under Sections 27, 29, 30 and
31 in respect of depreciable assets, industrial buildings, or
intangible assets acquired, or start-up costs incurred, before the
exemption expired shall be calculated on the assumption that those
Sections had always applied; and
(c) the amount of any assessed loss to be deducted in the first year of
income after the exemption has expired is calculated on the basis
that this Act and its predecessor has always applied to the person.
(24) Notwithstanding the repeal of Section 25 of the Investment Code 1991,

and without prejudice to other relevant provisions of this Section, an
investor who, immediately before the commencement of this Act, holds
a valid investment licence under the Investment Code 1991, and who
but for this Act would be eligible for the grant of a certificate of
incentives and whose application had been approved for a certificate of
incentives shall be issued with the certificate in accordance with the
Investment Code 1991, as if Section 25 of the Code had not been
repealed.
- 138 -
(25) Where a person, but for the repeal of Section 25 of the Investment Code
1991, would have been issued with a certificate of incentives under the
Investment Code 1991, and the person had placed an item of eligible
property, as defined in Section 28(3) into service during the year of
income immediately preceding the person’s first year of income under
this Act, the person shall be treated as having placed the item of eligible
property into service during the person’s first year of income under this
Act.
(26) Subject to subsection (27), where the income of a person is wholly or

partly exempt from tax under –
(a) a notice published in the Gazette under Section 12(2) of the Income
Tax Decree 1974; or
(b) a provision in any agreement,
the notice or provision shall have no effect under this Act unless the
Minister has concurred in writing by 31st December 1997 with the
exemption provided for in the notice or provision.
(27) Subsection (26) does not apply where the exemption is provided for in
an agreement between the Government of Uganda and a foreign
government or the United Nations or a specialised agency of the United
Nations.
- 139 -
FIRST SCHEDULE
S.2
Listed Institutions
African Development Bank
African Development Fund
Aga Khan Foundation
Austrian Development Agency (ADA)
Belgian Technical Cooperation (BTC)
Danish International Development Agency (DANIDA)

Inserted by
IT (Am) Act 2012
Department for International Development (DFID)
Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ)
East African Development Bank
Eastern and Southern African Trade and Development Bank
European Development Fund
European Investment Bank
European Union
Food and Agriculture Organisation
Inserted by
IT (Am) Act 2012
French Development Agency (AFD)
Inserted by
IT (Am) Act 2015 Global Fund for AIDS, Malaria and Tuberculosis
Inserted by
IT (Am) Act 2012 Icelandic International Development Agency (ICEADA)
International Bank for Reconstruction and Development

Inserted by
IT (Am) Act 2016 International Centre for Research in Agroforestry (ICRAF)
International Civil Aviation Organisation
- 140 -
International Development Association
International Finance Corporation
International Labour Organisation
International Monetary Fund

Inserted by
IT (Am) Act 2016 International Potato Centre
International Telecommunications Union
Japan International Cooperation Agency (JICA)
Korea International Cooperation Agency (KOICA)
Kreditanstalt fur Wiederaufbau (KFW)

Inserted by
IT (Am) Act 2012 Norwegian Agency for Development Cooperation (NORAD)
Swedish International Development Agency (SIDA)
United Nations related Agencies and Specialised Agencies
- 141 -
SECOND SCHEDULE
S.4
Small Business Taxpayers Tax Rates
Part I Substituted by IT (Am) Act 2003,
Part I (Am) Act 2014 and (Am) Act 2015
1. The amount of tax payable for purposes of Section 4(5) is –
GROSS TURNOVER TAX
Where the gross turnover of the taxpayer

Shs.937,500 or 1.5% of the gross
exceeds Shs.50 million [shs.5 million]
turnover, whichever is lower
but does not exceed shs.75 million
[NIL [Shs.100,000]
[shs.10 [20] million] per annum.
Where the gross turnover of the Shs.1,312,500 [shs.450,000

taxpayer exceeds Shs.75 million [shs.10 [250,000] or 1.5% [3% [1%] of
[20] million] but does not exceed Shs.100 the gross turnover, whichever is
million [shs.20 [30] million]per annum lower
Where the gross turnover of the taxpayer Shs.1,687,500 [shs.750,000

exceeds Shs.100 million [shs.20 [30] [350,000] or 1.5% [3% [1%] of
million] but does not exceed Shs.125 the gross turnover, whichever is
million [shs.30 [40] million] per annum. lower
Where the gross turnover of the Shs.2,062,500 [shs.1,050,000

taxpayer exceeds Shs.125 million [shs.30 [450,000] or 1.5% [3% [1%] of
[40] million] but does not exceed Shs.150 the gross turnover, whichever is
million [shs.40 [50] million] per annum. lower
Where the gross turnover of the taxpayer

Shs.1,350,000 or 3% of the gross
exceeds shs.40 million but does not
turnover, whichever is lower.
exceed shs.50 million per annum.
- 142 -
2. The tax payable by a taxpayer under Section 4(5) is reduced by –
(a) any credit allowed under Section 128(3) for withholding tax paid
in respect of amounts included in the gross turnover of the
taxpayer; or
(b) any credit allowed under Section 111(8) for provisional tax paid in
respect of amounts included in the gross turnover of the taxpayer.
Part II & III Inserted by IT (Am) Act 2015. Income Bracket heading
substituted by IT (Am) Act 2016. Clinics Repealed by IT (Am) Act Part II
2016. Drug Shops substituted by IT (Am) Act 2016
1. The amount of tax payable for purposes of section 4(5) where the gross
turnover is less than fifty million shillings is –
(i) Kampala City and Divisions of Kampala
Where the gross Where the gross Where the gross

BUSINESS turnover exceeds turnover exceeds turnover exceeds
TRADE shs.35m but does shs.20m but does shs.10m but does
not exceed shs.50m not exceed shs.35m not exceed shs.20m
General Trade 500,000 400,000 250,000

Carpentry/ Metal
500,000 400,000 250,000
Workshops
Garages (Motor
550,000 450,000 300,000
Vehicle repair)
Hair and Beauty/
550,000 400,000 300,000
Salons
Restaurants or Bars 550,000 450,000 300,000
Clinics 550,000 450,000 300,000
Drug Shops 500,000 350,000 250,000
Others 450,000 300,000 200,000
- 143 -
(ii) Municipalities

TRADE shs.35m but does shs.20m but does shs.10m but does
not exceed shs.50m not exceed shs.35m not exceed shs.20m
General Trade 400,000 300,000 150,000

Carpentry/ Metal
400,000 300,000 150,000
Workshops
Garages (Motor
450,000 350,000 200,000
Vehicle repair)
Hair and Beauty/
450,000 350,000 200,000
Salons
)Clinics 450,000 350,000 200,000
Drug Shops 400,000 300,000 150,000
Others 400,000 350,000 150,000
(iii) Towns and Trading Centres

shs.35m but does not shs.20m but does not shs.10m but does not
TRADE exceed shs.35m exceed shs.20m
exceed shs.50m
General Trade 300,000 200,000 100,000

Carpentry/ Metal
300,000 200,000 100,000
Workshops
Garages (Motor
350,000 250,000 100,000
Vehicle repair)
Hair and Beauty/
350,000 250,000 100,000
Salons
Clinics 350,000 250,000 100,000
Drug Shops 300,000 200,000 100,000
Others 300,000 250,000 100,000
- 144 -
Substituted By IT (Am 2) Act 2017 Part III
The rate of advance tax under section 123A [134(e)] shall be –
(a) for goods vehicles: fifty thousand shillings per ton per year;
(b) for passenger service vehicles: twenty thousand shillings per seat
[passenger] per year.
- 145 -
THIRD SCHEDULE
Ss.6, 7, 8, 83, 84, 85, 86, 117, 118,119
Rates of Tax
s.6 (1)
Substituted by IT (Am) Act 2012
NB: Monthly (pm)values my addition. Part I
Income Tax Rates for Individuals
1. The income tax rates applicable to resident individuals are –
CHARGEABLE INCOME RATE OF TAX
Not exceeding Ushs.2,820,000

Nil
(235,000 pm)
Exceeding Ushs.2,820,000 10% of the amount by which

(235,000 pm) but not exceeding Chargeable income exceeds
Ushs.4,020,000 (335,000 pm) Ushs.2,820,000 (235,000 pm).
Exceeding Ushs. 4,020,000 UShs.120,000 (10,000 pm) plus 20% of the

(335,000 pm) but not exceeding amount by which chargeable income
Ushs.4,920,000 (410,000 pm) exceeds Ushs.4,020,000 (335,000 pm).
(a) UShs.300,000 (25,000 pm) plus 30% of

the amount by which chargeable
income exceeds Ushs.4,920,000
(410,000 pm); and
Exceeding Ushs.4,920,000
(b) Where the chargeable income of an
(410,000 pm)
individual exceeds Ushs.120,000,000
(10,000,000 pm) an additional 10%
charged on the amount by which
chargeable income exceeds
Ushs.120,000,000 (10,000,000 pm).
- 146 -
2. The income tax rates applicable to non-resident individuals are –
CHARGEABLE INCOME RATE OF TAX
Not exceeding Ushs. 4,020,000

10%
Substituted by (335,000 pm)
IT (Am) Act
2012
NB: Monthly
(pm) values my
addition.
Exceeding Ushs. 4,020,000 Ushs.402,000 (33,500 pm) plus 20% of the
(335,000 pm) but not exceeding amount by which chargeable income
Ushs. 4,920,000 (410,000 pm) exceeds Ushs.4,020,000 (335,000 pm).
(a) Ushs.582,000 (48,500 pm) plus 30% of

the amount by which chargeable
income exceeds Ushs. 4,920,000
(410,000 pm); and
Exceeding Ushs. 4,920,000
(b) Where the chargeable income of an
(410,000 pm)
individual exceeds shs.120,000,000
(10,000,000 pm) an additional 10%
charged on the amount by which
chargeable income exceeds
Ushs.120,000,000 (10,000,000 pm).
S.7
Part II
Income Tax Rate for Companies
1. The income tax rate applicable to companies, other than mining

companies, for the purposes of Section 7 is 30%.
2. Subject to paragraphs 3 and 4, the income tax rate applicable to mining

companies is calculated according to the following formula –
Substituted by
IT (Am) Act 2015 70 – 1500/X
where X is the number of the percentage points represented by the ration

of the chargeable income of the mining company for the year of income
to the gross revenue of the company for that year.
- 147 -
3. If the rate of tax calculated under paragraph 2 exceeds 45%, then the rate
of tax shall be 45%.
4. If the rate of tax calculated under paragraph 2 is less than 25%, then the
rate of tax shall be 25%.
5. In this Part –
(a) “gross revenue”, in relation to a mining company for a year of

income, means –
(i) the amount shown in the recognised accounts of the company

as the gross proceeds derived in carrying on of mining
operations during the year of income, including the gross
proceeds arising from the disposal of trading stock, without
deduction for expenditures or losses incurred in deriving that
amount; and
(ii) the amount, if any, shown in the recognised accounts of the

taxpayer as the amount by which the sum of the gains derived
by the taxpayer during the year of income from the disposal of
business assets used or held ready for use in mining operations,
other than trading stock, exceeds the sum of losses incurred by
the taxpayer during the year in respect of the disposal of such
assets; and
(b) “mining company” means a company carrying on any mining

operations in Uganda.
S.8
Part III
Income Tax Rate for Trustees and Retirement Funds
The income tax rate applicable to trustees and retirement funds for the
purposes of Section 8 is 30%.
Ss.82, 83, 84 & 85

Part IV
Income Tax Rate for Non-Resident Persons
1. The income tax rate applicable to a non-resident person under Section

Inserted by 82, 83, 84 or 85 excluding interest on government securities is 15 per cent.
IT (Am) Act 2013
- 148 -
2. The withholding tax applicable for interest payments on government securities to

a non-resident person under section 83 is 20 per cent;
Ss.117 & 118

Part V
Withholding Tax rate for Interest and Dividends for Resident Persons
1. The withholding tax rate applicable for interest and dividend payments to
Inserted by a resident person under Sections 117 and 118, excluding interest on
IT (Am) Act 2012
government securities, is 15%.
2. The withholding tax rate applicable for dividend payments from

Inserted by
IT (Am) Act 2006
companies listed on the stock exchange to individuals under Section 118
is 10%.
3. The withholding tax rate applicable for interest payments on government

Inserted by
IT (Am) Act 2012
securities to a resident person under section 117 is 20%.
Sec.6 (2)
Part VI
Rate of Rental Tax
Substituted by
The rate of tax applicable to an individual for the purposes of Section
IT (Am) Act 2012 6(2) is 20% of the chargeable income in excess of shs.2,820,000
[1,560,000].
S.86 (2)
Part VII
Rate of Tax applicable to Shipping and Aircraft Income
The rate of tax applicable to shipping and aircraft income under Section
86(2) is 2%.
Ss.118A, 118B & 119

Part VIII
Substituted by
IT (Am) Act 2005 & Withholding Tax Rate for Goods and Services Transactions
IT (Am) Act 2013
1. The withholding tax rate applicable for goods and services transactions
and for imported goods under Sections 118A and 119 is 6%.
- 149 -
2. The withholding tax rate for purposes of section 118B is 10% of the gross
payment”.
S.89B, 89G, 89GG

Parts IX, IXA & IXB Inserted by Part IX
IT (Am) Act 2010 W.E.F 7/97.
Tax Rates for Licensees and Contractors
1. The income tax rate applicable to a licensee under section 89B is 30%.
2. The income tax rate applicable to a licensee under section 89G is 30%.
3. The rate of non-resident contractor tax under section 89GG is 10%”;
S.89H (1)
Part IX A
Income Tax Rate for Resident Contractors
The income tax rate payable on a participation dividend paid by a resident

contractor to a non-resident company is 15%.
S.89H (2)
Part IX B
Income Tax Rate for Non-Resident Subcontractors
The income tax rate payable by a non-resident subcontractor deriving income

under a Uganda sourced services contract is 15%.
S.118C
Inserted by IT (Am) Act 2014
and (Am 2) Act 2017
Part X
Withholding tax rate for winnings from sports betting and pool betting
The withholding tax rate applicable to winnings from sports betting and pool
betting is 15%.
S.118D
Substituted by IT (Am) Act 2015 Part XI
Withholding tax on payments of re-insurance premiums
The withholding tax rate for purposes of section 118D is 10% [15%]
- 150 -
FOURTH SCHEDULE
S.16
Chargeable Income arising from short-term Insurance Business
1. The chargeable income of a resident person for a year of income arising

from the carrying on of a short-term insurance business is determined
A–B
where –
A is the total income derived by the resident person for the year of
income in carrying on a short-term insurance business as
determined under paragraph 2; and
B is the total deduction allowed for the year of income in the

production of income referred to in A as determined under
paragraph 3.
2. The total income derived by a resident person for a year of income in

carrying on a short-term insurance business is the sum of –
(a) the amount of the gross premiums, including premiums on

reinsurance, derived by the person during the year of income in
carrying on such a business in respect of the insurance of any risk,
other than premiums returned to the insured;
(b) the amount of any other income derived by the person during the
year of income in carrying on such a business, including any
commission or expense allowance derived from reinsurers, any
Substituted by
IT (Am) Act 2002 income derived from investments held in connection with such a
business and any gains derived on disposal of assets of the business;
and
(c) the amount of any reserve deducted in the previous year of income
under paragraph 3(d).
3. The total deduction allowed for a year of income in the production of

income from the carrying on of a short-term insurance business is the sum
of –
(a) the amount of the claims admitted during the year of income in the
carrying on of such a business, less any amount recovered or
recoverable under any contract of reinsurance, guarantee, security
or indemnity;
- 151 -
(b) the amount of agency expenses incurred during the year of income
in the carrying on of such a business;
(c) the amount of expenditures and losses incurred by the person

during the year of income in carrying on that business which are
allowable as a deduction under this Act, other than expenditures
or losses referred to in paragraphs (a) and (b); and
(d) the amount of a reserve for unexpired risks referable to such a

business at the percentage adopted by the company at the end of
the year of income.
4. Where, for any year of total income, the total deduction allowed to a
person under paragraph 3 exceeds the income derived by the person as
determined under paragraph 2, the excess may not be deducted against
any other income of the person for the year of income, but shall be carried
forward and deducted in determining the chargeable income of the person
arising from the carrying on of a short-term insurance business in the next
year of income.
5. The chargeable income of a non-resident person for a year of income

arising from the carrying on of a short-term insurance business in Uganda
is determined according to the following formula –
A-B
where –
A is the total income derived by the person for the year of income in
carrying on a short-term insurance business as determined under
paragraph 6; and
B is the total deduction allowed for the year of income in the

production of income referred to in A as determined under
paragraph 7.
6. The total income derived by a non-resident person for a year of income in

carrying on a short-term insurance business in Uganda is the sum of –
(a) the amount of the gross premiums, including premiums on

reinsurance, derived by the person during the year of income in
carrying on such a business in respect of the insurance of any risk
in Uganda, other than premiums returned to the insured;
- 152 -
(b) the amount of any other income derived by the person during the
year of income in carrying on such a business in Uganda
including:–
(i) any commission or expense allowance derived from

reinsurance of risks accepted in Uganda;
(ii) any income derived from investment of the reserves referable

to such business carried on in Uganda; and
(iii) any gains derived on disposal of assets of the business, and
(c) the amount of any reserve deducted in the previous year of income
under paragraph 7(d).
7. The total deduction allowed for a year of income in the production of

income from the carrying on of a short-term insurance business in
Uganda by a non-resident person is the sum of –
(a) the amount of the claims admitted during the year of income in the
carrying on of such a business, less any amount recovered or
recoverable under any contract of reinsurance, guarantee, security
or indemnity;
(b) the amount of agency expenses incurred during the year of income
in the carrying on of such a business;
(c) the amount of expenditures and losses incurred by the person

during the year of income in carrying on that business which are
allowable as a deduction under this Act, other than expenditures
or losses referred to in paragraphs (a) and (b); and
(d) the amount of a reserve for unexpired risks in Uganda referable to

such a business at the percentage adopted by the company at the
end of the year of income.
8. Where, for any year of total income, the total deduction allowed to a
person under paragraph 7 exceeds the income derived by the person as
determined under paragraph 6, the excess may not be deducted against
any other income of the person for the year of income, but shall be carried
forward and deducted in determining the chargeable income of the person
arising from the carrying on of a short-term insurance business in Uganda
in the next year of income.
- 153 -
FIFTH SCHEDULE
S.19(3)
Valuation of Benefits
1. The valuation of benefits for the purposes of Section 19(3) of this Act shall
be determined in accordance with this schedule.
2. For the purposes of this Schedule, a benefit provided by an employer to

an employee means a benefit that –
(a) is provided by an employer, or by a third party under an

arrangement with the employer or an associate of the employer;
(b) is provided to an employee or to an associate of an employee; and
(c) is provided in respect of past, present or prospective employment.
3. Where a benefit provided by an employer to an employee consists of the

use, or availability for use, of a motor vehicle wholly or partly for the
private purposes of the employee, the value of the benefit is calculated
(20% x A x B/C) – D
where –
A is the market value of the motor vehicle at the time when it was
first provided for the private use of the employee, depreciated on a
Substituted by
IT (Am 2) Act 2017
reducing balance basis at a rate of 35% per annum for the subsequent
years;
B is the number of days in the year of income during which the

motor vehicle was used or available for use for private purposes by
the employee for all or a part of the day;
C is the number of days in the year of income; and
D is any payment made by the employee for the benefit.

provision of a housekeeper, chauffeur, gardener or other domestic
assistant, the value of the benefit is the total employment income paid to
the domestic assistant in respect of services rendered to the employee,
reduced by any payment made by the employee for the benefit.
- 154 -

provision of any meal, refreshment or entertainment, the value of the
benefit is the cost to the employer of providing the meal, refreshment or
entertainment, reduced by any consideration paid by the employee for the
meal, refreshment or entertainment.

provision of utilities in respect of the employee’s place of residence, the
value of the benefit is the cost to the employer of providing the utilities
reduced by any consideration paid by the employee for the utilities.
7. Where a benefit provided by an employer to an employee consists of a

loan or loans in total exceeding one million shillings at a rate of interest
below the statutory rate, the value of the benefit is the difference between
the interest paid during the year of income, if any, and the interest which
would have been paid if the loan had been made at the statutory rate for
the year of income.
8. Where a benefit provided by an employer to an employee consists of a

waiver by an employer of an obligation of the employee to pay or repay
an amount owing to the employer or to any other person, the value of the
benefit is the amount waived.

Substituted by
transfer or use of property or the provision of services, the value of the
IT (Am) Act 2002 benefit is the market value of the property or services at the time the benefit is
provided, reduced by any payment made by the employee for the benefit.

provision of accommodation or housing, other than where Section
19(1)(a) or (c) applies, the value of the benefit is the lesser of –
(a) the market rent of the accommodation or housing reduced by any

payment made by the employee for the benefit; or
(b) 15% of the employment income, including the amount referred to

in paragraph (a), paid by the employer to the employee for the year
of income in which the accommodation or housing was provided.
11. The value of any benefit provided by an employer to an employee which

Substituted by is not covered by the above clauses is the market value of the benefits, at the
IT (Am) Act 2002 time the benefit is reduced by any payment made by the employee for the
benefit.
- 155 -
12. Paragraph 11 does not apply to any benefit expressly covered by Section
19(1)(a) or (c) to (h).
13. In this Schedule, “statutory rate”, in relation to a year of income, means

the Bank of Uganda discount rate at the commencement of the year of
income.
- 156 -
SIXTH SCHEDULE
Ss.27, 28, 29
Depreciation Rates and Vehicle Depreciation Ceiling
Part I
Declining Balance Depreciation Rates for Depreciable Assets
CLASS ASSETS INCLUDED RATE
1 Computers and data handling equipment 40%
Automobiles; buses and mini-buses with a seating capacity

of less than 30 passengers; goods vehicles with a load
2 35%
capacity of less than 7 tonnes; construction and earth
moving equipment.
Substituted Buses with a seating capacity of 30 or more passengers;

by IT (Am)
Act 2002 goods vehicles designed to carry or pull loads of 7 tonnes or
3 more; specialised trucks; tractors; trailers and trailer-
30%
mounted containers; plant and machinery used in
farming, manufacturing or mining operations.
Rail cars, locomotives and equipment; vessels, barges,

tugs and similar water transportation equipment; aircraft;
4 specialised public utility plant, equipment and machinery; 20%
office furniture, fixtures and equipment; any depreciable
asset not included in another class.
Part II
Vehicle Depreciation Ceiling
The amount for the purposes of Section 27(11) is shs. 60,000,000 [30,000,000]
Part III
Straight-line Depreciation Rate for Industrial Buildings
The depreciation rate for the purposes of Section 29 is 5%.
- 157 -
Part IV
Prescribed Areas
The following areas are prescribed for the purposes of Section 28: - Kampala,
Entebbe, Namanve, Jinja and Njeru.
SEVENTH SCHEDULE
S. 2
Currency Point
One currency point is equivalent to twenty thousand (20,000) Uganda

shillings.
__________________
Repealed by IT (Am) Act 2015 EIGHTH SCHEDULE
S.89Q
Classification, Definition and Allocation of Costs and Expenditures
Cross References
Building Societies Act, Cap. 108

Constitution, 1995
Diplomatic Privileges Act, Cap. 201
Income Tax Decree, Decree 1/1974
Investment Code, Statute 1/1991
Local Governments Act, Cap. 243
Magistrates Courts Act, Cap.16
Mining Act, Cap. 148
Petroleum (Exploration & Production) Act, Cap.150
Petroleum (Exploration, Development & Production) Act, 2013
Petroleum (Refining, Conversion, Transmission & Midstream) Act, 2013
Uganda Revenue Authority Act, Cap. 196
- 158 -
Statutory Instruments ITA
THE INCOME TAX (WITHHOLDING TAX)
REGULATIONS 2000
(Under Section 116(1) and 164 of the Income Tax Act, 1997 Cap.340)
In exercise of the powers conferred upon the Minister by Section 164 of the
Income tax Act 1997, these Regulations are made this 1st day of June 2000.
1. Short Title and Commencement
These Regulations may be cited as the Income Tax (Withholding Tax)

Regulations, 2000, and shall be deemed to have come into force on the
1st day of July 2000.
2. Interpretation
(1) In these Regulations, “Act” means the Income Tax Act, 1997.
(2) Terms and expressions used in these Regulations have, unless the
contrary intention appears, the same meaning as they have in the Act.
3. Amount of Tax to be Withheld
(1) Every employer obliged under Section 116 of the Act to withhold tax
from a payment of employment income to an employee shall withhold
tax in accordance with this regulation.
(2) Subject to sub-regulation (10), where employment income is paid

monthly by an employer to an employee and the employee has
furnished the employer with an employee declaration, the amount of
tax to be withheld from the payment for a month (referred to as the
“current month”) is calculated according to the following formula –
(A – B)/C
where –
A is the amount of tax payable calculated –
(a) in the case of an employee who is a resident individual, in

accordance with paragraph 1 of Part I of the Third
Schedule to the Act on the annualised employment
- 159 -
income of the employee calculated in accordance with

sub-regulation (3); and
(b) in the case of an employee who is a non-resident person,

in accordance with paragraph 2 of Part I of the Third
schedule to the Act on the annualised employment
sub-regulation (3);
B the amount of tax withheld from payments made to the

employee in the previous months of the year of income; and
C is the number of months remaining in the year of income,

including the current month.
(3) The annualised employment income of an employee for the purposes of

component A of the formula in sub-regulation (2) is calculated in
accordance with the following formula -
(D + E) x 12/F
where –
D is the amount of employment income paid by the employer

to the employee in the current month;
E is the amount of employment income paid by the employer

to the employee in the previous months of the year of
income; and
F is the number of completed months in the year of income,

including the current month.

fortnightly by an employer to an employee and the employee has
furnished the employer with an employee declaration, the amount of
tax to be withheld from a payment for a fortnight (referred to as the
“current fortnight”) is calculated according to the formula –
(A-B) C
where –
A is the amount of tax payable calculated -
- 160 -
(a) in the case of an employee who is a resident individual, in

accordance with paragraph 1 of Part I of the Third
Schedule to the Act on the annualised employment income
of the employee calculated in accordance with sub
regulation (5); or
(b) in the case of an employee who is a non-resident

individual, in accordance with paragraph 2 of Part I of the
Third Schedule to the Act on the annualised employment
income of the employee calculated in accordance with sub-
regulation (5);
B is the amount of tax withheld from payments made to the

employee in the previous fortnights of the year of income; and
C is the number of remaining fortnights in the year of income,

including the current fortnight.

component A of the formula in sub-regulation (4) calculated in
accordance with the following formula-
(D+E) x 26/F
where –
D is the amount of employment income paid by the employer to

the employee in the current fortnight;
E is the amount of employment income paid by the employer to

the employee in the previous fortnights of the year of income;
and
F is the number of completed fortnights in the year of income,

including the current fortnight.

weekly by an employer to an employee and the employee has furnished
the employer with an employee declaration, the amount of tax to be
withheld from a payment for a week (referred to as the “current week”)
is calculated according to the following formula:–
(A-B)/C
- 161 -
where –
A is the amount of tax payable calculated –
(a) in the case of an employee who is a resident individual,

in accordance with paragraph 1 of Part I of the Third
Schedule to the Act on the annualised employment
sub-regulation (7); or
(b) in the case of an employee who is a non-resident

individual, in accordance with paragraph 2 of Part I of
the Third Schedule to the Act on the annualised
employment income of the employee calculated in
accordance with sub-regulation (7);
B is the amount of tax withheld from payments made to the

employee in the previous weeks of the year of income; and
C is the number of remaining weeks in the year of income,

including the current week.

component A of the formula in sub-regulation (6) is calculated in
accordance with the following formula –
(D + E) x 52/F
where –
D is the amount of employment income paid by the

employer to the employee in the current week;
E is the amount of employment income paid by the

employer to the employee in the previous weeks of the
year of income; and
F is the number of completed weeks in the year of income,

including the current week.
(8) An employer shall notify the Commissioner, in writing, where the

employer pays employment income to an employee on a basis other
than monthly, fortnightly, or weekly.
- 162 -
(9) An employer shall notify the Commissioner, in writing, of any change,

during a year of income, to the period of payment of employment
income to an employee who has furnished an employee declaration to
the employer.
(10) Where a notification has been made under sub-regulation (8) or (9), the
Commissioner shall advise the employer, by notice in writing, of the
amount of tax to be withheld by the employer from the employment
income paid by the employer to the employee.
(11) Subject to sub-regulation (13), where an employee has not furnished an

employer with an employee declaration under regulation 4, the amount
of tax to be withheld from a payment of employment income for any
period shall be the standard withholding amount.
(12) An employee who has not furnished an employer with an employee

declaration may apply, in writing, to the Commissioner for a statement
of the amount of tax to be withheld by the employer from the
employment income paid by the employer to the employee.
(13) After considering the application under sub-regulation (1), the

Commissioner may, if he or she considers it appropriate, issue the
employee with a statement of the amount of tax to be withheld by the
employer from the employment income paid by the employer to the
employee, and the employee shall furnish the statement to his or her
employer and the employer shall withhold tax from payments of
employment income to the employee in accordance with the statement.
(14) Where a change occurs in the circumstances affecting the amount of

withholding tax specified in a statement referred to in sub-regulation
(13), the employee to whom the statement has been issued shall, by
notice in writing within seven days of the change occurring, notify the
Commissioner of any change occurring and the Commissioner shall
issue a new statement accordingly.
(15) In this regulation –
(a) a fortnight is a “completed fortnight”, “previous fortnight” or

“remaining fortnight”, in relation to a year of income, if the pay
day for the fortnight occurs during the year of income;
(b) a week is an “completed week”, “previous week”, or “remaining

week”, in relation to a year of income, if the pay day for the week
occurs during the year of income; and
- 163 -
(c) “standard withholding amount”, in relation to payment of

employment income to an employee, means
AxB
where –
A is the highest marginal rate specified in the rates of tax

in the relevant paragraph of Part I of the Third
Schedule; and
B is the amount of employment income paid to the

employee.
4. Employee Declaration
(1) Subject to sub-regulation (2), an employee shall furnish an employee

declaration to his or her employer for each year of income.
(2) Where an employee has more than one employer at any time during the
year of income, the employee shall furnish an employee declaration to
only one employer.
(3) An employee declaration shall be-
(a) in the form prescribed by the Commissioner;
(b) signed and dated by the employee; and
(c) furnished to the employer –
(i) unless the Commissioner provides otherwise, by 1 July of

the year of income to which the declaration relates; or
(ii) where the employee takes up employment during the year

of income, within seven days after the date on which the
employment commenced.
5. Secondary Employment Form
(1) Where an employee has more than one employer at any time during a
year of income, the employee shall furnish a secondary employment
form to each employer other than the employer to whom an employee
declaration has been furnished under regulation 4.
- 164 -
(2) A secondary employment form shall be –
(a) in the form prescribed by the Commissioner, and
(b) signed and dated by the employee.
(3) A secondary employment form shall be furnished to the employer –
(a) unless the Commissioner provides otherwise, by 1 July of the year

of income to which the form relates; or
(b) where the employee takes up employment during the year income,
within seven days after the date on which the employment
commenced.
6. Declarations and Secondary Employment Forms
(1) An employee declaration or a secondary employment form applies only

to amounts of tax to be withheld after the date on which the declaration
or form is furnished to the employer and continues in force until –
(a) withdrawn by the employee by notice in writing to the employer;
(b) the end of the year of income to which the declaration or form
relates; or
(c) the employee ceases to be in the employment of the employer to

whom the declaration or form has been furnished, whichever is
the earlier.
(2) Where, after furnishing an employee declaration to an employer, a

change occurs in the circumstances affecting the amount of withholding
tax calculated under regulation 3, the employee shall, by notice in
writing within seven days after the change occurring, withdraw the
declaration and furnish the employer with a new declaration.
(3) An employer shall maintain and keep available for a period of five
years, employee declarations and secondary employment forms
furnished by employees under regulations 4 and 5 for inspection by the
Commissioner.
- 165 -
7. Change of Employment Certificate
(1) An employer shall issue to each employee who leaves the employer’s
employment during the year of income, a change of employment
certificate setting out –
(a) the amount of employment income paid by the employer to the

employee during the year of income;
(b) the amount of tax withheld under Section 116 of the Act by the
employer from that income; and
(c) the period of the year of income that the employee was employed
by the employer.
(2) A change of employment certificate shall be issued to the employee at

the time that the employee leaves the employer’s employment.
(3) An employee who receives a change of employment certificate shall

furnish the certificate to his or her new employer within seven days after
he or she commences the new employment.
(4) An employer who has been furnished with a certificate under sub-
regulation (3) shall take the amounts set out in the certificate into
account in applying regulation 3 to the employment income paid to the
employee for the year of income to which the certificate relates.
8. Tax Credit and Employee Withholding Certificate
(1) This regulation applies to the issue of tax credit certificates under
Section 125(1) of the Act and employee withholding certificates under
Section 125(3) of the Act.
(2) A withholding agent who is required to issue a tax credit certificate or

employee withholding certificate to a payee shall sign the certificate and
shall issue it by –
(a) causing it to be delivered to the payee personally; or
(b) posting it by prepaid letter addressed to the payee’s last known

postal address.
(3) Where a tax credit certificate or employee withholding certificate which

has been posted in accordance with this regulation is returned to the
- 166 -
withholding agent undelivered, the withholding agent shall forward the

certificate to the Commissioner within seven days after the date on
which the certificate was returned to the withholding agent.
(4) A payee whose tax credit certificate or employee withholding certificate

has been lost, stolen or destroyed, may request in writing that the
withholding agent issue a duplicate certificate.
(5) Where a request has been made under sub-regulation (4), the
withholding agent shall comply with the request and the certificate so
issued shall be clearly marked “duplicate”.
(6) The personal representative of a payee who dies during the year of
income may apply, in writing, to the withholding agent of the deceased
payee for a tax credit certificate or employee withholding certificate in
respect of that part of the year of income prior to the death of the payee.
(7) A payee who intends to cease to be a resident person may apply in

writing, to his or her withholding agent for a tax credit certificate or
employee withholding certificate in respect of that part of the year of
income prior to the payee ceasing to be a resident person.
(8) Where an application has been made under sub-regulation (6) or (7), the
withholding agent shall issue the personal representative or payee with
the certificate within seven days after the application is made.
(9) A withholding agent who ceases to carry on business shall issue a tax
credit certificate or employee withholding certificate to each payee prior
to ceasing business.
9. Offences
(1) An employee who fails to notify any change in circumstances as

required by regulation 3(14) commits an offence and is liable on
conviction to a fine not exceeding twenty five currency points.
(2) An employee who furnishes an employee declaration to an employer in

contravention of regulation 4(2) commits an offence and is liable on
conviction to a fine not exceeding twenty five currency points.
(3) An employer who fails to maintain employee declarations and

secondary employment forms as required under regulation 6(3) commits
an offence and is liable on conviction to a fine not exceeding twenty five
currency points.
- 167 -
(4) An employer who fails to issue a change in employment certificate as

required by regulation 7 commits an offence and is liable on conviction
to a fine not exceeding twenty currency points.
(5) A withholding agent who fails to issue a tax credit certificate or

employee withholding certificate as required by regulation 8 commits an
offence and is liable on conviction to a fine not exceeding twenty five
currency points.
History: S.I 52/2000
__________________
- 168 -
Statutory Instrument No.9 of 2003
THE INCOME TAX (APPROVED INDUSTRIAL

BUILDINGS) REGULATIONS, 2003
(Under Section 29 and 164 of the Income Tax Act, 1997 Cap. 340)
In exercise of the powers conferred upon the Minister by Section 164 of the
Income Tax Act 1997, these Regulations are made this 31st day of October
2002.
1. Citation
These Regulations may be cited as the Income Tax (Approved Industrial

Buildings) Regulations, 2003.
2. Commencement and Application
(1) Regulations 4 and 5 shall be deemed to have come into force on 1st July
1997 and apply to an approved hotel or approved hospital whose
construction commenced on or after 1/7/1997.
(2) Regulation (6) shall be deemed to have come into force on 1st July 2000
and applies to an approved commercial building whose construction
commenced on or after 1st July 2000.
3. Approval of Industrial Buildings
For the purposes of Section 29 of the Act, the industrial buildings referred to
in regulations 4, 5 and 6 are approved for the purposes specified in those
regulations.
4. Approved Hotel
An approved hotel is an industrial building licensed by the appropriate

authorities for use, at a price, for boarding and lodging with at least –
(a) ten bedrooms with minimum facilities of bed and bedding, toilet and
bath or shower room; and
(b) restaurant or dining room for provision of food and beverages.
- 169 -
5. Approved Hospital
An approved hospital is a specialised institutional industrial building manned

by a fully registered specialist and general practitioner for the purpose of
treating general patients as outpatients or inpatients, or both, for medical,
paediatric, surgical and obstetric or gynaecological conditions, providing
treatment and nursing care and equipped with equipment and facilities for
specialised establishment.
6. Approved Commercial Building
(1) An approved commercial building is an industrial building which is

primarily used by the owner or let out for rent –
(a) for the purpose of carrying on a business, trade or profession;
(b) as an office;
(c) as a warehouse or commercial storage facility; or
(d) as a workshop.
(2) For the avoidance of doubt, an approved commercial building does not
include a building let out or used for residential accommodation.
- 170 -
THE INCOME TAX (TAX INCENTIVES FOR EXPORTERS

OF FINISHED CONSUMER AND CAPITAL GOODS)
REGULATIONS, 2009
(Under sections 21 (1)(y)(ab) and 164 of the Income Tax Act, Cap.340)
ARRANGEMENT OF REGULATIONS
Regulation
1. Title
2. Commencement and application
3. Interpretation
4. Application and grant of certificate of Entitlement to Exemption
5. Validity of Certificate of Entitlement to Exemption
6. Conditions for grant of exemption
7. Obligations of the certificate holder
8. Revocation of the Certificate of Entitlement to Exemption
9. Appeals
10. Records
11. Filing returns
12. Register
SCHEDULE
FORMS
=============================
IN EXERCISE of the powers conferred upon the Minister by sections

21(1)(y)(ab) and 164 of the Income tax Act, Cap. 340, these Regulations are
made this 11th day of May, 2009.
1. Title
These Regulations may be cited as the Income Tax (Tax Incentives for
Exporters of Finished Consumer and Capital Goods) Regulations, 2009.
- 171 -
2. Commencement and Application
These Regulations shall be deemed to have come into force on 1st July 2007
and apply to persons engaged in the exportation of finished consumer and
finished capital goods.
3. Interpretation
In these Regulations, unless the context otherwise requires –
“Authority” means the Uganda Revenue Authority;
“Commissioner” means the Commissioner General appointed under the

Uganda Revenue Authority Act;
“existing investment” means an investment that was in existence as at 1st

July, 2007;
“export” means to take or cause to be taken out of the partner states;
“finished capital goods” means goods other than finished Consumer goods
that may be used in the production process;
“finished consumer goods” means finished consumer products ready for

consumption without the need for further processing; and in the case of
flower exports includes potted plants and chrysanthemum cuttings;
“goods” includes all kinds of articles, wares, merchandise, livestock, and

currency;
“investment” means the creation of new business assets and includes the
expansion, restructuring or rehabilitation of an existing business enterprise;
“manufacturing” means the substantial transformation of tangible movable

property, including power generation and water supply;
“manufacturing under bond” means a facility extended to manufacturers to

import plant, machinery, equipment and raw materials tax free, exclusively
for use in the manufacture of goods for export;
“Minister” means the Minister responsible for finance;
“new investment” means an investment that did not exist as at 1st July, 2008;
- 172 -
“production” means a process involving the use of inputs to derive outputs

including manufacturing, growing or extraction.
4. Application and Grant of Certificate of Entitlement to Exemption
(1) A person seeking tax exemption on income derived from the export of
finished consumer goods and finished capital goods under section
21(1)(y) of the Act shall apply for a Certificate of Entitlement to
Exemption in Form 1 set out in the Schedule to the Regulations.
(2) The applicant under sub regulation (1) shall state in the application-
(a) his or her name and address;
(b) the description of the goods;
(c) the tax identification number;
(d) telephone and e-mail contact;
(e) the details of directors;
(f) a declaration that the applicant will export or intends to export at

least eighty per cent (80%) of his or her production of finished
consumer goods and finished capital goods during the year,
whether or not the raw materials are from within Uganda;
(g) details of the manufacturing or production of goods process

including graphic presentation of the manufacturing process where
applicable.
(3) The Commissioner may request for additional information to ascertain

whether a person qualifies for a grant of a Certificate of Entitlement to
Exemption, to verify the existence of the investment.
(4) The Commissioner shall, based on the information provided, decide

whether or not to grant a certificate of Entitlement to Exemption, and
on ascertainment of the existence of an investment, make a decision
within thirty working days.
(5) A person who qualifies under sub-regulation (4) shall be issued with a
certificate of entitlement to exemption in Form 2 set out in the schedule
to these Regulations.
- 173 -
(6) A certificate of entitlement to exemption under these Regulations shall

be specific to a person and the income derived from activities resulting
in exports.
(7) Where the Commissioner refuses to grant a certificate of entitlement to

exemption, the Commissioner shall state in writing the reasons for the
refusal.
5. Validity of Certificate of Entitlement to Exemption
(1) Subject to subsection (2), a certificate of entitlement to exemption is

valid for a period of ten years starting from the date on which it is
issued.
(2) Notwithstanding subsection (1), an exporter is only eligible for the tax
exemption in any year in which the exporter fulfils the conditions for
the tax exemption specified in Regulation 6.
(3) Where the exporter fails to fulfil the conditions for the tax exemption
for a particular year, the tax exemption shall not be granted for that
year.
6. Conditions for Grant of Certificate of Entitlement to Exemption
A certificate of entitlement to exemption on income derived from export of

finished consumer goods and finished capital goods shall not be granted to an
applicant unless the applicant –
(a) keeps proper books of accounts and records required under Regulation
10; and
(b) exports at least eighty per cent (80%) of his or her production of finished
consumer goods and finished capital goods of goods during the year,
whether or not the raw materials are from within Uganda.
7. Obligations of the Certificate Holder
The holder of the Certificate of Entitlement to Exemption shall, during the

period of the tax incentives –
(a) comply with the obligations imposed by the Income Tax Act, Cap. 340;
(b) keep proper books of accounts and records as required by Regulation 7;
- 174 -
(c) export eighty per cent (80%) of the finished consumer goods or finished
capital goods produced by him or her;
(d) not transfer the Certificate of Entitlement to Exemption to another

person.
8. Revocation of Certificate of Entitlement to Exemption
(1) The Commissioner may revoke a Certificate granted under these

Regulations where he or she is satisfied that –
(a) there has been a breach of the terms under which the certificate is
granted;
(b) there has been a breach of a condition attached to the certificate;
(c) the application for the Certificate of Entitlement to Exemption

was defective in that the holder misrepresented him/herself and
failed to rectify the defect within forty five days after being
requested to do so;
(d) the holder is bankrupt;
(e) the holder has failed to submit the required information for two
years consecutively;
(f) the holder knowingly or negligently gives false or misleading

information to the Authority;
(g) the holder refuses or neglects to provide information which the

Authority may reasonably require for the purposes of the
enforcement of these Regulations;
(h) the holder refuses or neglects to keep proper books of accounts; or
(i) the holder refuses without lawful excuse to admit an officer or an

agent of the Authority, after being given reasonable notice, into
the premises of his or her business enterprise or otherwise
obstructs any inspection by an officer or agent of the Authority in
the discharge of its monitoring function.
(2) The Commissioner shall before revoking a certificate under subsection

(1) give not less than thirty days’ written notice of the intention to
revoke the certificate to the holder of the certificate and shall consider
- 175 -
any written representations made to the holder of the certificate to the

Commissioner within that time.
9. Appeals
(1) A person aggrieved by a decision of the Commissioner may appeal to

the Minister by giving written notice to the authority against –
(a) the refusal of the authority to grant a certificate under these

regulations ;
(b) the attaching of a condition to a certificate; or
(c) the revocation of the certificate.
(2) An appeal under this Regulation shall be in writing to the Minister

within thirty days after the receipt of the decision of the Authority and
the appellant shall give notice of the appeal to the Authority.
(3) The Minister shall consider an appeal under this regulation and may –
(a) dismiss the appeal;
(b) require the authority to issue a certificate to the appellant;
(c) quash the revocation of a certificate; or
(d) permit the appellant to make a fresh application for a certificate

notwithstanding that the period prescribed for applications has
expired and the Authority shall give effect to the determination of
the Minister.
10. Records
(1) The holder of a Certificate of Entitlement of Exemption shall maintain

records of –
(a) inputs for the exports business;

(b) export sales;
(c) export documents;
(d) goods that have been warehoused;
(e) goods that have been produced;
- 176 -
(f) local sales; and

(g) any other records as may be required by the Commissioner.
11. Filing of returns
(1) The holder of a Certificate of Entitlement to Exemption shall submit an

annual return to the Authority, showing a summary of receipts and
exports and the return shall contain the following information –
(a) stock at hand at the beginning of the year;
(b) total receipts into the company warehouse;
(c) total annual production;
(d) stock carried forward to the next year; and
(e) total sales in the local market and total sales exported.
(2) The return shall be submitted annually together with the final return of
income.
12. Register
(1) The Authority shall maintain a register of all the certificates granted
under these Regulations.
(2) The Authority shall cause to be entered in the register in respect of each
certificate –
(a) the name of the business enterprise to which the certificate was
granted;
(b) the principal place of business of the certificate holder; and
(c) the activities to which the certificate relates.
- 177 -
SCHEDULE
Regulation 4(1)
FORMS
FORM 1
Application for a Certificate of Entitlement to Exemption

(Under section 21 and 164 of the Income Tax Act, 1997 Cap. 340)
Please enter the information requested in the spaces provided. Please note that any
additional information should be attached to this application form.
Business Details:
Name (Company or individual)….....................................................

TIN...................................................................................................
Parent Company (If applicable)..........................................................
Address (Postal and Physical)............................................................
Contact Telephone Number...............................................................
E-Mail address ..................................................................................
Directors Details (Names and contacts ..............................................
Nature of goods to be manufactured for export...................................
DECLARATION:
I ………………………………………………………………declare that I am
exporting or intend to export at least eighty per cent (80%) of my production
of finished capital goods or finished consumer goods during the year.
Completed by:
Name ……………………………………. Title…………………
Signature………………….………………. Date…………………
Official Comments.
Details of Verifications and Recommendations:
Verification officer’s Signature....................

Date...........................
Supervisor’s Signature.................................
Date...........................
- 178 -
FORM 2:
Regulation 4 (5)
Certificate of Entitlement to Exemption
This Certificate of Entitlement to Exemption is issued under section 21 and 164 of the
Income Tax Act, Cap. 340.
Name of Business:................................................................................
Address:.................................................................................................
Physical Location:.................................................................................
Nature of Business:................................................................................
Tax Incentives: Exemption from Corporation Tax and Withholding Tax.
The certificate is valid from……...........…........ to……......................
Note:
1. The holder of this Certificate of Entitlement to Exemption shall comply

with the requirements of section 21 of the Income Tax Act Cap.340 and
these Regulations.
2. The Commissioner may revoke the Certificate if satisfied that there has
been a breach of the terms under which the certificate is granted or on a
breach of a condition attached to the certificate or if the holder of the
certificate is convicted of an offence under the Income Tax Act or other
relevant law.
.........................................................
Commissioner
- 179 -
THE INCOME TAX (TRANSFER PRICING)

REGULATIONS, 2011
(Under sections 90 and 164 of the Income Tax Act cap 340)
IN EXERCISE of the powers conferred upon the Minister by section 164 of

the Income Tax Act Cap. 340, these Regulations are made this 20th day of
June 2011.
Regulation
PART I—PRELIMINARY
1. Title and commencement

2. Application of regulations
3. Interpretation
PART II—COMPARTIBILITY FACTORS, BRANCH PERSON AND

OECD DOCUMENTS
4. Compatibility factors
5. Branch person and headquarter person
6. Application of OECD documents
PART III—CONSISTENCY WITH ARM’S LENGTH PRINCIPLE,

DOCUMENTATION, ADVANCED PRICING AGREEMENTS AND
CORRESPONDING ADJUSTMENTS
7. Consistency with arm’s length principles

8. Documentation
9. Advanced pricing agreements
10. Corresponding adjustments
1. Title and commencement
These Regulations may be cited as the Income Tax (Transfer Pricing)

Regulations 2011, and shall come into force on the 1st day of July 2011.
- 180 -
2. Application of Regulations
The Regulations shall apply to a controlled transaction if a person who is a

party to the transaction is located in and is subject to tax in Uganda and the
other person who is a party to the transaction is located in or outside Uganda.
3. Interpretation
In these Regulations, unless the context otherwise requires –
“Act” means the Income Tax Act;
“arm’s length principle” in relation to a controlled transaction, means the

results of the transaction are consistent with the results that would have been
realised in a transaction between independent persons dealing under the same
conditions;
“associate” has the meaning given to it in section 3 of the Act;
“branch” in relation to a person –
(a) where there is a tax treaty applicable to the person, means a

permanent establishment as defined in the treaty; or
(b) in any other case, has the meaning given to it in section 78 of the
Act;
“comparability factors” means the factors specified in regulation 4;
“comparable uncontrolled price method” means comparing the price charged

in a controlled transaction with the price charged in a comparable
uncontrolled transaction;
“comparable uncontrolled transaction” in relation to the application of a

transfer pricing method to a controlled transaction, means an uncontrolled
transaction which, after taking account of the comparability factors, satisfies
the differences, if any, between the two transactions or between the persons
undertaking the transactions which do not materially affect the financial
indicator applicable under the method or where the differences do materially
affect the financial indicator applicable under the method, then reasonably
accurate adjustments can be made to eliminate the effects of the differences;
“controlled transaction” means a transaction between associates;
- 181 -
“cost plus method” means comparing the mark up on the costs directly and
indirectly incurred in the supply of property or services in a controlled
transaction with the mark up on those costs directly or indirectly incurred in
the supply of property or services in a comparable uncontrolled transaction;
“financial indicator” means –
(a) in relation to the comparable uncontrolled price method, the price;
(b) in relation to the cost plus method, the mark up on costs;
(c) in relation to the resale price method, the resale margin;
(d) in relation to the transaction net margin method, the net profit
margin; or
(e) in relation to the transactional profit split method, the division of

profit and loss;
“person” has the meaning given to it in the Act and includes a “branch
person” & “headquarters person” referred to in regulation 5;
“resale price method” means comparing the resale margin that a purchaser of
property in a controlled transaction earns from reselling the property in an
uncontrolled transaction with the resale margin that is earned in a
comparable uncontrolled purchase and resale transaction;
“transaction” includes an arrangement, understanding, agreement, or mutual

practice whether or not legally enforceable or intended to be legally
enforceable, and includes a dealing between a branch of a person and another
part of the person;
“transactional net margin method” means comparing the net profit margin
relative to the appropriate base including costs, sales or assets that a person
achieves in a controlled transaction with the net profit margin relative to the
same basis achieved in a comparable uncontrolled transaction;
“transactional profit split method” means comparing the division of profit

and loss that a person achieves in a controlled transaction with the division of
profit and loss that would be achieved when participating in a comparable
uncontrolled transaction;
“transfer pricing method” means –
- 182 -
(a) the comparable uncontrolled price method;
(b) the resale price method;
(c) the cost plus method;
(d) the transaction net margin method; or
(e) the transactional profit split method; and
“uncontrolled transaction” means a transaction that is not a controlled

transaction.
PART II - COMPARABILITY FACTORS, BRANCH PERSONS AND

OECD DOCUMENTS
4. Comparability factors
In determining whether two or more transactions are comparable the

following factors shall be considered to the extent that they are economically
relevant to the facts and circumstances of the transactions –
(a) the characteristics of the property or services transferred or supplied;
(b) the functions undertaken by the person entering into the transaction
taking account of assets used and risks assumed;
(c) the contractual terms of the transactions;
(d) the economic circumstances in which the transactions take place; and
(e) the business strategies pursued by the associate to the controlled

transaction.
5. Branch person and headquarter person
For the purposes of these Regulations –
(a) a branch shall be deemed to be a separate and distinct person referred to

as the “branch person” from the person in respect of whom it is a
branch referred to as the “headquarters person”;
(b) a branch person and headquarters person shall be deemed to be

associates; and
- 183 -
(c) a branch person and a headquarter person are located where their
activities are located.
6. Application of OECD documents
(1) Subject to sub regulation (2), these Regulations shall be applied in a

manner consistent with –
(a) the arm’s length principle in Article 9 of the OECD Model Tax
Convention on Income and Capital; and
(b) the OECD Transfer Pricing Guidelines for Multi-national

Enterprises and Tax Administrations approved by the Council of
the OECD for publication on 13 July 1995 (C(95)126/FINAL) as
supplemented and updated from time to time.
(2) Where there is any inconsistency between the Act, these Regulations
and the OECD documents referred to in sub regulation (1), the Act
shall prevail.
PART III - CONSISTENCY WITH ARM’S LENGTH PRINCIPLE,

DOCUMENTATION, ADVANCED PRICING AGREEMENTS AND
CORRESPONDING ADJUSTMENTS
7. Consistency with the arm’s length principle
(1) Where a person has entered into a transaction or a series of transactions

to which these Regulations apply, the person shall determine the
income and expenditures resulting from the transaction or transactions
in a manner that is consistent with the arm’s length principle.
(2) Where a person fails to comply with sub regulation (1), the
Commissioner may make the necessary adjustments to ensure that the
income and expenditures resulting from the transaction or transactions
are consistent with the arm’s length principle.
(3) In determining whether the result of a transaction or series of

transactions is consistent with the arm’s length principle, the most
appropriate transfer pricing method shall be used taking into account –
(a) the respective strengths and weaknesses of the transfer pricing

methods in the circumstances of the case;
- 184 -
(b) the appropriateness of a transfer pricing method having regard to

the nature of the controlled transaction determined, in particular,
through an analysis of the functions undertaken by each person
that is a party to the controlled transaction;
(c) the availability of reliable information needed to apply the transfer

pricing methods; and
(d) the degree of comparability between controlled and uncontrolled

transactions, including the reliability of adjustments, if any, that
may be required to eliminate differences.
(4) Where a person has used an appropriate transfer pricing method in

accordance with sub regulation (3), the Commissioner’s examination as
to whether income and expenditures resulting from the person’s
transaction or transactions are consistent with the arm’s length principle
shall be based on the transfer pricing method used by the person.
(5) A person may apply a transfer pricing method other than those listed in
the definition of transfer pricing method under regulation 3, if the
person can establish that –
(a) none of the listed methods can reasonably be applied to determine

whether a controlled transaction is consistent with the arm’s
length principle; and
(b) the method used gives rise to a result that is consistent with that
between independent persons engaging in comparable
uncontrolled transactions in comparable circumstances.
(6) A person who contravenes this regulation is liable on conviction to

imprisonment for a term not exceeding six months or to a fine not
exceeding twenty five currency points or both.
8. Documentation
(1) A person shall record, in writing, sufficient information and analysis to

verify that the controlled transactions are consistent with the arm’s
length principle.
(2) The documentation referred to in sub regulation (1) for a year of income
shall be in place prior to the due date for filing the income tax return for
that year.
- 185 -
(3) The Commissioner may, by notice, specify the items of documentation

that a person is required to keep for the purposes of this regulation.
(4) A person who fails to comply with this regulation is liable on conviction
to imprisonment for a term not exceeding six months or to a fine not
exceeding twenty five currency points or both.
9. Advance pricing agreements
(1) A person may request that the Commissioner enter into an advance
pricing agreement to establish an appropriate set of criteria for
determining whether the person has complied with the arm’s length
principle for certain future controlled transactions undertaken by the
person over a fixed period of time.
(2) A request under sub regulation (1) shall be accompanied by –
(a) a description of the person’s activities, controlled transactions, and

the proposed scope and duration of the advanced pricing
agreement;
(b) a proposal by the person for the determination of the transfer

prices for the transactions to be covered by the advanced pricing
agreement setting out the comparability factors, the selection of
the most appropriate transfer pricing method to the circumstances
of the controlled transactions; and the critical assumptions as to
future events under which the determination is proposed;
(c) the identification of any other country or countries that the person
wishes to participate in the advanced pricing agreement; and
(d) any other information which the Commissioner may require as

specified in a practice note on transfer pricing.
(3) The Commissioner shall consider a request made by a person under sub
regulation (1) and, after taking account of the matters specified in the
request and the expected benefits from an advance pricing agreement in
the circumstances of the case, the Commissioner may decide to enter
into an advance pricing agreement or to reject the request.
(4) Where the Commissioner agrees to enter into an advance pricing

agreement with a person, the Commissioner may –
(a) accept the person’s proposal under sub regulation (2)(b);
- 186 -
(b) reject the proposal; or
(c) modify the proposal with the person’s consent.
(5) The Commissioner may enter into an advance pricing agreement with
the person either alone or together with the competent authorities of the
country or countries of the person’s associate or associates identified
under sub regulation (2)(c).
(6) Where the Commissioner approves a proposal under sub regulation

(4)(a) or modifies it with the person’s consent under sub regulation
(4)(c), the Commissioner shall enter into an advance pricing agreement
that will provide confirmation to the person that no transfer pricing
adjustment will be made under regulation 7(2) to controlled
transactions covered by the agreement where the transactions are
consistent with the terms of the agreement.
(7) An advance pricing agreement entered into under sub regulation (6)
shall apply to the controlled transactions specified in the agreement that
are entered into on or after the date of the agreement and the agreement
shall specify the years of income for which the agreement applies.
(8) The Commissioner may cancel an advanced pricing agreement with a

person by notice in writing if –
(a) the person has failed to materially comply with a fundamental

term of the agreement;
(b) there has been a material breach of one or more of the critical
assumptions underlying the agreement;
(c) there is a change in the tax law that is materially relevant to the
agreement; or
(d) the agreement was entered into based on a misrepresentation,

mistake or omission by the person.
(9) Cancellation of an advance pricing agreement under sub regulation (8)

takes effect –
(a) in the case of sub regulation (8)(a) and (c), from the date of the
notice of cancellation specified by the Commissioner in the notice
of cancellation;
- 187 -
(b) in the case of sub regulation (8)(b), from the date that the material
breach occurred; and
(c) in the case of sub regulation (8)(d), from the date the agreement
was entered into.
(10) The Commissioner shall treat as confidential any trade secrets or other
commercially sensitive information or documentation provided to the
Commissioner in the course of negotiating an advance pricing
agreement.
10. Corresponding adjustments
Where –
(a) an adjustment is made by a competent authority of another country

with which Uganda has a double tax treaty to the taxation of a
transaction or transactions of a person subject to tax in Uganda; and
(b) the adjustment results in taxation in another country of income or

profits that are also taxable in Uganda, the Commissioner shall, upon
request by the person subject to tax in Uganda, determine whether the
adjustment is consistent with the arm’s length principle and where it is
determined to be consistent, the Commissioner shall make a
corresponding adjustment to the amount of tax charged in Uganda on
the income or profits so as to avoid double taxation.
Cross references - Income Tax Act Cap 340
- 188 -
THE INCOME TAX (DESIGNATION OF PAYERS)

NOTICE, 2013
Legal Notice No.9 of 2013- (Under Section 119(1) of the Income Tax Act, Cap.340)
IN EXERCISE of the powers conferred upon the Minister by Section 119(1)

of the Income Tax Act, this Notice is issued this 28th day of June, 2013.
1. Title
This Notice may be cited as the Income Tax (Designation of Payers) Notice,
2013.
2. Commencement
This Notice shall come into force on the 1st day of July, 2013.
3. Designation of persons as payers
The persons specified in the Schedule to this Notice are designated as payers
for purposes of Section 119(1) of the Income Tax Act.
4. Payment for goods and services
(1) Where any person designated in this Notice as a payer pays an amount
or amounts in aggregate exceeding one million shillings to any person in
Uganda-
(a) for a supply of goods or materials of any kind; or
(b) for a supply of any services,
the payer shall withhold tax on the gross amount of the payment at the
rate prescribed in Part VIII of the Third Schedule to the Income Tax Act,
and the payer shall issue a receipt to the payee.
(2) Where –
(a) there are separate supplies of goods or materials, or of services and

each supply is made for an amount that is one million or less; and
(b) it would reasonably be expected that the goods or materials, or

services would ordinarily be supplied in a single supply for an
- 189 -
amount exceeding one million shillings, sub-paragraph (1) applies to

each supply.
5. Revocation of Legal Notice No.10 of 2012
The Income Tax (Designation of Payers) Notice, 2012 is revoked.
SCHEDULE
1. 23rd Metallurgical Construction of 33. Bank of Africa - Uganda Ltd

Non-Ferrous Metals 34. Bank of Baroda (U) Ltd
2. A.K. Transporters Ltd. 35. Barclays Bank (U) Ltd.
3. A2z Maintenance And Engineering 36. Bata Shoe Co. Uganda Ltd
Services Ltd 37. Baylor College of Medicine
4. Abb Ltd Children's Foundation
5. Abc Capital Bank Ltd 38. Bayport Financial Services (U) Ltd
6. Acdi/Voca-USAID Pl480 Title Ii 39. Bethany High School Nalya Ltd
Program 40. Brac Uganda Ltd
7. Action Aid International (U) Ltd 41. Brac Uganda Microfinance Ltd
8. Africa Air Rescue (U) Ltd (Aar) 42. Britania Allied Industries Ltd
9. African Medical and Research 43. Budadiri Arabica Coffee Factory
Foundation Ltd
10. African Palliative Care Association 44. Bugema University
Ltd by Guarantee 45. Bugisu Cooperative Union Ltd
11. African Skies Ltd 46. Buildtop Construction Ltd
12. Afsat Communications (U) Ltd 47. Bujagali Energy Ltd
13. Agakhan Educaton Service Uganda 48. Cable Corporation Ltd.
14. Ahf Global Immunity 49. Cairo International Bank
15. Aids Information Centre Posttest 50. Canaan Sites Ltd
Club 51. Capital Radio Ltd
16. Airtel Uganda Ltd 52. Capital Shoppers Ltd
17. Alcatel-Lucent East Africa Ltd 53. Care International in Uganda
18. Alexander Forbes (U) Ltd 54. Catholic Relief Services
19. Ambitious Construction Co.Ltd 55. Cbmi Construction Co Ltd
20. Ambrosoli Ltd 56. Cementers Ltd
21. American Refugee Committee 57. Centenary Rural Development
22. Amnesty International Ltd Bank Ltd
23. Ankole Coffee Processors 58. Century Bottling Co. Ltd.
24. Aon Uganda Ltd 59. Chartis (U) Ltd/ Aig
25. Apolo Hotel Corporation Ltd 60. Children's Aids Fund
26. Aponye (U) Ltd 61. China Civil Eng.Construction Co.
27. Arab Contractors (Uganda) Ltd 62. China Nanjing International (U)
28. Aurum Roses Ltd Ltd
29. Avocats Sans Frontiers 63. China Road and Bridge
30. Avsi Foundation Corporation Ltd
31. Babcon (U) Ltd 64. Chobe Safari Lodges Ltd
32. Baker Hughes Eho Ltd 65. Churchill Safaris and Travel Ltd
- 190 -
66. Cinderella Agencies Ltd 110. Finca - Uganda

67. Citibank Uganda Ltd 111. First Insurance Co
68. City Oil (U) Ltd 112. Five Star Insurance Services Ltd
69. Civicon Ltd 113. Fountain Publishers Ltd
70. Coil Ltd 114. Fuelex (U) Ltd
71. Colline Hotel Ltd 115. G4s Secure Solutions Uganda Ltd
72. Compassion Internat'l 116. Gal Chizar Palace Investments Ltd
73. Complant Engineering Trade (U) 117. Game Discount World Uganda Ltd
Ltd 118. Gapco Uganda Ltd.
74. Construction Put Sarajevo 119. Gauff Consultants Uganda Ltd
75. Coronation Developers (U) Ltd 120. Geolodges Uganda Ltd
76. Crane Bank Ltd 121. Giz
77. Crestanks Ltd. 122. Global Trust Bank (U) Ltd
78. Crown Beverages Ltd 123. Gnld International (Pty) Ltd
79. Dayalbhai Madanji & Co 124. Goal Relief And Development
Investments Ltd Organisation
80. Deloitte Uganda Ltd 125. Gold Star Insurance Co. Ltd
81. Delta Petroleum Ltd 126. Golden Leaves Hotels & Resort Ltd
82. Dfcu Bank Ltd 127. Golf Course Group Ltd
83. Dfcu Ltd 128. Golf Course Holdings Ltd
84. Dhl Global Forwarding (U) Ltd 129. Golf Course Hotel Ltd
85. Dhl International (U) Ltd 130. Grant Thornton
86. Diamond Trust Bank Ltd 131. Greenhill Holdings Ltd
87. Doshi Hardware (U) Ltd 132. Gulfstream Investments (U) Ltd
88. Dott Services Ltd 133. Hana Mixed Secondary School Ltd
89. East African Distributors Ltd 134. Hared Petroleum Ltd
90. East African Underwriters Ltd 135. Hashi Energy (U) Ltd
91. East High School-Ntinda Ltd 136. Hass Petroleum (U) Ltd
92. Eastern Builders and Engineers Ltd 137. Heifer Project Inter
93. Ecobank Uganda Ltd 138. Heritage Coffee Company Ltd
94. Ecopower Uganda Ltd 139. Heritage Sites Ltd
95. Elgon Terrace Hotel Ltd 140. Hilton High School Mukono
96. Elizabeth Glaser Pediatric Aids 141. Hima Cement Ltd
Foundation 142. Hl Construction Ltd
97. Embassy Supermarket (U) Ltd 143. Hospice Africa Uganda Ltd
98. Energo (Uganda) Company Ltd 144. Hossana Real Estates Ltd
99. Engen Uganda Ltd 145. Hotel Africana Ltd
100. Enjoy (U) Ltd 146. Hotel Paradise On The Nile Ltd
101. Epicentre / Msf 147. Housing Finance Bank Ltd
102. Equator Catering Ltd 148. Huawei Technologies (U) Co Ltd
103. Equity Bank Uganda Ltd 149. Imperial Bank (Uganda) Ltd
104. Ericsson Ab Uganda Branch 150. Imperial Group Of Hotels Ltd
105. Ernst and Young 151. Infocom Ltd
106. Eskom Uganda Ltd 152. Innscor Uganda Ltd
107. Excel Construction Ltd. 153. Insurance Company of East Africa
108. Ferdsult Engineering Services Ltd 154. International Hiv/Aids Alliance
109. Fina Bank Uganda Ltd Uganda
- 191 -
155. International Law Institute 194. Link Community Development Ltd

156. International Rescue Committee 195. Lion Insurance Co. Ltd
Inc. 196. Lutheran World Federation
157. International School Of Uganda 197. M.K Publishers Uganda Ltd
Ltd 198. M.T.N. Uganda Ltd
158. Inter-Religious Council Of Uganda 199. Mabale Growers Tea Factory Ltd
159. Iucn Liason Office 200. Mada Holdings (U) Ltd
160. J.P Cuttings Ltd 201. Madhvani Group Ltd
161. Jacobsen Uganda Power Plant Co. 202. Malaria Consortium East Africa
Ltd 203. Mantrac (Uganda) Ltd
162. Jamani Investments Ltd 204. Marie Stopes Uganda Ltd
163. Jambo Roses Ltd 205. Mbale Resort Hotel Ltd
164. Jazz Supermarkets Ltd 206. McleodRussel Uganda Ltd
165. Jesani Construction Ltd 207. Medicins Sans Frontier Holland
166. Jiemke Ltd 208. Medicins Sans Frontiers-Spain
167. Jomayi Property Consultant Ltd 209. Mega Supermarket Ltd
168. Jomayi Stones And Concrete 210. Merchantile Credit Bank Ltd
Products 211. Merryland High School
169. JSI Research And Training Institute 212. Metroplex Shopping Mall Ltd
Inc. 213. Metropole Holdings Ltd
170. Kabira Country Club Ltd 214. Metropolitan Properties Ltd
171. Kakira Sugar Ltd 215. Mgs International (U) Ltd
172. Kakiri Stone Quarry Ltd 216. Microcare Health Ltd
173. Kampala International University 217. Mildmay International
Ltd 218. Moil (U) Ltd
174. Kampala Aeroclub Training Centre 219. Monitor Publications Ltd
175. Kampala International School 220. Mpanga Growers Tea Factory Ltd
Uganda Ltd 221. Mu-Jhu Care Ltd
176. Kark Technical Services Ltd 222. MuljibhaiMadhivan Foundation
177. Karmic Foods Ltd 223. MuljibhaiMadvani Co. Ltd
178. Kayonza Growers Tea Factory Ltd 224. Multichoice Uganda Ltd
179. Kcb Bank Uganda Ltd 225. Multitech Management and
180. Kenfreight U Ltd Acountancy Programme
181. Kengrow Industries Ltd 226. Mulusa Academy Wobulenzi Ltd
182. Kenjoy Enterprises 227. Munyonyo Common Wealth
183. Kensington Africa Ltd Resort Ltd
184. Kijura Tea Company Ltd 228. Nakumatt (Uganda) Ltd
185. Kinyara Sugar Ltd 229. Namirembe Hillside High School
186. Knight Frank Uganda Ltd Ltd
187. Kobil Uganda Ltd 230. Nation Media Group Ltd
188. Kpmg Peat Marwick 231. National Bank of Commerce (U)
189. Krishna Construction Company Ltd
Ltd 232. National Contracting Company
190. Lake Victoria Hotel Ltd Ltd
191. Leads Insurance Ltd 233. National Forestry Authority
192. Libra Energy Ltd 234. National Insurance Corporation
193. Libya Oil Uganda Ltd Ltd.
- 192 -
235. Ndejje University Communication And Education

236. Nestle Equatorial African Region 277. Property Services Ltd
Ltd 278. Protea Hotels Uganda Ltd
237. New Oasis Esso Service Station 279. Protecting Families Against
Ltd. Hiv/Aids (Prefa)
238. Newplan Ltd 280. Qg Saatchi & Saatchi Ltd
239. Nice House of Plastics Ltd 281. Quality Uganda Ltd
240. Nicontra Ltd 282. Queen Elizabeth National Park
241. Nile Breweries Ltd 283. Rabbai Real Estates
242. Nkumba University 284. Rainbow International School
243. Nokia Siemens TietoliikenneOy (2003) Ltd
244. North Bukedi Cotton Company 285. Rakai Health Science Program
Ltd 286. Raz Entertainment Ltd
245. Northern Uganda Rehabilitation 287. Reach Out Mbuya Parish Hiv/Aids
Programme Initiative
246. Ntinda View Academy Ltd 288. Red Chilli Hideaway Ltd
247. Oil and Gas Exploration Company 289. Research Triangle Institute
Krakow Ltd 290. Reynolds Construction Company
248. Omega Construction Ltd 291. Ridar Hotel Ltd
249. Opportunity (U) Ltd 292. Rio Insurance Company Ltd
250. Orange Uganda Ltd 293. Roko Construction Ltd
251. Orient Bank Ltd 294. Roofings Ltd
252. Oxfam Gb In Uganda 295. Roofings Rolling Mills Ltd
253. Pancon Engineers Ltd 296. Royal Van Zanten Ltd
254. Paraa Safari Lodge Ltd 297. S.S Constructions Ltd
255. Pdm (Uganda) Ltd 298. Salini Construttori Spa
256. Pearl Development Group Ltd 299. Sameer Agriculture & Livestock
257. Pearl Flowers Ltd. Ltd
258. Pearson Longman (U) Ltd 300. Sanlam Life Insurance (U) Ltd
259. Petro Uganda Ltd 301. Save The Children International
260. Petrocity Enterprises (Uganda) Ltd 302. Schlumberger Oilfield
261. Phoenix Petroleum Uganda Ltd 303. SDVTransami (U) Ltd
262. Picfare Industries Ltd. 304. Seeta High School Ltd
263. Pine Investments 305. Sema Properties Ltd
264. Pioneer Construction Ltd 306. Senana Investments Ltd
265. PKF Consulting Ltd 307. Seroma Christian High Ltd
266. PKF Taxation Services 308. Seyani Brothers & Co. (U) Ltd
267. PKF Uganda 309. Shell Malindi (Uganda) Ltd
268. Plan International 310. Shell Uganda Ltd.
269. Polaris Seismic International Ltd 311. Shoprite Checkers Uganda Ltd
270. Post Bank Uganda Ltd 312. SNVNetherlands Development
271. Premier Academy Ltd Organization
272. Pricewater House Coopers 313. Sobetra Uganda Ltd
273. Pricewater House Coopers Ltd 314. SogeaSatom Ltd
274. Pride Micro Finance Ltd 315. SOS Children's Villages Uganda
275. Private Sector Foundation Uganda 316. Southern Range Nyanza Ltd
276. Program For Accessible Health 317. SpedagInterfreight Uganda Ltd
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318. Speke Hotel (1996) Ltd 353. Tronder Power Uganda Ltd
319. Spencon Services Ltd 354. Tropical African Bank Ltd
320. SRS (U) Ltd 355. Tusker Mattresses Uganda
321. St Lawrence Citizens' High School 356. UAP Insurance Uganda Ltd
Ltd 357. Uchumi Super Markets (U) Ltd
322. Stanbic Bank (U) Ltd. 358. Ugacof Ltd
323. Standard Chartered Bank (U) Ltd 359. Uganda Baati Ltd
324. Standard Supermarkets Ltd 360. Uganda Breweries Ltd
325. Statewide Insurance Co 361. Uganda Christian University
326. Stirling Civil Engineering Ltd - 362. Uganda Development Bank Ltd
Uganda Branch 363. Uganda Finance Trust Ltd
327. Stone Construction Ltd 364. Uganda Health Marketing Group
328. Straight Talk Foundation Ltd Ltd
329. Strategic Logistics Ltd 365. Uganda Inflight Services Ltd
330. Sugar Corporation Of Uganda Ltd 366. Uganda Martyrs University
331. Sunrise Commodities & Millers 367. Uganda Red Cross Society
Uganda 368. Uganda Telecom Ltd
332. Sunset Hotel International Ltd 369. Ugarose Flowers Ltd
333. Super Supermarket Ltd 370. Ugma Engineering Corporation
334. Target Well Control Uganda Ltd Ltd
335. Team Business College Ltd 371. Umeme Ltd
336. The Aids Support Organisation 372. Unilever Uganda Ltd
(TASO) 373. United Bank for Africa (U) Ltd
337. The Aids Support Organisation 374. United Healthcare Distributors Ltd
(TASO) - Central Region 375. Uvan Ltd
338. The Emin Pasha Ltd 376. Valley View Estates Ltd
339. The Human Rights and Good 377. Vambeco Enterprises Ltd
Governance Programme 378. Venus Flowers (U) Ltd
340. The Infectious Diseases Institute 379. Victoria Construction Company
Ltd Ltd
341. The Johns Hopkins University 380. Victoria Pumps Ltd
Centre for Communications 381. Vienna College Namugongo Ltd
Programmes 382. Viral Services Ltd
342. The Jubilee Insurance Co Ltd 383. Wagagai Ltd
343. The New Vision Printing and 384. Wanno Engineering Ltd
Publishing Corporation 385. Warid Telecom Uganda Ltd
344. The Registered Trustees of 386. Water Aid
Kampala Archdiocese 387. Watoto Childcare Ministries
345. The Registered Trustees of 388. Weatherford Services & Rentals
Reproductive Health Uganda Ltd
346. Tibbett & Britten International Ltd 389. Western Uganda Cotton Company
347. Tilda Uganda Ltd Ltd
348. Toro Mityana Tea Co. Ltd. 390. Xclusive Cuttings Uganda Ltd
349. Tororo Cement Ltd 391. Xclusive Kalanchoe (U) Ltd
350. Total Uganda Ltd. 392. Zion Constructions
351. TPS (Uganda) Ltd
352. Trans Africa Assurance Co Ltd
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Practice Notes ITA
PRACTICE NOTES
(Under Section 160 of the Income Tax Act)
These Practice Notes, which are binding on all URA officers unless altered or
revoked, were issued to achieve consistency in the administration of the
Income Tax Act and to provide guidance to taxpayers and officers of the
Uganda Revenue Authority.
Practice Notes – 2001
ISSUE DATE : 2nd November 2001

EFFECTIVE DATE: 1st July 2001
ISSUED BY : Annebritt Aslund - CG
1. Recruitment Expenses
All expenses genuinely incurred by taxable employers in the recruitment of

employees should be treated as incurred in the production of income under
Section 22 of the ITA and allowed as a deduction.
2. Deduction of Bad Debts
(a) For persons other than financial institutions, a bad debt is allowed as
a deduction only if all reasonable steps for recovery have been taken
and there is reasonable ground that the debt will not be recovered.
(b) For financial institutions, specific reserves for identified losses or

potential losses are allowable as a deduction. For this purpose in
respect of financial institutions, bad debts provided for in accordance
with the Bank of Uganda Regulations are allowable as a deduction.
[Refer to Prudential Norms on Asset Quality for Financial
Institutions – Paragraph 12(1) to (6)]
(c) Paragraph 12(7) of the same Bank of Uganda Regulations provides

for 1% general provision on the total outstanding credit facilities.
This 1% general provision does not satisfy the requirements of
Section 25 of the ITA and is therefore not deductible.
(d) Any recoveries of previously written off bad debts will be treated as
income and taxed in the year in which the recoveries are made.
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Practice Notes ITA
3. Initial Allowance
Placing “an item of eligible property into service for the first time…” should be
interpreted to mean for the first time in the taxpayer’s business. Therefore
where taxpayer ‘B’ buys equipment which has been used by taxpayer ‘A’ in
his business, taxpayer ‘B’ is entitled to initial allowance in the first year in
which he puts the same equipment to use notwithstanding that ‘A’ got initial
allowance in respect of the same equipment.
4. Carry Forward of Losses by Companies enjoying Tax Holidays under

Certificate of Incentives – Section 166(23)
The meaning of this subsection is that in respect of companies enjoying tax

holidays, a tax computation will be done under Section 166(23)(c) for each of
the tax holiday years as if the company was not exempt, and notional
deductions made for Sections 27, 29, 30 and 31 under Section 166(23)(b) so
that any loss in the final tax holiday year may be carried forward for
deduction in the first year after expiration of the tax holiday and subsequently
in accordance with Section 38.
5. Valuation of Benefits – Housing provided to Domestic Workers within

the same Compound as the Person they work for (commonly referred to
as “Boys’ Quarters”)
Workers quarters of this nature have no market value in terms of rent.

Consequently, no benefit should be attached to such accommodation for
domestic workers under paragraph 10 of the Fifth Schedule.
6. Valuation of Benefits – Provision of Security Guards
An employer’s provision of security guards is not classified as a taxable

benefit under the Fifth Schedule.
7. Computer Software
Computer software is an integral part of computers and therefore a class 1

depreciable asset under the Sixth Schedule of the ITA.
8. Withholding Tax on Professional Fees paid to Residents Revoked by Practice Note

issued on 1st September 08
In respect of Section 119(A), the following professionals will be deemed to

have regularly complied with the obligations imposed under the Income Tax
Act –
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Practice Notes ITA
A. All Professionals who are registered for VAT purposes;
B. Doctors, Dentists or Nurses with a fixed place of business and

registered for income tax purposes.
Professionals not covered by the above may, on application to the

Commissioner General, be granted exemptions.
9. Any assessments that have become final and conclusive as at 1st July 2001
shall not be re-opened on account of variance with these Practice Notes.
ISSUE DATE :
EFFECTIVE DATE:
ISSUED BY : Annebritt Aslund - CG
1. Foreign Currency Debt Gains and Losses – Section 48(4)
This Section requires notification of foreign currency debt to be given to the

Commissioner in writing before a foreign currency loss in respect thereof can
be allowed as a deduction.
Information relating to foreign currency gains and losses must be available in

the accounts. Therefore the notification requirement is deemed to be satisfied
when the accounts have been submitted. If any further details are necessary,
they should be provided when requested.
2. Withholding Tax on Professional Fees – Section 119A [Now 118A]
This Section requires deduction of withholding tax from management or

professional fees paid to resident professionals.
Professional here shall have the same meaning as under Section 4(7), namely
“a resident taxpayer who is in the business of providing medical, dental,
architectural, engineering, accounting, legal or other professional services”.
Other professional services shall be limited to persons belonging to a vocation

or calling that involves some advanced learning or science with a minimum
qualification of a Diploma or Degree, or its equivalent.
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Practice Notes ITA
ISSUE DATE : 24th July 2006

EFFECTIVE DATE:
ISSUED BY : Allen Kagina (Mrs) - CG
1. Treatment of Expenses and Losses incurred by Financial Institutions

on Loans given out for Agricultural purposes
The Income Tax (Amendment) Act 2005 inserted a provision under Section
21 that exempts from tax interest earned by financial institutions on loans
granted for agricultural purposes.
Under Section 22(1)(a) ITA, expenses and losses are allowed only to the
extent to which the expenditures or losses were incurred in the production of
income included in gross income. Expenses and losses incurred in producing
income that is exempt from tax are therefore not allowable for tax purposes.
Below is the recommended tax treatment of expenses related to deriving

exempt bank interest, and procedures to be followed:
(a) Direct Finance Cost (Interest on borrowed funds)
(i) Interest payable by a Financial Institution on borrowed funds

should be apportioned between loans for agricultural purposes
and loans for other purposes using the formula –
Interest relating to agricultural loans =
A+B x E
C+D
where,
A loans (principal) for agricultural purposes outstanding at

the beginning of the Year;
B loans (principal) for agricultural purposes outstanding at

the end of the year;
C borrowed funds at the beginning of the year;
D borrowed funds at the end of the year;
E the total interest cost for the year.
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Practice Notes ITA
(ii) The portion of interest obtained using the formula above is not
tax allowable.
(b) Provisions for Bad and Doubtful Debts
Specific provisions as well as general provisions made in respect of

agricultural loans are not allowable for tax purposes as per
provisions of Section 22(1)(a).
(c) Overheads and other Expenses
(i) Overheads are allowed wholly because they cannot be directly

traced to agricultural loans, and possible bases of apportionment
are highly subjective.
(ii) Administrative and other establishment expenses are also

allowed wholly because of the difficulty in obtaining a suitable
base for apportionment.
(d) Any other expenses that can be separately identified and is wholly
related to agricultural loans is not allowable for tax purposes.
(e) Transitional Loans
This refers to loans that had already been advanced by financial

institutions for agricultural purposes before 1st July 2005.
Interest accruing to a financial institution out of this category of

loans after 1st July 2005 is exempt, while the related expenses are not
allowable for tax purposes.
(f) Financial Institutions should submit with their final returns and
accounts the following information –
(i) A breakdown of specific provisions between those made

against loans for agricultural purposes and those made
against loans for other purposes;
(ii) Total interest cost for the year;
(iii) Opening and closing balances of the principal in respect of

loans advanced for agricultural purposes; and
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Practice Notes ITA
(iv) Opening and closing balances of total interest-incurring

funds available to the financial institution for lending.
(g) Definitions
“Agricultural loan” means a loan for primary production purposes of

farming, forestry, fish farming, bee keeping, animal and poultry
husbandry, or similar operations.
“Financial Institution” is defined in the ITA.
2. Exemption of Income of a Collective Investment Scheme
The income of a Collective Investment Scheme (CIS) is exempt from tax

under Section 21(1)(t) of the ITA to the extent of which the income is
distributed to participants in the Collective Investment Scheme.
A Collective Investment Scheme is defined in Section 3 of the Collective

Investment Scheme Act to mean –
“…any arrangement with respect to property of any description,

including money, the purpose or effect of which is to enable persons
taking part in the arrangement, whether by becoming owners of the
property or any part of it or otherwise, to participate in or receive
profits or income arising from the acquisition, holding, management
or disposal of the property or sums paid out of such profits or
income.”
This definition is adopted for purposes of the ITA under Section 2.
To qualify as a CIS under the above definition, the following conditions must
be satisfied:
(a) The participants in the scheme must not have day to day control over
the management of the property in question;
(b) The participant’s contributions and ultimate income/profits in relation

to a property as a whole (not as separate parts unless there’s free
exchange or rights) must be pooled;
(c) The property must be managed as a whole by the operator of the scheme
or on his behalf.
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Practice Notes ITA
Arrangements that do not meet the above conditions and those outlined
under Section 3(5) of the CIS Act do not constitute a CIS for the purposes of
the ITA and would not enjoy the exemption.
3. Exempt Organisation
For purposes of the definition of exempt organisation in Section 2 of the ITA,

in order to be considered –
(a) “charitable” – an organisation must be proved to provide services for

public benefit falling under any of the following categories:
(i) the relief of poverty;
(ii) the advancement of education;
(iii) the advancement of religion; or
(iv) other purposes beneficial to the community within the legal

understanding of charity.
Whereas the public benefit in the above categories can easily be

assumed, an organisation claiming to be charitable under category (iv)
shall positively demonstrate the public benefit provided.
(b) “an institution of public character” – the benefit provided must be to the
public at large or at least to a sufficient section of the community.
4. Widely Issued – Section 83(5)(a)
For interest paid by a resident person in respect of debentures to be exempt

from tax, the “public offer test” must be met. This means the debentures,
debenture stock, mortgage stock, loans, loan stock or similar instrument
acknowledging indebtedness whether secured or not, must have been issued –
(a) to a reasonable number of people operating in a capital market;
(b) to several investors with a history of previous acquisition of debt

instruments or debentures;
(c) as a result of negotiations for the loan in a public forum used by

financial markets dealing in debt instruments; or
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Practice Notes ITA
(d) to a dealer, manager or underwriter for the purpose of placement of the

debt instrument.
The issuance of debentures should therefore be non-exclusive and preferably

in a capital market arrangement that caters for public involvement.
5. “Partly Used” – Section 27(10) and 2(u)
The phrase “partly used” relates to use of assets for both business and non-
business purposes.
ISSUE DATE : 18th June 2007

EFFECTIVE DATE:
1. Withholding Tax on Payments for Goods and Services – Meaning of

“aggregate” and “gross amount” under Section 119(1) ITA.
(a) For purposes of Section 119(1) ITA, the word “aggregate” is

interpreted to mean the total payments to a supplier in respect of a
supply of goods or services as provided for in a contract. The
threshold of one million shillings is therefore in respect of the total
contract value. This implies that separate supplies which constitute
one contract of one million shillings and above are subject to 6%
WHT irrespective of whether the amount paid at any given time in
respect of the supply is less than the threshold provided under
Section 119(2).
(b) Gross amount of the payment under Section 119(1) refers to the
actual consideration for goods or services exclusive of any tax (i.e.
VAT or Excise Duty)
2. Exemption for 6% WHT on Sales by Insurance Brokers/Agents
Section 119(1) gives the Government of Uganda, a Government Institution, a

local authority, any company controlled by the GOU or any person
designated in a notice issued by the Minister the mandate to withhold at a
rate of 6% on the gross amount payable to any person in Uganda for the
services or goods supplied. This includes payments to insurance
brokers/agents.
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Practice Notes ITA
In exercising this provision, the WHT agents have been withholding tax at
6% from payments of premiums to brokers/agents. Inevitably, the WHT is
levied on the gross payments to the agent who may be entitled only to a part
of the sale proceeds as a commission, yet the WHT credit can only be
claimed by the agent and not the principal on whose behalf the sales are
made.
Therefore, in order to iron out the anomaly, 6% WHT shall not apply on
payment of insurance premiums.
3. 6% WHT on Sale of Air Tickets
Section 86 ITA imposes tax on every non-resident person carrying on the

business of air transport operator who derives income from the carriage of
passengers who embark in Uganda at a rate of 2% of the gross income.
Section 87 provides that the tax is a final tax if the tax payable has been
withheld by a withholding agent under Section 120 and paid to the
Commissioner under Section 123.
Section 119(1) gives the Government of Uganda, a Government Institution, a

local authority, any company controlled by the GOU or any person
designated in a notice issued by the Minister the mandate to withhold at a
rate of 6% on the gross amount payable to any person in Uganda for the
services or goods supplied. This includes payments to travel agents.
However, it is noted that travel/ticketing agents receive money for air tickets
on behalf of the airlines which are already taxed under a different
arrangement.
Therefore, in order to iron out this anomaly, 6% WHT shall not apply on
payments for air tickets.
ISSUE DATE : 18th April 2008

EFFECTIVE DATE: 1st May 2008
1. Cessation of Tax Credit Certificates in respect of Final Withholding

Tax
Section 128 (3) provides that tax withheld by a withholding agent from a
payee is deemed to have been paid by the payee/supplier and is credited
against the tax assessed on the payee/supplier for the year of income in
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Practice Notes ITA
which the payment is made. The payee/supplier is entitled to a Tax Credit

Certificate (TCC) with which he/she makes claim of the tax withheld.
However, in respect of withholding tax that is final tax under section 122 of
the Income Tax, the tax withheld cannot be claimed as credit against any
other tax liability in Uganda.
Therefore, with effect from 1st May 2008, URA will no longer issue Tax
Credit Certificates in respect of final tax namely;
(a) Tax that is withheld on payment of interest by a financial institution to a

resident individual, unless the individual receives it in the capacity of a
trustee (section 117);
(b) Tax that is withheld on payment of interest by a financial institution to

resident retirement fund (section 117);
(c) Tax that is withheld on payment of interest by a financial institution to an

institution or organization which the Commissioner General has exempted
from income tax under section 2(bb);
(d) Tax that is withheld on payment of interest on treasury bills (where the
interest is payable on Treasury Bills that mature/matured on or after 1st July
2006); and
(e) Tax that is withheld on payment of dividends to a resident individual

(section 118);
2. Boundaries of Kampala and Entebbe Areas for Income Tax Purposes
Section 28 of the Income Tax Act provides for Initial allowance and
subsection (1)(a) provides that;
“where the asset is placed in service outside an area prescribed in part

IV of the sixth Schedule to this Act, seventy five per cent of the cost
base of the property at the time it is placed in service: or
(b) in any other case, fifty per cent of the cost base of the property at
the time it is placed in service.”
And Part IV of the sixth schedule provides as hereunder,
“The following areas are prescribed for the purposes of section 28 -

Kampala, Entebbe, Namanve, Jinja, and Njeru.”
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Practice Notes ITA
It has been noted that there has been a contention as to the boundaries of
Kampala and Entebbe areas for purposes of the above quoted provision. This
therefore is to clarify on what Kampala and Entebbe Tax Districts are
composed of.
Kampala area for Income Tax purposes and in particular the above quoted
provision is composed of the five political divisions namely;
1) Kampala Central;
2) Nakawa;
3) Rubaga;
4) Makindye and
5) Kawempe
Any area outside the above does not comprise Kampala for purposes of the
Income Tax Act provision quoted above.
Entebbe area for tax purposes shall comprise of the administrative divisions
of Entebbe Municipality which are divisions A and B. The divisions are
further divided into four parishes that is,
1) Kigungu Parish;
2) Kiwafu Parish;
3) Central Parish and
4) Katabi Parish
Any area outside the above does not comprise Entebbe for purposes of tax.
For purposes of uniformity, ease in operation and implementation of Section

28 of the Income Tax Act, Kampala and Entebbe areas shall be defined as
above.
ISSUE DATE : 1st September 2008

EFFECTIVE DATE : 1st September 2008
Withholding tax on management or professional fees paid to residents

(section 119A [Now 118A])
This PN revokes the practice note issued on November 2nd, 2001 on the
application of section 119A [Now 118A] of the Income Tax Act 1997, Cap
340.
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Practice Notes ITA
In respect of Section 119A [Now 118A](Amendment Act 2001) of the Income

Tax Act 1997, Cap 340, any professional meeting the following requirements
will be deemed to have regularly complied with the obligations imposed
under the Income Tax Act –
i) Is registered with URA;

ii) Has submitted the Provisional, Final/Self-Assessment Returns for
the company and individuals (including directors); and monthly
PAYE and VAT returns by the due dates for the three preceding
years;
iii) Has submitted all the directors’ returns (for companies only);
iv) Has fully settled all the taxes by the due dates for the three
preceding years of income;
v) Has fully complied with the obligations to withhold tax under the
Act;
vi) Has paid all the customs dues to date;
Has entered and honours an arrangement to pay any URA arrears
of tax due; and
vii) Has complied with any notice or any requirement to provide
information under the Income Tax Act.
URA will administratively review the professionals in the data base and issue
a list of those deemed to be compliant as per section 119A (2) [Now 118A] of
the Income Tax Act 1997 as amended. All professionals already appearing on
the recently published list of exempt persons are deemed to be compliant.
Professionals not exempted shall require clearance from URA.
Any assessments that have become final and conclusive as at 1st September
2008 shall not be re-opened on account of variance with this Practice Note.
Practice Notes 2009
ISSUE DATE : 16th March 2009

EFFECTIVE DATE : 1st July 2008
No. URA/IT/PN 1/09: Exempt Income derived by a person from

managing or running an Educational Institution
1. Background to the exemption
The Minister of Finance, Planning and Economic Development proposed the

exemption in his Budget Speech for the Financial Year 2008/2009 in order to
encourage investment in the education sector. The proposal was subsequently
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Practice Notes ITA
passed into law and is provided for in section 21(1)(aa) of the Income Tax
(Amendment) Act 2008. It is expected that the tax foregone would be re-
invested in the institutions to provide better facilities and improve curricula
for the betterment of Ugandans.
2. Effective date of exemption
The exemption applies to years of income commencing on or after 1st July

2008. Therefore income derived by a person from managing or running an
education institution whose year of income commenced before 1st July 2008
is not exempt even if the accounting date falls after 1st July 2008.
3. Education institution
There are three broad categories that constitute education institutions i.e.
(i) a school,
(ii) a tertiary institution and;
(iii) a university.
The meaning of the above mentioned categories obtained from the Ministry
of Education and Sports/The Education Acts indicated below shall be
adopted for the purposes of this exemption.
School
A school means a nursery school, a primary school, a senior secondary

school, a technical, a business or a vocational school providing some form of
training to a group of learners. This category covers pre-primary, primary
and post primary sub sectors.
Tertiary institution
A tertiary institution means a post-secondary or post ordinary level business,

technical or vocational education and training institution or a degree
awarding institution duly registered and gazetted by the National Council for
Higher Education.
University
A university means an institution, school, Institute or centre of Higher

Education, other than a tertiary institution, which provides post-secondary
education offering courses of study leading to the award of certificates,
diplomas and degrees and conducting research and publish.
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Practice Notes ITA
4. Beneficiaries of the exemption
Generally, all institutions provided for by the Education (Pre-primary,

Primary and Post-primary) Act 2008, the Business, Technical, Vocational
Educational and Training (BTVET) Act 2008 and the Universities and Other
Tertiary Institutions Act 2003 may be referred to as educational institutions
falling under section 21(1)(aa) of the Income tax Amendment Act 2008.
5. Income derived from running or managing education institution
Income that may be derived from running or managing an education institute

constitute the following:
(i) Fees levied on the students

(ii) Donations
(iii) Legacies
(iv) Grants
(v) Income from development al projects of the institution such as a

farm, hire of institutional premises and equipment , research, and
consultancy
(vi) Income generated by production units in Technical and vocational

schools, institutes and colleges when they take on contracts or produce
goods and services under “Training With Production” training
strategy, especially under the following trades;
 Food and nutrition(baking),

 Motor vehicle mechanics,
 Carpentry and joinery,
 Electronics,
 Welding and fabrication,
 Tailoring, designing and cutting of garments,
 Farming, and
 Electrical installation
(vii) Any other income that is generated by an education institution to help

in the provision and advancement of education and training and, is
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Practice Notes ITA
reflected in the income and expenditure books of accounts of the

institution.
It should be noted that the following income is not exempted:
a) Employment income to staff including management staff and

directors;
b) Dividends to shareholders,
c) Business/investment income that is not related to the functioning

of the education institution and
d) Income from the institution’s subsidiary enterprises and

investments.
6. Obligations of education institutions
Education institutions still have the following obligations:
1. Each education institution shall present evidence of recognition by the

Ministry of Education and Sports or its relevant agencies to attest its legal
existence and to the fact that it was founded for purposes of providing
education i.e. by means of a license, registration certificate or charter.
2. Filing of Income tax returns,
3. Filing of Pay As You Earn (PAYE) returns and payment of the tax
thereof;
4. Payment of tax on income that is not exempt,

5. Payment of other taxes imposed under the:-
 Value Added Tax Act Cap 349

 The East African Community Customs Management Act 2004
 Taxes, fees, imposed under the Traffic and Road Safety Act Cap 361
 Taxes under the Stamps Act Cap 342
 Taxes, levies, fees or duties imposed by any other statute recognized
under the laws of Uganda.
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Practice Notes ITA
ISSUE DATE : 31st March 2009

No. URA/IT/PN 2/09: DEDUCTION ALLOWED TO PRIVATE

EMPLOYERS EMPLOYING PERSONS WITH DISABILITIES
The Commissioner General of Uganda Revenue Authority hereby issues

practice notes under Section 160 of the Income Tax Act, Cap 340 for the
guidance of officers of URA and the Public on the effective date as per the
Income Tax (amendment) Act 2008 under section 22(1)(e) which allows as a
deduction 15% percent of tax payable to all private employers who employ
ten or more persons with disabilities. The practice notes also define key terms
in the provision.
Section 22(1) (e) provides that…“private employers who employ ten or more
persons with disabilities either as regular employees, apprentices or learners on full
time basis shall be entitled to tax deduction of fifteen percent of all payable tax upon
proof to the Uganda Revenue Authority”
Effective date of the amendment
This amendment applies to years of income commencing on or after 1st July

2008.
Implication of the amendment
A deduction of 15% of tax payable by a private employer who employs 10 or

more persons with disabilities shall be allowed in ascertaining chargeable
income.
Illustration
If Chargeable Income ascertained of a corporate body is;
1,000,000 - Tax thereon at 30% __ 300,000

15% deduction allowed _________________________ 15%*300,000
= 45,000
Therefore the chargeable Income after deduction under section 2(1)(e)
1,000,000 - 45,000 = 955,000
Tax thereon a 30% 30%*955,000
= 286,000
The meanings below shall be attached to the terms as in the provision:-
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Practice Notes ITA
“apprentices or learners on full time basis” means a person who has agreed to
work for a skilled employer for a fixed period usually for a low wage in return
for being taught that persons skill.
“disability” means a substantial functional limitation of daily life activities

caused by physical, mental or sensory impairment which substantially limits
one or more of the major life activities of that person.
“private employer” means an employer other than government or government

controlled entities liable to income tax.
Note
An entity partly owned by Government but to less than 51% stands to benefit
from the deduction.
“regular employees” means employees are following a constant definite

pattern, done or happening often, lasting or happening over a long period.
Practice Notes 2012
ISSUE DATE : 5th May 2012

Transfer Pricing Documentation to Be Kept By Taxpayers
The Honourable Minister of Finance, Planning and Economic Development

by virtue of the powers conferred upon her under Section 164 of the Income
Tax Act, Cap. 340, Laws of Uganda, issued Statutory Instrument No. 30 of
2011 titled The Income Tax (Transfer Pricing) Regulations, 2011 effective 1st
July 2011.
Documentation
In accordance with Sub Regulation 3 of Regulation 8 of the Regulations, the

Commissioner General hereby notifies the general taxpaying public that the
following documentation shall be required for transfer pricing purposes.
1. These documentation requirements shall apply to controlled transactions
for Multi National Enterprises (MNEs); or
2. Controlled Transactions in aggregate equal to or exceeding 25,000(Twenty

five thousand) currency points in a year of income.
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Practice Notes ITA
Note: For purpose of this Practice Notes, MNEs are defined as enterprises
that manage production, deliver services or generate sales and profits in more
than one country and includes hybrid arrangements and relationships
through shared shareholders.
This list is neither intended to be exhaustive nor meant to apply to all types of
businesses. The taxpayer should maintain documents of sufficient quality so
as to accurately and completely describe the transfer pricing analysis
conducted and efforts to comply with the arm’s length principle.
A. Company details:
i) Ownership and organizational structure showing linkages between the

associated parties. This shall include -
a) description of the taxpayers worldwide organizational structure

(including an organizational chart) covering all associated parties;
b) The identification of participants in related party dealings ; and
c) Brief history and any significant changes in relationships between the

parties including dates of incorporation, shareholding at the time of
the changes.
ii) Operational aspects of business including details of functions performed,

risks assumed and assets employed relevant to the transactions.
iii) Assumptions and information regarding factors that influenced the

setting of prices or the establishment of policies for the taxpayer and the
related party group as a whole
B. Transaction details.
i) A description of controlled transactions that identifies the transactions

which have been entered into, the names of the participants, the scope,
type, timing, frequency of and value of transactions e.g. purchase of raw
material or fixed assets, sale of finished goods, borrowing of funds, the
currency of the transactions should also be stated, identification of
internal data relating to the controlled transactions, terms and conditions
of the transactions including copies of relevant intercompany agreements
relating to the transactions such as –
a) Technical assistance fees.
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Practice Notes ITA
b) Management fees.
c) Marketing fees and branding arrangements.
d) Recruitment fees, or other services provided.
e) Royalties and licences payable.
f) Purchase or rental of equipment or other assets.
g) Handling charges.
h) Loans, including loans advanced by a related company to the

associate through independent parties.
i) Allocation of overhead expenses or any specific expenses (e.g.

promotional or advertising) borne by the foreign entity or associated
enterprise.
j) Other forms of payment made to associates. And
k) In regard to payments made above, where the payment made by an

associate to a third party will result in an offset of obligations due by
the third party to an associate or non-associate.
ii) Comparables, description of the comparables including, for tangible

property, the physical features, availability and quality of tangible
property, for services the nature and extent of the services, and for
intangible property, the form of the transaction, type of intangible, the
rights to use the intangible that are assigned, and anticipated benefits
from use of the intangible.
Also,
 Identify factors taken into account by the taxpayer to evaluate

comparability including the characteristics of the property or service
transferred.
 The functions performed (and the significance of those functions in

terms of their frequency, nature and value to the respective parties),
the assets employed (taking into consideration their age, market
value, location, etc.)
 the risks assumed (including risks such as market risk, financial risk,
and credit risk).
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Practice Notes ITA
 Identification of any internal comparables, adjustments made if any,

criteria used in selecting comparables etc.
 Aggregation analysis (grouping of transactions for comparability).
 Extension of the analysis over a number of years with reasons for the
years chosen, where relevant.
iii) Economic conditions during the time of transactions including

differences surrounding controlled firms transactions and uncontrolled
transactions to which it is compared in terms of –
a) Geographical location.
b) Business plans to the extent to which they relate to the nature and
purpose of the controlled transactions.
c) Description of internal procedures and internal controls in place at

the time of controlled transactions.
d) Economic and legal factors affecting the pricing of the taxpayer

property and services.
e) Description of intangible property potentially relevant to the pricing

of the taxpayers’ property or services in the controlled transactions.
f) Market size and Market share to the extent differences affect price.
g) Regulatory framework.
h) Description of the structure, intensity and dynamics of the relevant

Industry competitive environment.
i) Trends, risks and key players, etc.
j) Availability of substitute goods and services.
k) Levels of supply and demand.
l) Any other special circumstances.
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Practice Notes ITA
C. Determination of arm’s length price.
i) Description of the method selected and the reasons why it was selected
(The pricing methodology adopted, showing how the arm’s length price
is derived. Also indicate why that method is chosen over other methods
and a description of the measures taken to ensure that the measure of
profit for taxation purposes is derived from arm’s length pricing of
relevant transactions. This would include –
 An analysis of the controlled transaction using the five (5)

comparability factors as contained in Regulation 4 of the Transfer
Pricing Regulations.
 Searches and databases and criteria used in selection of comparables

including economic considerations.
 A description of the transactions selected as comparables, including

an analysis of those transactions (using the five comparability factors)
and an explanation of why the selected comparables are considered
sufficiently reliable.
 A description of any comparability adjustments considered

appropriate.
 A description of how comparable pricing or margins is applied to the

tested transaction.
 Intangible property, the form of the transaction, the type of

intangible, the rights to use the intangible that are assigned, and the
anticipated benefits from its use, Documentation of assumptions and
judgments made in the course of determining an arm’s length
outcome.
 Documentation of calculations made in applying the selected method

and any adjustments made. Assumptions and information regarding
factors that influenced the setting of prices or the establishment of any
pricing policies for the taxpayer and the related party group as a
whole.
ii) Functional analysis of the risks assumed (including risks such as market
risk, financial risk, credit risk, foreign exchange risk, liability risk, assets
employed (taking into account consideration of their age, market value,
location etc.) and functions performed by entity in relation to risks, assets
and functions and performed by the associated entities that are party to
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Practice Notes ITA
the transaction and the significance of those functions in terms of their

frequency, nature and value to the respective parties involved in or
related to the transaction.
iii) Cost Contribution arrangements (CCA) including copies of the CCA

agreements and relevant amendments, list of arrangement participants
and beneficiaries, extent of use of CCA property by associated parties
who are non-parties to CCA, duration of CCA, description of the scope
of the activities to be undertaken, including any intangible or class of
intangibles in existence or intended to be developed, interest of each
participant, identification of benefits accruing to each party and any
material differences between expectations and actual benefits and all
other rights and obligations of each associated enterprise under the CCA,
contribution borne by each participant, description of the method used to
determine each parties share of the contribution consequences of a
participant entering or withdrawing from the agreement.
iv) Management strategy/policy and/or corporate business plans to the

extent they give an insight into the nature of special circumstances under
which the taxpayer business is conducted, for example to enter a new
market, increase share in existing market, to introduce new products into
market, or to fend off increasing competition, set off transactions,
distribution channel selection and management strategies that influenced
determination of transfer price.
v) Where applicable, financial information relevant in comparing profit and

loss between associated entities with whom the taxpayer has transactions
subject to transfer pricing rules.
vi) If a comparability analysis results in a range of arm’s length outcomes,

please document all the outcomes. Reasons for choosing that particular
arm’s length price from the range of outcomes must be documented. If a
range is used, documentation supporting the establishment of the range
should be evidenced; and
vii) An explanation of the capital relationship e.g. balance and source of debt
and equity funding) relevant to the transactions.
When to submit documents:
Documents pertaining to transfer pricing are NOT to be physically submitted

with Return Forms, BUT must be in place prior to the due date for filing the
Income Tax Return for the relevant year, must be in the English language or
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Practice Notes ITA
translated into the English language, prepared at the time the transfer price is
established.
D. Summary and Conclusion
A summary and conclusion as to whether the controlled transactions comply

with arm’s length principle and whether any transfer pricing adjustments are
required.
E. Note - A person who fails to comply with this regulation is liable on

conviction to imprisonment for a term not exceeding six months or to a
fine not exceeding twenty five currency points or both.
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Value Added Tax Act Cap.349
VALUE ADDED TAX ACT | Cap 349

Laws of Uganda
An Act to provide for the imposition and collection of Value Added Tax,
and for other purposes connected to that tax.
Commencement: 1st July 1996
1. Interpretation
2. Interpretation of fair market value
3. Interpretation of associate
PART II – CHARGE OF TAX
4. Charge of tax
5. Person liable to pay tax
PART III – TAXABLE PERSONS
6. Taxable person
7. Persons required or permitted to register
8. Registration
9. Cancellation of registration
PART IV – SUPPLIES OF GOODS AND SERVICES
10. Supply of goods

11. Supply of services
12. Mixed supplies
13. Supply by agent
14. Time of supply
15. Place of supply of goods
16. Place of supply of services
17. Imports
_________________________________________________________________
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PART V – TAXABLE SUPPLIES
18. Taxable supply

19. Exempt supply
20. Exempt import
20A. Exempt import of services
PART VI – TAXABLE VALUE
21. Taxable value of a taxable supply

22. Adjustments
23. Taxable value of an import of goods
PART VII – CALCULATION OF TAX PAYABLE
24. Calculation of tax payable on a taxable transaction

25. Calculation of tax payable by a taxable person for a tax period
26. Cash basis accounting
27. Consequences of a change in accounting basis
28. Credit for input tax
29. Tax invoices
30. Credit and Debit notes
PART VIII – PROCEDURE AND ADMINISTRATION OF TAX
Returns and Assessments
31. Returns
32. Assessments
33. General provisions relating to assessments
PART VIIIA - OBJECTIONS AND APPEALS
33A. Interpretation
33B. Objections to assessments
33C. Appeals to Tax Appeals Tribunal
33D. Appeals to High Court
33E. Burden of proof
34. Due date for payment of tax

35. Tax as a debt due to Government
_________________________________________________________________
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36. Security
37. Preferential claim to assets
38. Seizure of goods
39. Closure of business and distress proceedings
40. Recovery of tax from third parties
41. Duties of receivers
Refund of Tax
42. Refund of overpaid tax

43. Refund of tax for bad debts
44. Interest on overpayments and late refunds
45. Refund of tax to diplomats and diplomatic and consular missions and
international organizations
Records and Investigation Powers
46. Records
47. Access to books, records and computers
49. Books and records not in English language
50. Taxpayer identification number
Offences and Penal Tax
51. Offences related to registration

52. Offences related to tax invoices, credit notes and debit notes
53. Failure to lodge a return
54. Failure to comply with recovery provision
56. Failure to provide reasonable assistance
57. Failure to comply with Section 48 or 49 notice
58. Improper use of taxpayer identification number
59. False or misleading statements
60. Obstructing an officer of the Authority
61. Offences by officers and other persons
62. Offences by companies
63. Officer may appear on behalf of Commissioner General
64. Compounding of offences
65. Penal tax
_________________________________________________________________
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65A.Interest on unpaid tax

PART IX – GENERAL PROVISIONS
68. Form, authentication and availability of documents

68A. Use of information technology
68B. Cancellation of registration
68C. Offences
69. Service of notices and other documents
70. Nominated person
70A. VAT representatives of non-resident persons
71. Application of Act to partnerships and unincorporated associations
72. Trustee
73. Currency conversion
74. Prices quoted to include tax
75. Schemes for obtaining undue tax benefits
77. Priority of Schedules
78. Regulations and amendment of Schedules
78A. Supremacy of Act
79. Practice notes
80. Private rulings
SCHEDULES
First Schedule Public international organizations

Second Schedule Exempt supplies
Third Schedule Zero-rated supplies
Fourth Schedule Formulae, tax invoices, credit notes & debit notes
Fifth Schedule Calculation of interest penalty
1. Value Added Tax Regulations, 1996

2. Rate of Tax Order, 2006
3. Rate of Tax Order, 2007
4. The Value Added Tax (Deferment of Tax on Plant and Machinery)
Regulations 2013
PRACTICE NOTES
======================
_________________________________________________________________
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PART I - PRELIMINARY
1. Interpretation
(a) “application to own use”, in relation to goods or services, means applying

Substituted by the goods or services to personal use, including personal use by a relative,
VAT (Am) Act 1 2008
or any other non-business use;
(aa) “biodegradable packaging material” means packaging material which

Inserted by
can undergo a breakdown of its entire composition and by naturally
VAT (Am) Act 2010 existing micro-organisms in the presence of air and water at specific
temperatures into smaller constituent components within a given time
of usually not more than six months;
(b) “Commissioner General” means the Commissioner General of the

Uganda Revenue Authority;
(c) “company” means a body corporate or un-incorporate, whether created

or recognized under a law in force in Uganda or elsewhere, but does
not include a partnership or trust;
(d) “consideration”, in relation to a supply of goods or services, means the

total amount in money or kind paid or payable for the supply by any
person, directly or indirectly, including any duties, levies, fees, and
charges paid or payable on, or by reason of, the supply other than tax,
reduced by any discounts or rebates allowed and accounted for at the
time of the supply;
(da) “contractor” means a person supplying goods or services other than as

an employee to the following –
Inserted by (i) A licensee in respect of mining operations undertaken by the

VAT (Am) Act 2015
licensee; or
(ii) A licensee in respect of petroleum operations undertaken by the

licensee.
(e) “exempt import” has the meaning in Section 20;
(f) “exempt supply” means a supply of goods or services to which Section

19 applies;
_________________________________________________________________
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(g) “finance lease”, in relation to goods, includes the lease of goods where –
(i) the lease term exceeds seventy five per cent of the expected life of
the goods;
(ii) the lessee has an option to purchase the goods for a fixed or
determinable price at the expiration of the lease; or
(iii) the estimated residual value of the goods to the lessor at the
expiration of the lease term, including the period of any option to
renew, is less than 20 per cent of its fair market value at the
commencement of the lease;
(h) “goods” includes all kinds of movable and immovable property,

Substituted by
[thermal and electrical energy, heating, gas, refrigeration, air
VAT (Am) Act 2011 conditioning and water] but does not include money;
(i) “hire purchase agreement” means an agreement that is a hire purchase

agreement in terms of hire purchase law in Uganda;
(j) “import” means to bring, or to cause to be brought, into Uganda from a

foreign country or place;
(k) “importer”, in relation to an import of goods, includes the person who

owns the goods, or any other person for the time being possessed of or
beneficially interested in the goods and, in relation to goods imported
by means of a pipeline, includes the person who owns the pipeline;
(l) “input tax” means the tax paid or payable in respect of a taxable supply
to or an import of goods or services by a taxable person;
(la) “licensee” means a person granted a mining right or a person with

(la – ld) Inserted by whom the Government has entered into a petroleum agreement;
VAT (Am) Act 2015
(lb) “mining operations” includes every method or process by which any

mineral is won from the soil or from any substance or constituent of the
soil and includes mining exploration operations;
(lc) “petroleum operations” means an authorised operation under a

petroleum agreement for petroleum exploration, development,
production and export including, planning, installation, transportation
of petroleum, storage or decommissioning, and for the construction of a
pipeline or petroleum refinery.
_________________________________________________________________
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(ld) “petroleum agreement” means an agreement entered into by the

Government of Uganda with another person in accordance with the
Petroleum (Exploration, Development and Production) Act, 2013, or
the Petroleum (Refinery, Conversion, Transmission and Midstream
Storage) Act 2013.
(m) “Minister” means the Minister responsible for Finance;
(n) “money” includes –
(i) coins or paper currency that the Bank of Uganda has issued as
legal tender;
(ii) coins or paper currency of a foreign country which is used or

circulated as currency;
(iii) a bill of exchange, promissory note, bank draft, postal order, or

money order, other than a coin or paper currency that is a
collector's piece, investment article or an item of numismatic
interest;
(o) “output tax” means the tax chargeable under Section 4 in respect of a
taxable supply;
(p) “person” includes an individual, a partnership, company, trust,

Inserted by
VAT (Am) Act 2006
government, and any public or local authority;
(q) “public international organization” means an organization listed in the

First Schedule to this Act;
(r) “reduced consideration has the meaning in Section 18(7);
(s) “relative”, in relation to an individual, includes an ancestor of the

individual, a descendant of the individual's grandparents, or the spouse
of the individual or of any of the foregoing;
(t) “services” means anything that is not goods or money;
(u) “tax” means the value added tax chargeable under this Act;
(v) “tax fraction” means the fraction calculated in accordance with the
formula;
___r___
r + 100
_________________________________________________________________
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in which formula “r” is the rate of tax applicable to the taxable supply;
(w) “tax period” means the calendar month;
(x) “taxable person” has the meaning in Section 6;
(y) “taxable supply” has the meaning in Section 18;
(z) “taxable transaction” means a taxable supply or an import of goods or

services that is subject to tax under this Act;
(aa) “taxable value”, in relation to a taxable supply or an import of goods or

services is determined under Part VI of this Act;
(bb) “trust” means any relationship where property is under the control or
management of a trustee;
(cc) “trustee” includes –
(i) an executor, administrator, tutor or curator;
(ii) a liquidator or judicial manager;
(iii) a person having or taking on the administration or control of

property subject to another person having a beneficial interest in
the property;
(iv) a person acting in a fiduciary capacity;
(v) a person having possession, control or management of the

property of a person under a legal disability.
2. Interpretation of Fair Market Value
(1) For the purposes of this Act, the fair market value of a taxable supply at
any date is the consideration in money which a similar supply would
generally fetch if supplied in similar circumstances at that date in
Uganda, being a supply freely offered and made between persons who
are not associates.
(2) Where the fair market value of a taxable supply cannot be determined
under subsection (1), the fair market value of the supply shall be the
amount that, in the opinion of the Commissioner General having regard
_________________________________________________________________
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to all the circumstances of the supply, is the fair market value of the
supply.
(3) In this Section, “similar supply”, in relation to a taxable supply, means a

supply that is identical to, or closely or substantially resembles, the
taxable supply, having regard to the characteristics, quality, quantity
supplied, functional components, reputation of, and materials comprising
the goods and services which are the subject of the taxable supply.
3. Interpretation of Associate
(1) For the purposes of this Act, “associate”, in relation to a person, means
any other person who acts or is likely to act in accordance with the
directions, requests, suggestions or wishes of the person whether or not
they are communicated to that other person.
(2) Without limiting the generality of subsection (1), the following are
(a) a relative;
(b) a partner, an associate of a partner under another application of this

Section or a partnership in which the person is a partner;
(c) the trustee of a trust under which the person, or an associate under
another application of this Section, benefits or is capable of
benefiting;
(d) a company in which the person either alone, or together with an

associate or associates under another application of this Section,
controls directly or indirectly fifty per cent or more of the voting
power in the company, or which is accustomed or may reasonably
be expected to act in accordance with the directions or wishes of the
person or an associate of the person;
(e) where the person is a partnership, a partner in the partnership, an

associate of the partner under another application of this Section, or
another partnership in which the person or an associate is a partner;
(f) where the person is the trustee of a trust, any other person or an
associate of such other person under another application of this
Section who benefits or is capable of benefiting under the trust; or
_________________________________________________________________
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(g) where the person is a company, a person who either alone or

together with an associate or associates under another application of
this Section controls directly or indirectly fifty per cent or more of
the voting power of the company, or in accordance with whose
directions or wishes the company is accustomed or may reasonably
be expected to act.
PART II - CHARGE OF TAX
4. Charge of Tax
A tax, to be known as a value added tax, shall be charged in accordance with

this Act on –
Substituted by
(a) every taxable supply [in Uganda] made by a taxable person; VAT (Am) Act 2011
(b) every import of goods other than an exempt import; and
(c) the supply of [any imported services by any person] imported services, other
than an exempt service, by any person.
5. Person Liable to Pay Tax
Except as otherwise provided in this Act, the tax payable –
(a) in the case of a taxable supply, is to be paid by the taxable person making
the supply;
(b) in the case of an import of goods, is to be paid by the importer;
(c) in the case of [an import of services] a supply of imported services, other than
Substituted by an exempt service, is to be paid by the [recipient of the imported services]
VAT (Am) Act 2011
person receiving the supply.
PART III - TAXABLE PERSONS
6. Taxable Person
(1) A person registered under Section 7 is a taxable person from the time the
registration takes effect.
(2) A person who is not registered, but who is required to be registered or to

Substituted by pay tax under this Act, is a taxable person from the beginning of the tax
VAT (Am) Act 1 2008
_________________________________________________________________
- 227 -
period immediately following the period in which the duty to apply for
registration or to pay tax arose.
7. Persons required or permitted to register
(1) A person who is not already a registered person shall apply to be

registered in accordance with Section 8 –
(a) within twenty days of the end of any period of three calendar
months if during that period the person made taxable supplies, the
value of which exclusive of any tax exceeded one-quarter of the
annual registration threshold set out in subsection (2); or
(b) at the beginning of any period of three calendar months

where there are reasonable grounds to expect that the total value
exclusive of any tax of taxable supplies to be made by the person
during that period will exceed one-quarter of the annual
registration threshold set out in subsection (2).
(c) at the beginning of any tax period of more than three calendar
Inserted by months where there are reasonable grounds to expect that the total
VAT (Am) Act 2014
value exclusive of any tax of taxable supplies to be made by the
person will exceed the annual threshold set out in subsection (2).
(2) The annual registration threshold is one hundred and fifty million shillings
Substituted by VAT [fifty million shillings].
(Am) Act 2015
(3) In determining whether the registration threshold is exceeded for the

period specified in subsection (1), it is to be assumed that the person is a
taxable person during that period.
(4) A person supplying goods or services for consideration as part of his or

her business activities, but who is not required by subsection (1) or (5) to
apply for registration, may apply to the Commissioner General to be
registered in accordance with Section 8.
(4A) Notwithstanding subsection (4), the following persons may apply to the
Commissioner General to be registered in accordance with section 8 –
Inserted by
VAT (Am) Act 2015
(a) a licensee undertaking mining or petroleum operations;
(b) a person undertaking the construction of a petroleum refinery or

petroleum pipeline; and
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(c) a person engaged in commercial farming;
(d) a person undertaking midstream operations as defined by the

Inserted by Petroleum (Refining, Conversion, Transmission and Midstream
VAT (Am) Act 2016
Storage) Act 2013.
(5) Notwithstanding subsection (1), a person being a national, regional, local

or public authority or body which carries on business activities shall
apply for registration at the date of commencement of those activities.
(6) An engineer, lawyer, economist, architect, publisher, auctioneer, estate

agent, valuer, accountant, auditor, clearing and forwarding agent or other
Inserted by
VAT (Am) Act 2002
professional supplying goods or services for consideration as part of
and repealed by his or her business, but who is not required by subsection (1) or (2)
VAT (Am) Act 1 2008
to apply for registration , shall apply to be registered in accordance
with Section 8, without regard to the eligibility requirement under
subsection (2).
(6) The registration under paragraph (c) of subsection (1) shall be valid only
Inserted by for purposes of accessing terms and conditions of payment of tax on plant
VAT (Am) Act 2014
and machinery as provided under section 34(8).
8. Registration
(1) An application for registration under Section 7 shall be in the form

prescribed by the Commissioner General, and the applicant shall provide
the Commissioner General with such information as the Commissioner
General may require.
(2) The Commissioner General shall register a person who applies for
registration under Section 7 and issue to that person a certificate of
registration including the VAT registration number unless the
Commissioner General is satisfied that that person is not eligible for
registration under this Act or, in the case of an application under section
7(4) –
(a) the person has no fixed place of abode or business; or
(b) the Commissioner General has reasonable grounds to believe that

that person –
(i) will not keep proper accounting records relating to any

business activity carried on by that person;
_________________________________________________________________
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(ii) will not submit regular and reliable tax returns as required by
Section 31; or
(iii) is not a fit and proper person to be registered.
(3) Registration under this Section takes effect –
(a) in the case of an application under Section 7(1), (5) or (6) from the
Substituted by
VAT (Am) Act 2002 beginning of the tax period immediately following the period in
which the duty to apply for registration arose; or
(b) in the case of an application under Section 7(4), from the beginning
of the tax period immediately following the period in which the
person applied for registration.
(4) A certificate of registration shall state the name and other relevant details
of the taxable person, the date on which the registration takes effect, and
the taxpayer identification number.
(5) The Commissioner General shall establish and maintain a register

containing the relevant details of all taxable persons.
(6) The Commissioner General may register a person if there are reasonable
grounds for believing that the person is required to apply for registration
under Section 7 but has failed to do so, and that registration shall take
effect from the date specified in the certificate of registration.
(7) The Commissioner General shall serve a notice in writing on a person of

the decision to refuse to register the person under subsection (2) within
one month of receiving the application.
(8) The Commissioner General shall serve a notice in writing on a person of

a decision to register the person under subsection (6) within one month of
making the decision.
(9) A person dissatisfied with a decision made under subsection (8) may only
challenge the decision under Part VIII of this Act on the basis that the
decision is an assessment.
(10) A taxable person shall notify the Commissioner General in writing of

any change
(a) in the name or address of that person;
_________________________________________________________________
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(b) in circumstances where the person no longer satisfies the grounds

for registration; or
(c) of a material nature in business activities or in the nature of taxable

supplies being made,
and the notification shall be made within fourteen days after the change
has occurred.
9. Cancellation of Registration
(1) A taxable person shall apply in writing for the cancellation of the
registration if that person has ceased to make supplies of goods or
services for consideration as part of the business activities of the person.
(2) Subject to subsection (3), a taxable person may apply in writing to have
his or her registration cancelled if, with respect to the most recent period
of three calendar months, the value of his or her taxable supplies
exclusive of tax does not exceed one-quarter of the annual registration
threshold specified under Section 7(2) and if the value of his or her
taxable supplies exclusive of tax for the previous twelve calendar months
does not exceed seventy five per cent of the annual registration threshold.
(3) In the case of a taxable person who applied for registration under Section
7(4), an application under subsection (2) may only be made after the
expiration of two years from the date of registration.
(4) The Commissioner General may cancel the registration of –
(a) a person who has applied for cancellation under subsection (1) or
(2); or
(b) a person who has not applied for cancellation of registration but in
respect of whom the Commissioner General is satisfied that he or
she is neither required nor entitled under Section 7 to apply for
registration.
(5) The Commissioner General may cancel the registration of a person who
is not required to apply for registration under Section 7 where the
person:–
(a) has no fixed place of abode or business;
_________________________________________________________________
- 231 -
(b) has not kept proper accounting records relating to any business
activity carried on by him or her;
(c) has not submitted regular and reliable tax returns as required by
Section 31; or
(d) is not, in the opinion of the Commissioner General, a fit and proper
person to be registered.
(6) The Commissioner General shall serve a notice in writing on a taxable

person of a decision to cancel or refuse to cancel the registration under
this Section within fourteen days of making the decision.
(7) The cancellation of registration shall take effect from the end of the tax
period in which the registration is cancelled.
(8) Where the registration of a person is cancelled, the Commissioner

General shall remove that person's name and the details described in
Section 8 from the register.
(9) A taxable person whose registration has been cancelled under this
Section shall be regarded as having made a taxable supply of all goods on
hand (including capital goods) and shall be liable for output tax, at the
time the registration is cancelled, on all goods in respect of which he or
she received input tax credit, the output tax payable being based on the
fair market value of the goods at the time his or her registration was
cancelled.
(10) The obligations and liabilities of a person under this Act, including the
lodging of returns required under Section 31, in respect of anything done
or omitted to be done by that person while a taxable person shall not be
affected by cancellation of the person's registration.
PART IV - SUPPLIES OF GOODS AND SERVICES
10. Supply of Goods
(1) Except as otherwise provided under this Act, a supply of goods means
Inserted by
any arrangement under which the owner of the goods parts or will part
VAT (Am) Act 2009 with possession of the goods, including a lease or an agreement of sale and
purchase.
(2) A supply of electrical or thermal energy, heating, gas, refrigeration, air

Repealed by conditioning or water is a supply of goods.
VAT (Am) Act 2011
_________________________________________________________________
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(3) The application of goods to own use is a supply of the goods.
11. Supply of Services
(1) Except as otherwise provided under this Act, a supply of services means a
supply which is not a supply of goods or money, including:–
(a) the performance of services for another person;
(b) the making available of any facility or advantage;
(c) the toleration of any situation or the refraining from the doing of
any activity; or
Inserted by
VAT (Am) Act 2011 (d) the provision of thermal and electrical energy, heating, gas,
refrigeration, air conditioning and water.
(2) A supply of services made by an employee to an employer by reason of

employment is not a supply made by the employee.
12. Mixed supplies
(1) A supply of services incidental to the supply of goods is part of the supply
of goods.
(2) A supply of goods incidental to the supply of services is part of the supply
of services.
(3) A supply of services incidental to the import of goods is part of the

import of goods.
(4) Regulations made under Section 78 may provide that a supply is a supply
of goods or services.
13. Supply by Agent
(1) A supply of goods or services made by a person as agent for another

person being the principal is a supply by the principal.
(2) Subsection (1) does not apply to an agent's supply of services as agent to
the principal.
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14. Time of Supply
(1) Except as otherwise provided under this Act, a supply of goods or

services occurs –
(a) where the goods are applied to own use, on the date on which the
goods or services are first applied to own use;
(b) where the goods or services are supplied by way of gift, on the date
on which ownership in the goods passes or the performance of the
service is completed; or
(c) in any other case, on the earliest of the date on which –
(i) the goods are delivered or made available, or the performance

of the service is completed;
(ii) payment for the goods or services is made; or
(iii) a tax invoice is issued.
(2) Where –
(a) goods are supplied under a rental agreement; or
(b) goods or services are supplied under an agreement or law which

provides for periodic payments,
the goods or services are treated as successively supplied for successive

parts of the period of the agreement or as determined by that law, and
each successive supply occurs on the earlier of the date on which
payment is due or received.
(3) For the purposes of this Section, where two or more payments are made
or are to be made for a supply of goods or services other than a supply
to which subsection (2) applies, each payment shall be regarded as
made for a separate supply to the extent of the amount of the payment
on the earlier of the date the payment is due or received.
(4) A person making a supply to which subsection (1)(a) or (b) applies shall
keep a record of the date on which the supply occurred as determined
under this Section.
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- 234 -
(5) In this Section, “rental agreement” means any agreement for the letting
of goods including a hire-purchase agreement or finance lease.
Substituted by
15. Place of Supply of Goods VAT (Am) Act 2011
(1) Except as otherwise provided under this Act, a supply of goods takes
place where the goods are delivered or made available by the supplier.
(2) A supply of thermal or electrical energy, heating, gas, refrigeration, air

conditioning, or water, takes place where the supply is received.
A supply of goods shall take place in Uganda if the goods are delivered or
made available in Uganda by the supplier, or if the delivery or making
available involves transportation, the goods are in Uganda when the
transportation commences.
16 Substituted by
16. Place of Supply of Services VAT (Am) Act 2011
(1) Except as otherwise provided under this Act, a supply of services takes
place where the services are rendered.
(2) A supply of services in connection with immovable property takes place

where the immovable property is located.
(3) A supply of services of, or incidental to, transport takes place where the
transport commences.
(4) A supply of services to which clause 1(a) of the Third Schedule applies
shall be regarded as having been made in Uganda.
(5) Where a person is required to pay a fee for receiving a signal or service
for a supply of television, radio, telephone or other communication
Substituted by services, the supply takes place where that person receives the signal or
Finance Act 2001
service, or where a supply involves an agent or any other person of whatever
description, the supply takes place at that person’s place of business.
(1) A supply of services shall take place in Uganda if the business of the
supplier from which the services are supplied is in Uganda.
(2) Notwithstanding subsection (1), a supply of services shall take place in

Uganda if the recipient of the supply is not a taxable person and–
(a) the services are physically performed in Uganda by a person who is

in Uganda at the time of supply;
_________________________________________________________________
- 235 -
(b) the services are in connection with immovable property in

Uganda;
(c) the services are radio or television broadcasting services received at

an address in Uganda;
(d) the services are electronic services delivered to a person in Uganda

at the time of supply;
(e) the supply is a transfer, assignment, or grant of a right to use a

copyright, patent, trademark or similar right in Uganda; or
(f) the services are telecommunication services initiated by a person in

Uganda other than a supply initiated by –
(i) a supplier of telecommunications services; or
(ii) a person who is roaming while temporarily in Uganda.
(3) For the purposes of subsection (2)(f), the person who initiates a supply
of telecommunications services shall be the person who first does any of
the following:–
(a) the person who –
(i) controls the commencement of the supply;
(ii) pays for the services;
(iii) contracts for the supply; or
(b) the person to whom the invoice for the supply is sent.
(4) Where the supplier of a telecommunications service cannot identify any

of the persons referred to in subsection (3) because it is impractical to
determine the physical location of a person due to the type of service or
to the class of customer to which the person belongs, the supplier shall,
in respect of all supplies of telecommunications services made for that
type of service or that class of customer, treat the supply as being made
where the physical residence or business address for the person
receiving invoices from the supplier is located.
(5) In this section –
_________________________________________________________________
- 236 -
(a) “electronic services” means any of the following, when provided or

delivered on or through a telecommunications network –
(i) websites, web-hosting or remote maintenance of programs and

equipment;
(ii) software and the updating of software;
(iii) images, text and information;
(iv) access to databases;
(v) self-education packages;
(vi) music, films and games including games of chance; or
(vii) political, cultural, artistic, sporting, scientific and other

broadcasts and events including television; and
(b) “telecommunications services” means the transmission, emission,

or reception of signals, writing, images, sounds, or information of
any kind by wire, radio, optical, or other electromagnetic systems
and includes –
(i) the related transfer or assignment of the right to use capacity

for such transmission, emission, or reception; and
(ii) the provision of access to global or local information networks,
but does not include the supply of the underlying writing, images,
sounds, or information.
17. Imports
An import of goods takes place –
(a) where customs duty is payable, on the date on which the duty is payable;
or
(b) in any other case, on the date the goods are brought into Uganda.
_________________________________________________________________
- 237 -
PART V - TAXABLE SUPPLIES
18. Taxable Supply
(1) A taxable supply is a supply of goods or services, other than an exempt

Inserted by supply, made in Uganda by a taxable person for consideration as part of
VAT (Am) Act 2011
his or her business activities.
(2) A supply is made as part of a person's business activities if the supply is

made by him or her as part of, or incidental to, any independent
economic activity he or she conducts, whatever the purposes or results of
that activity.
(3) The business activities of an individual do not include activities carried

on by him or her only as part of his or her hobby or leisure activities.
(4) A supply is made for consideration if the supplier directly or indirectly

receives payment for the supply, whether from the person supplied or any
other person, including any payment wholly or partly in money or kind.
(5) The application to own use by a taxable person of goods and services
Substituted by supplied to a person for the purposes of the person’s business activities shall
VAT (Am) Act 2009
be regarded as a supply of those goods and services for consideration as
part of the person’s business activities.
Inserted by
Finance Act
2001 and (5a) For the purposes of subsection (5), a supply of business goods and services
substituted by
VAT (Am) Act for no consideration is an application to own use.
2009
(6) Where goods and services have been supplied to a taxable person for the
purposes of the person’s business activities, the supply of those goods and
Substituted by
VAT (Am) Act 2009 services for reduced consideration shall be regarded as a supply for
consideration unless the goods and services are supplied or used only as
trade samples.
(7) A supply is made for reduced consideration if the supply is made between
associates for no consideration or between associates for a consideration
that is less than the fair market value of the supply.
(8) Notwithstanding subsection(1) a supply of services by a foreign person

for consideration as part of the person’s business activities is treated as a
taxable supply if the services are considered as taking place in Uganda
under Section 16.
_________________________________________________________________
- 238 -
(9) Subject to Section 19 and the Second Schedule, the sale or disposal of a
business asset by a taxable person is a taxable supply. Inserted by VAT (Am)
Act 2003 and Amended
by VAT (Am) Act 2006
19. Exempt Supply
(1) A supply of goods or services is an exempt supply if it is specified in the

Second Schedule.
(2) Where a supply is an exempt supply under paragraph 1(k) of the Second
Schedule, both the transferor and transferee shall, within 21 days of the
transfer, notify the Commissioner General in writing of the details of the
transfer.
20. Exempt Import
An import of goods is an exempt import if the goods –
(a) are exempt from customs duty under the Fifth Schedule of the East
African Community Customs Management Act, 2004 except compact
Substituted by
VAT (Am) Act 2005, fluorescent bulbs with a power connecting cap at the end, and lamps and bulbs
(AM) Act 2015 &
(AM) Act 2016
made from Light Emitting Diodes (LED) technology for domestic and industrial
use; or
(b) would be exempt had they been supplied in Uganda.

Inserted by
20A. Exempt Import Service VAT (Am) Act 2011
An import of a service is an exempt import if the service would be exempt

had it been supplied in Uganda.
PART VI - TAXABLE VALUE
21. Taxable Value of a Taxable Supply
(1) Except as otherwise provided under this Act, the taxable value of a
taxable supply is the total consideration paid in money or in kind by all
persons for that supply.
(2) The taxable value of –
(a) a taxable supply of goods by way of an application to own use;
(b) a taxable supply for reduced consideration; or
_________________________________________________________________
- 239 -
(c) a taxable supply described in Section 9(9),
is the fair market value of the goods and services at the time the supply is
made.
(3) Where a taxable supply is made without a separate amount of the

consideration being identified as a payment of tax, the taxable value of
that supply is the total amount of the consideration paid excluding tax.
(4) The taxable value of a taxable supply of goods under a rental agreement,
as defined in Section 14, is the amount of the rental payments due or
received.
(5) The taxable value of a taxable supply of goods or services where the
Inserted by Government has provided a subsidy is the consideration paid in money
VAT (Am) Act 1 2008
or in kind by all persons for that supply less the subsidy.
22. Adjustments
(1) This Section applies where, in relation to a taxable supply by a taxable

person –
(a) the supply is cancelled;
(b) the nature of the supply has been fundamentally varied or altered;
(c) the previously agreed consideration for the supply has been altered
by agreement with the recipient of the supply, whether due to an
offer of a discount or for any other reason; or
(d) the goods or services or part of the goods or services have been
returned to the supplier,
and the taxable person making the supply has –
(e) provided a tax invoice in relation to the supply and the amount
shown in the invoice as the tax charged on the supply is incorrect as
a result of the occurrence of any one or more of the above-
mentioned events; or
(f)
filed a return for the tax period in which the supply occurred and
has accounted for an incorrect amount of output tax on that supply
as a result of the occurrence of any one or more of the above-
mentioned events.
_________________________________________________________________
- 240 -
(2) Where subsection (1) applies, the taxable person making the supply shall
make an adjustment as specified in subsection (3) or (4).
(3) Where the output tax properly chargeable in respect of the supply
exceeds the output tax actually accounted for by the taxable person
making the supply, the amount of the excess shall be regarded as tax
charged by the person in relation to a taxable supply made in the tax
period in which the event referred to in subsection (1) occurred.
(4) Subject to subsection (6), where the output tax actually accounted for
exceeds the output tax properly chargeable in relation to that supply, the
taxable person making the supply shall be allowed a credit for the
amount of the excess in the tax period in which the event referred to in
subsection (1) occurred.
(5) The credit allowed under subsection (4) shall, for the purposes of this
Act, be treated as a reduction of output tax.
(6) No credit is allowed under subsection (4) where the supply has been
made to a person who is not a taxable person, unless the amount of the
excess tax has been repaid by the taxable person to the recipient, whether
in cash or as a credit against any amount owing to the taxable person by
the recipient.
23. Taxable Value of an Import of Goods
The taxable value of an import of goods is the sum of –
(a) the value of the goods ascertained for the purposes of customs duty under
the laws relating to customs;
(b) the amount of customs duty, excise tax, and any other fiscal charge other
than tax payable on those goods; and
(c) the value of any services to which Section 12(3) applies which is not
otherwise included in the customs value under paragraph (a).
PART VII -CALCULATION OF TAX PAYABLE
24. Calculation of Tax Payable on a Taxable Transaction
(1) Subject to subsection (2), the tax payable on a taxable transaction is

calculated by applying the rate of tax to the taxable value of the
transaction.
_________________________________________________________________
- 241 -
(2) Where the taxable value is determined under Section 21(2) or (3), the tax
payable is calculated by the formula specified in Section 1(a) of the
Fourth Schedule.
(3) Subject to subsection (4), the rate of tax shall be as specified in Section
78(2).
(4) The rate of tax imposed on taxable supplies specified in the Third
Schedule is zero.
(5) The tax payable on a taxable supply made by a contractor to a licensee to

Inserted by
undertake mining or petroleum operations is deemed to have been paid
VAT (Am) Act 2015 by the licensee to the contractor provided the supply is for use by the
licensee solely and exclusively for mining or petroleum operations.
(6) For the purposes of this section, the tax payable on a taxable supply
Inserted by
made by a supplier to a contractor executing an aid-funded project is
VAT (Am) Act 2016 deemed to have been paid by the contractor provided the supply is for use
by the contractor solely and exclusively for the aid funded project.
(7) For purposes of this section, the tax payable on a taxable supply made to
a Government ministry, department or agency by a contractor executing
7 & 8 Inserted by
VAT (Am) Act 2017
an aid-funded project is deemed to have been paid by that ministry,
department or agency if the supply is for use solely and exclusively for
the aid-funded project.
(8) Under subsection (7), “aid-funded project” means a project financed by a

foreign government or a development agency through loans, grants and
donations.
25. Calculation of Tax Payable by a Taxable Person for a Tax Period
(1) Subject to Section 26, the tax payable by a taxable person for a tax period
Amended by is calculated according to the formula specified in Section 1(b) of the
VAT (Am) Act 2015
Fourth Schedule.
(2) For a contractor [or supplier], component X of the formula in paragraph 1(b)
(2) & (3) inserted by of the Fourth Schedule, for a tax period does not include the amount of
VAT (Am) Act 2015
& substituted by
tax that the licensee [or supplier] is deemed to have paid to the contractor
VAT (Am) Act 2016 [or supplier] under section 24(5) [or (6)] for the period.
& (Am) Act 2017
(2a) For a supplier, component X of the formula in paragraph 1(b) of the

Inserted by Fourth Schedule, for a tax period does not include the amount of tax
VAT (Am) Act 2017
_________________________________________________________________
- 242 -
that the contractor is deemed to have paid to the supplier under section
24(6) for the period.
(3) For a licensee, component Y of the formula in paragraph 1(b) of the

Fourth Schedule for a tax period does not include the amount of tax that
the licensee is deemed to have paid to the contractor under section 24(5)
for the period.
(4) For a contractor of a Government ministry, department or agency,

component X of the formula in paragraph 1(b) of the Fourth Schedule,
Inserted by for a tax period does not include the amount of tax that the Government
VAT (Am) Act 2017
ministry, department or agency is deemed to have paid to the contractor
under section 24(7) for the period.
26. Cash Basis Accounting
(1) This Section applies to a taxable person, the annual value of whose
Substituted by taxable supplies does not exceed five hundred million shillings [two hundred
VAT (Am) Act 2015
million shillings].
(2) A taxable person to whom this Section applies may elect to account for
tax purposes on a cash basis.
(3) An election under subsection (2) shall be made in writing to the

Commissioner General by the due date for the first return in which the
taxable person seeks to use the method of accounting specified in
subsection (2).
(4) Where a taxable person makes an election under subsection (2), that
person must account for both the output tax payable and the input tax
credited on a cash basis.
(5) A taxable person who has made an election under subsection (2) shall
determine the tax payable for a tax period according to the formula
specified in Section 1(c) of the Fourth Schedule.
(6) An election made under subsection (2) remains in force until –
(a) withdrawn by the taxable person by notice in writing to the

Commissioner General; or
(b) the Commissioner General, by notice in writing to the taxable

person, requires the person to determine the tax payable for a tax
period in accordance with Section 25.
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(7) A taxable person who has made an election under subsection (2) may not
withdraw the election within two years after making the election unless
the person is no longer a person to whom this Section applies.
27. Consequences of a Change in Accounting Basis
(1) Every taxable person whose accounting basis is changed is liable for tax,
if any, as determined under this Section in the tax period in which the
change occurred.
(2) Where a taxable person changes from the method of accounting provided
under Section 25 (referred to as the “invoice basis”) to the method of
accounting provided under Section 26 (referred to as the “cash basis”),
the tax payable under subsection (1) is determined in accordance with the
formula specified in Section 1(d) of the Fourth Schedule.
(3) Where a taxable person changes from a cash basis to an invoice basis of
accounting, the tax payable under subsection (1) is determined in
accordance with the formula specified in Section 1(e) of the Fourth
Schedule.
(4) If the amount determined in accordance with subsection (2) or (3) is

negative, it shall be refunded to the taxable person in accordance with
Section 42(1).
28. Credit for Input Tax
(1) Where Section 25 applies for the purposes of calculating the tax payable
by a taxable person for a tax period, a credit is allowed to the taxable
person for the tax payable in respect of –
(a) all taxable supplies made to that person during the tax period; or
Repealed by
VAT (Am) Act 2012 (b) all imports of goods [and services] made by that person or import of
& inserted by
VAT (AM) Act services made by a contractor or licensee or a person providing business
2015 & 2016
process outsourcing services during the tax period,
if the supply or import is for use in the business of the taxable person.
(2) Where Section 26 applies for the purposes of calculating the tax payable
by a taxable person for a tax period, a credit is allowed to the taxable
person for any tax paid in respect of taxable supplies to, or imports by,
the taxable person where the supply or import is for use in the business of
the taxable person.
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(3) A credit is allowed to a taxable person on becoming registered for input

tax paid or payable in respect of –
(a) all taxable supplies of goods, including capital assets, made to the
person prior to the person becoming registered; or
(b) all imports of goods, including capital assets, made by the person
prior to becoming registered,
where the supply or import was for use in the business of the taxable
Substituted and person, provided the goods are on hand at the date of registration and
Repealed by
Finance Act 2001
provided that the supply or import occurred not more than six months
prior to the date of registration. [or, in the case of capital goods, not more
than six months before the date of registration.]
(4) An input tax credit –
(a) under subsection (1) arises on the date the goods or services are
supplied to, or imported by, the taxable person;
(b) under subsection (2) arises on the date the tax is paid; or
(c) under subsection (3) arises on the date of registration.
(5) A taxable person under this Section shall not qualify for input tax credit
in respect of a taxable supply or import of –
(a) a passenger automobile, and the repair and maintenance of that

automobile, including spare parts, unless the automobile is acquired
by the taxable person exclusively for the purpose of making a
taxable supply of that automobile in the ordinary course of a
continuous and regular business of selling or dealing in or hiring of
passenger automobiles;
(b) entertainment unless the taxable person –
(i) is in the business of providing entertainment; or
(ii) supplies meals or refreshments to his or her employees in

premises operated by him or her, or on his or her behalf, solely
for the benefit of his or her employees; or
(c)telephone services, to the extent of 10 per cent of the input tax on

those services.
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(6) Subject to subsection (7), where a taxable supply to, or an import

of goods by, a taxable person is partly for a business use as set
out in subsection (1), (2), or (3) and partly for another use, the amount of
the input tax allowed as a credit is that part of the input tax that relates to
the business use.
(7) Subject to subsections (8) and (9) [(9) and (10)], the input tax that may be
Substituted by credited by a taxable person for a tax period is –
VAT (Am) Act 2014
(a) where all of the taxable person's supplies for that period are taxable
supplies, the whole of the input tax specified in subsection (1) or (2);
or
(b) where only part of the taxable person's supplies for that period are
taxable supplies, the amount calculated according to the formula
specified in Section 1(f) of the Fourth Schedule.
(8) Where the fraction B/C in Section 1(f) of the Fourth Schedule is less than
0.05, the taxable person may not credit any input tax for the period.
(9) Where the fraction B/C in section 1(f) of the Fourth Schedule is more
than 0.95, the taxable person may credit all input tax for the period.
(10) Notwithstanding subsection (7)(b), the Commissioner General may

approve a proposal by a taxable person for the apportionment of input
tax credit where the taxable person makes both taxable and exempt
supplies.
(11) Subject to subsection (13), an input tax credit allowed under this Section
may not be claimed by the taxable person until the tax period in which
the taxable person has –
(a) an original tax invoice for the taxable supply; or
(b) a bill of entry or other document prescribed under the East African
Substituted by
VAT (Am) Act 2014 Community Customs Management Act, 2004 evidencing the amount of
input tax.
(12) Where a taxable person does not have a tax invoice evidencing the input
tax paid, the Commissioner General may allow an input tax credit in the
tax period in which the credit arises where the Commissioner General is
satisfied that –
(a) the taxable person took all reasonable steps to acquire a tax invoice;
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(b) the failure to acquire a tax invoice was not the fault of the taxable
person; and
(c) the amount of input tax claimed by the taxable person is correct.
(13) Where a taxable person has made a calculation under subsection (7) for
any tax period of a calendar year, he or she shall, in the first tax period of
the following year, make a calculation based on the annual value of
taxable and exempt supplies.
(14) Where –
(a) the calendar year credit exceeds the return credit, the excess shall be
claimed as a credit in the first tax period of the following calendar
year; or
(b) the return credit exceeds the calendar year credit, the excess shall be
regarded as tax charged by the taxable person in relation to a taxable
supply made in the first tax period of the following calendar year.
(a) “calendar year credit” means the total input tax payable, where
Section 25 applies, or paid, where Section 26 applies for the
calendar year;
(b) “entertainment” means the provision of food, beverages, tobacco,

accommodation, amusement, recreation, or hospitality of any kind;
(c) “passenger automobile” means a road vehicle designed solely for

the transport of sitting persons;
(d) “return credit” means the total of the input tax claimed as a credit in
each tax period of the calendar year; and
(e) “telephone services” does not include telephone call services

supplied to a hotel, lodge or similar establishment where output
tax has been accounted for by the establishment on the supply of
that service to their customers.
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29. Tax Invoices
(1) A taxable person making a taxable supply to any person shall provide
that other person, at the time of supply, with an original tax invoice for
the supply.
(2) A taxable person making a taxable supply shall retain one copy of the tax
invoice referred to in subsection (1).
(3) Where a supplied person loses the original tax invoice, the supplier may
provide a duplicate copy clearly marked ‘COPY’.
(4) An original tax invoice shall not be provided in any circumstance other
than that specified in subsection (1).
(5) A person –
(a) who has not received a tax invoice as required by subsection (1);
or
(b) to whom Section 28(3) applies,
may request a person, who has supplied goods or services to him or her,
to provide a tax invoice in respect of the supply.
(6) A request for a tax invoice under subsection (5) shall be made –
(a) in the case of a request under subsection (5)(a), within thirty days
after the date of the supply;
(b) in the case of a request under subsection (5)(b), within thirty days
after the date of registration.
(7) A taxable person who receives a request under subsection (5) shall
comply with the request within fourteen days after receiving that
request.
(8) A tax invoice is an invoice containing the particulars specified in Section

2 of the Fourth Schedule.
30. Credit and Debit Notes
(1) Where a tax invoice has been issued in the circumstances specified in
Section 22(1)(e) and the amount shown as tax charged in that tax invoice
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exceeds the tax properly chargeable in respect of the supply, the taxable
person making the supply shall provide the recipient of the supply with a
credit note containing the particulars specified in Section 3 of the Fourth
Schedule.
(2) Where a tax invoice has been issued in the circumstances specified
in Section 22(1)(e) and the tax properly chargeable in respect of the
supply exceeds the amount shown as tax charged in that tax invoice, the
taxable person making the supply shall provide the recipient of the supply
with a debit note containing the particulars specified in Section 4 of the
Fourth Schedule.
PART VIII - PROCEDURE AND ADMINISTRATION OF TAX
Ss.31 – 40 Repealed by TPC Act 2014 Returns and Assessments
31. Returns
32. Assessments
33. General Provisions relating to Assessments
Sections 33A-E
Inserted by
Finance Act 2001
PART VIIIA - OBJECTIONS AND APPEALS
33A. Interpretation
33B. Objections to Assessment
33C. Appeals to Tax Appeals Tribunal
33D. Appeals to High Court
33E. Burden of Proof
34. Due Date for Payment of Tax

35. Tax as a Debt Due to Government
36. Security
37. Preferential Claim to Assets
38. Seizure of Goods
39. Closure of Business and Distress Proceedings
40. Recovery of Tax from Third Parties
41. Duties of Receivers
(1) A receiver shall in writing notify the Commissioner General within

fourteen days after being appointed to the position of receiver or taking
possession of an asset in Uganda, whichever first occurs.
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(2) The Commissioner General may in writing notify a receiver of the

amount which appears to the Commissioner General to be sufficient to
provide for any tax which is or will become payable by the person whose
assets are in the possession of the receiver.
(3) A receiver shall not part with any asset in Uganda, which is held by the
receiver in his or her capacity as receiver without the prior written
permission of the Commissioner General.
(4) A receiver –
(a) shall set aside, out of the proceeds of the sale of an asset, the amount
notified by the Commissioner General under subsection (2), or such
lesser amount as is subsequently agreed on by the Commissioner
General;
(b) is liable to the extent of the amount set aside for the tax of the
person who owned the asset; and
(c) may pay any debt that has priority over the tax referred to in this
Section notwithstanding any provision of this Section.
(5) A receiver is personally liable to the extent of any amount required to be

set aside under subsection (4) for the tax referred to in subsection (2) if,
and to the extent that, the receiver fails to comply with the requirements
of this Section.
(6) In this Section, “receiver” includes a person who, with respect to an asset
in Uganda, is –
(a) a liquidator of a company;
(b) a receiver appointed out of court or by a court;
(c) a trustee for a bankrupt person;
(d) a mortgagee in possession;
(e) an executor of a deceased person; or
(f) any other person conducting the business of a person legally

incapacitated.
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Refund of Tax
42. Refund of Overpaid Tax
(1) If, for any tax period, a taxable person's input tax credit exceeds his or
her liability for tax for that period, the Commissioner General shall
refund him or her the excess within one month of the due date for the
return for the tax period to which the excess relates, or within one month
of the date when the return was made if the return was not made by the
due date.
(2) Notwithstanding subsection (1), the Commissioner General –
(a) shall, where the taxable person’s input credit exceeds his or her
Substituted by
liability for tax for that period by less than five million shillings,
VAT (Am) Act 2015 except in the case of a licensee [an investment trader] or person
providing mainly zero rated supplies, offset that amount against
the future liability of the taxable person; and
(b) may, with consent of the taxable person, where the taxable
Substituted by
VAT (Am) Act 2002
person’s input credit exceeds his or her liability for tax for that
period by five million shillings or more, offset that amount against
the future liability of the taxable person, or apply the excess in
reduction of any other tax not in dispute due from the taxpayer.
(2a) [Where goods in stock are lost due to theft or fire and input tax has been
paid on those goods, the Commissioner General may grant a refund or
Inserted by allow credit for the input tax paid on those goods if there is evidence
Finance Act 2001
And substituted by
that the goods are lost and cannot be recovered] If for any tax period
VAT (Am) Act 2013 taxable supplies in stock or stock in transit are lost due to theft, fire,
accident, or force majeure and input tax has been paid on those goods,
the Commissioner General may grant a refund or allow credit for the
input tax paid on those goods if there is evidence that the goods are
destroyed or lost and cannot be recovered.
(3) A person may claim a refund of any output tax paid in excess of the
amount of tax due under this Act for a tax period.
(4) A claim for a refund under subsection (3) shall be made in a return
within three years after the end of the tax period in which tax was
overpaid.
(5) Where a person has claimed a refund under subsection (3) and the
Commissioner General is satisfied that the person has paid an amount
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of tax in excess of the amount of tax due, the Commissioner General

shall refund immediately the excess to the taxable person.
(6) Where a person claiming a refund is required by the Commissioner

General to provide accounts or records to substantiate the claim and
fails to do so in a manner satisfactory to the Commissioner General
within seven days of being requested, the time period specified in
subsection (1) for making the refund shall not be binding on the
Commissioner General.
(7) The Commissioner General shall serve on a person claiming a refund a

notice in writing of a decision in respect of the claim.
(8) A person dissatisfied with a decision under subsection (6) may only
challenge the decision under Part IV of the Tax Appeals Tribunal Act.
(9) No refund shall be made under subsection (5) in relation to a taxable

supply that has been made to a person who is not a taxable person,
unless the Commissioner General is satisfied that the amount of the
excess tax has been repaid by the taxable person to the recipient,
whether in cash or as a credit against an amount owing to the taxable
person by the recipient.
43. Refund of Tax for Bad Debts
(1) Where a taxable person has supplied goods or services for a

consideration in money, and has –
(a) paid the full tax on the supply to the Commissioner General, but
has not within two years after the supply received payment, in
whole or in part from the person to whom the goods or services are
supplied; and
(b) taken all reasonable steps to the satisfaction of the Commissioner

General, to pursue payment and he or she reasonably believes that
he or she will not be paid,
that person may seek a refund of that portion of the tax paid for which
he or she has not received payment.
(2) If a refund is taken under subsection (1) and the taxable person later
receives payment in whole or in part, in respect of the debt, he or she
shall remit to the Commissioner General, with his or her next tax
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return, a sum equal to the portion of the payment that represents the tax
refunded.
(3) A registered supplier who fails to remit the tax in accordance with
subsection (2) with his or her next return, commits an offence and is
liable on conviction to a fine not exceeding five hundred thousand
shillings, in addition to the payment of the full amount of the
undeclared tax plus a penal tax on that outstanding tax calculated at the
rate specified in the Fifth Schedule.
44. Interest on Overpayments and Late Refunds
(1) Where the Commissioner General is required to refund an amount of

tax to a person as a result of –
(a) a decision under Section 33B;

Substituted by
VAT (Am No.2)
Act 2002
(b) a decision of the Tax Appeals Tribunal; or
(c) a decision of the High Court, the Court of Appeal or the Supreme
Court,
he or she shall pay interest at a rate of 2% per month compounded on

the tax to be refunded.
(2) Where the Commissioner General fails to make a refund required under
Substituted by
Section 42(1) within the time specified in that Section, he or she shall
VAT (Am No.2)
Act 2002
pay interest at a rate of 2% per month compounded on the amount of
refund for the period.
(3) Where the Commissioner General finds, after conducting an

investigation of any amount shown as an excess in terms of Section
Substituted by VAT
(Am No.2) Act 2002
42(1), that the excess amount of input tax credit is greater than the true
amount due in excess of not less than fifty thousand shillings, no
interest shall be payable under subsection (2) where there has been a
delay in making the refund.
(4) Notwithstanding subsection (1), a taxpayer who causes delay in

determining a correct refund payable to him or her, and leading to a
Inserted by VAT
(Am No.2) Act 2002
belated refund process, is only entitled to interest with effect from sixty
days from the date on which he or she filed his or her delayed return,
lodged an application with the Tax Appeals Tribunal or the High
Court, or submitted to the Commissioner General all necessary and
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satisfactory information required in relation to the refund in question,

whichever is the later.
45. Refund of Tax to Diplomats and Diplomatic and Consular Missions

and International Organisations
(1) The Minister may, with the concurrence of the Minister responsible for
Foreign Affairs, authorise the granting of a refund in respect of tax paid
or borne by –
(a) any person enjoying full or limited immunity, rights or privileges

under any local or international laws applicable in Uganda or
under recognised principles of international law; or
(b) any diplomatic or consular mission of a foreign country or any

public international organisation established in Uganda or listed in
the First Schedule to this Act relating to transactions concluded for
its official purposes.
(2) The refund provided for in subsection (1)(a) shall not be available to any
citizen or permanent resident of Uganda.
(3) Any claim for a refund of tax under this Section shall be made in such
form and at a time that the Commissioner General may prescribe and
shall be accompanied by proof of payment of tax.
(4) The Minister may make regulations specifying conditions to be met or

restrictions to apply for claiming or granting of tax refunds under this
Section.
Ss.46 -64 Repealed by TPC Act 2014 Records and Investigation Powers
46. Records
47. Access to Books, Records and Computers
48. Notice to Obtain Information or Evidence
49. Books and Records not in English Language
50. Taxpayer Identification Number
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Offences and Penal Tax
51. Offences related to Registration

52. Offences related to Tax Invoices, Credit Notes, and Debit Notes
53. Failure to Lodge a Return
54. Failure to Comply with Recovery Provision
55. Failure to Maintain Proper Records
56. Failure to Provide Reasonable Assistance
57. Failure to Comply with Section 48 or 49 Notice
58. Improper Use of Taxpayer Identification Number
59. False or Misleading Statements
60. Obstructing an Officer of the Authority
61. Offences by Officers and other Persons
62. Offences by Companies
63. Officer may appear on behalf of Commissioner General
64. Compounding of Offences
65. Penal Tax
(1) A person who fails to apply for registration as required by Section 7(1)
or (5) is liable to pay a penal tax equal to double the amount of tax
payable during the period commencing on the last day of the
application period in Section 7(1) until either the person files an
application for registration with the Commissioner General or the
Commissioner General registers the person under Section 8(6).
(2) A person who fails to lodge a return within the required time under this
Act is liable to pay a penal tax amounting to whichever is the greater of
the following:
(a) two hundred thousand shillings; or
(b) an interest charge for the period the return is outstanding

calculated according to the formula specified in the Fifth Schedule.
(3) A person who fails to pay tax imposed under this Act on or before the
due date is liable to pay a penal tax on the unpaid tax at a rate specified
in the Fifth Schedule for the tax which is outstanding.
(4) If a person pays a penal tax under subsection (3) and the tax to which it
relates is found not to have been due and payable by the person and is
refunded, then the penal tax, or so much of the penal tax as relates to
the amount of the refund, shall also be refunded to that person.
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(5) A person who fails to maintain proper records in a tax period in

accordance with the requirements of this Act is liable to pay a penal tax
equal to double the amount of tax payable by the person for the tax
period.
(6) Where a person knowingly or recklessly –
Substituted by
(a) makes a statement or declaration to an official of the Uganda
VAT (Am) Act 2 2008 Revenue Authority that is false or misleading in a material
particular; or
(b) omits from a statement made to an official of the Uganda Revenue

Authority any matter or thing without which the statement is
misleading in a material particular, and
(i) the tax properly payable by the person exceeds the tax that
was assessed as payable based on the false or misleading
information;
(ii) the amount of the refund claimed was false; or
(iii) the person submitted a return with an incorrect offset claim,
that person is liable to pay penal tax equal to double the amount
of the excess tax, refund or claim.
(7) Section 59(4) applies in determining whether a person has made a

statement to an official of the Uganda Revenue Authority.
65A. Interest on Unpaid Tax Inserted by

VAT (Am) Act 2017
(1) The interest due and payable on unpaid tax shall not exceed the
aggregate of the principal and penal tax.
(2) For the avoidance of doubt, where the interest due and payable as at
30th June 2017 exceeds the aggregate referred to in subsection (1), the
interest in excess of the aggregate shall be waived.
(1) Where good cause is shown, in writing, by the person liable to pay a
penal tax, the Commissioner General may remit in whole or part any
penal tax payable other than the penal tax imposed or payable under
Section 65 for late payment.
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(2) Subject to subsection (3), the imposition of a penal tax is in addition to

any penalty imposed as a result of a conviction for an offence under
Sections 51 to 64.
(3) No penal tax is payable under Section 65 where the person has been
convicted of an offence under Section 51, 55, or 59 in respect of the
same act or omission.
(4) If a penal tax under Section 65 has been paid and the Commissioner
General institutes a prosecution proceeding under Section 51, 55 or 59
in respect of the same act or omission, the Commissioner General shall
refund the amount of penal tax paid; and that penal tax is not payable
unless the prosecution is withdrawn.
(5) Penal tax shall for all purposes of this Act be treated as a tax of the
same nature as the output tax to which it relates and shall be payable in
and for the same tax period as that output tax.
(6) Penal tax shall be assessed by the Commissioner General in the same
manner as the output tax to which it relates and an assessment of penal
tax shall be treated for all purposes as an assessment of tax under this
Act.
(1) Where the Commissioner General is of the opinion that the whole or
any part of the tax due under this Act from a taxpayer cannot be
effectively recovered by reason of –
(a) considerations of hardship; or
(b) impossibility, undue difficulty, or the excessive cost of recovery,
the Commissioner General may refer the taxpayer’s case to the

Minister.
(2) Where the taxpayer’s case has been referred to the Minister under
subsection (1) and the Minister is satisfied that the tax due cannot be
effectively recovered, the Minister may remit or write off, in whole or
part, the tax due from the taxpayer.
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PART IX - GENERAL PROVISIONS Ss.68 -70A Repealed by

TPC Act 2014
68. Form, Authentication and Availability of Documents

68A. Use of Information Technology
68B. Cancellation of Registration
68C. Offences
69. Service of Notices and Other Documents
70. Nominated Person
70A. VAT Representatives of Non-Resident Persons
71. Application of Act to Partnerships and Unincorporated Associations
(1) This Act applies to a partnership as if the partnership were a person, but
with the following changes –
(a) obligations that would be imposed on the partnership are imposed

on each partner, but may be discharged by any of the partners;
(b) the partners are jointly and severally liable to pay any amount that
would be payable by the partnership; and
(c) any offence under this Act that would otherwise be committed by
the partnership is taken to have been committed by each of the
partners.
(2) This Act applies to an unincorporated association as if it were a person,

but the obligations that would be imposed on the association are
imposed on each member of the committee of management of the
association, but may be discharged by any of those members.
(3) In a prosecution of a person for an offence that the person is taken to

have committed under subsection (1)(c), it is a defence if the person
proves that he or she –
(a) did not aid, abet, counsel, or procure the relevant act or omission;
and
(b) was not in any way knowingly concerned in, or party to, the
relevant act or omission.
72. Trustee
A person who is a trustee in more than one capacity is treated for the
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purposes of this Act as a separate person in relation to each of those

capacities.
73. Currency Conversion
(1) For the purposes of this Act, all amounts of money are to be expressed
in Uganda shillings.
(2) Where an amount is expressed in a currency other than Uganda

shillings, the amount shall be converted into the Uganda shillings using
the weighted selling rates of the previous month for the currency
concerned.
74. Prices Quoted to include Tax
Any price advertised or quoted for a taxable supply shall include tax and the
advertisement or quotation shall state that the price includes the tax.
75. Schemes for obtaining Undue Tax Benefits
(1) Notwithstanding anything in this Act, if the Commissioner General is

satisfied that a scheme has been entered into or carried out where–
(a) a person has obtained a tax benefit in connection with the scheme;
and
(b) having regard to the substance of the scheme, it would be

concluded that the person, or one of the persons, who entered into
or carried out the scheme did so for the sole or dominant purpose
of enabling the person to obtain the tax benefit,
the Commissioner General may determine the liability of the person

who has obtained the tax benefit as if the scheme had not been entered
into or carried out, or in a manner as in the circumstances the
Commissioner General considers appropriate for the prevention or
reduction of the tax benefit.
(a) “scheme” includes any agreement, arrangement, promise, or

undertaking whether express or implied and whether or not
enforceable, or intended to be enforceable, by legal proceedings,
and any plan, proposal, course of action, or course of conduct;
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(b) “tax benefit” includes –
(i) a reduction in the liability of any person to pay tax;
(ii) an increase in the entitlement of a person to a credit or

refund; or
(iii) any other avoidance or postponement of liability for the

payment of tax.
(1) To the extent that the terms of a treaty or other international agreement
to which Uganda is a party are inconsistent with the provisions of this
Act, apart from Section 75, the terms of the treaty or international
agreement prevail over the provisions of this Act.
(2) In this Section, “international agreement” means an agreement between

Uganda and a foreign government or a public international
organisation.
77. Priority of Schedules
Where a supply of goods or services may be covered by both the Second

Schedule and the Third Schedule, the supply shall be treated as being within
the Third Schedule.
78. Regulations and Amendment of Schedules
(1) The Minister may make regulations for the better carrying into effect of
the provisions and purposes of this Act.
(2) The Minister may by Statutory Order specify the rates of tax payable
under this Act; and the Order shall cease to have effect unless it is
introduced into Parliament within three months from the date of its
publication and Parliament approves a resolution confirming that
Order.
(3) The Minister may, with the approval of Cabinet, make regulations
amending the First, Second and Third Schedules.
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78A. Supremacy of the Act
Where there is any inconsistency between this Act and any other law
prescribing a rate of tax, this Act shall prevail.
79. Practice Notes S.79, 80 & 81 inserted by VAT (Am) Act 2005.
80. Private Rulings S.79 & 80 Repealed by TPC Act 2014
Where an international agreement entered into between the Government of

Uganda and the government of a foreign country or an international
organisation, provides tax reliefs to a foreign government or an international
organisation, the provisions relating to tax reliefs or benefits shall have
effect:–
(a) on the ratification of the agreement by the Cabinet; and
(b) upon approval by Parliament.
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FIRST SCHEDULE
Ss.1 & 45
Public International Organisations
Inserted by
VAT (Am) Act 2005 African Development Bank (ADB)
Inserted by
Finance Act 2001
African Development Foundation (ADF)
Inserted by
VAT (Am) Act 2 2008
African Union (AU)
Aga Khan Development Network, Uganda, and the following

agencies:–
(i) Aga Khan Foundation, Uganda;
Inserted by
(ii) Aga Khan Education Service, Uganda;
VAT (Am) Act 2003
(iii) Aga Khan Health Service, Uganda;
(iv) Aga Khan Trust for Culture; and
(v) Aga Khan University, Uganda.

Inserted by
VAT (Am) Act 2012 Austrian Development Agency (ADA)
Inserted by
VAT (Am) Act 2 2008 Belgian Technical Cooperation (BTC)
Danish International Development Agency (DANIDA)

Inserted by
VAT (Am) Act 2012
Department for International Development (DFID)
Desert Locust Control Organisation for Eastern Africa (DLCOEA)

Substituted by
VAT (Am) Act 2012 Deutsche Geselleschaft fur Internationale Zusammenarbeit (GTZ)
Inserted by
VAT (Am) Act 2003
Common Market for East and Southern Africa (COMESA)
Inserted by
VAT (Am) Act 2005
and substituted by East African Community, its Organs and Institutions
VAT (Am) Act 2013
East African Development Bank (EADB)
Eastern and Southern Africa Management Institute (ESAMI)

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European Union (EU)
Food and Agricultural Organisation (FAO)

Inserted by
VAT (Am) Act 2012 French Development Agency (Agence Française de Development)
and substituted by
VAT (Am) Act 2013 (FDA)
Inserted by
VAT (Am) Act 2015 Global Fund to fight AIDS, Malaria and Tuberculosis
Inserted by
VAT (Am) Act 2003
Icelandic International Development Agency (ICEADA)
Inserted by
VAT (Am) Act 2 2008 IGAD Regional HIV and AIDS Partnership Programme (IRAPP)
International Atomic Agency (IAA)
International Civil Aviation Organisation (ICAO)
International Committee of the Red Cross (ICRC)

Inserted by
VAT (Am) Act 2 2008
International Criminal Court (ICC)
Inserted by International Labour Organisation (ILO)

VAT (Am) Bill
2008
International Monetary Fund (IMF)
Inserted by
VAT (Am) Act 2003 International Organisation for Migration (IOM)
International Telecommunications Union (ITU)

Substituted by
VAT (Am) Act 2012 Japan International Cooperation Agency (JICA)
Korea International Cooperation Agency (KOICA)

Inserted by
VAT (Am) Act 2012
Kreditanstalt fur Wiederaufbau (KFW)
Medical Research Council
Netherlands Development Organisation (SNV)

Inserted by
VAT (Am) Act 2003 Nile Basin Initiative
Substituted by
VAT (Am) Act 2012 Norwegian Agency for Development Cooperation (NORAD)
Repealed by
VAT (Am) Act 2 2008
[Organisation of African Unity (OAU)]
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Inserted by
VAT (Am) Act 2012 Swedish International Development Agency (SIDA)
Inserted by
VAT (Am) Act 2015 Uganda Red Cross Society
Union of National Radio and Television Organisations of Africa

(UNRTNA–PEC)
United Nations African Institute for the Prevention of Crime and the
Treatment of Offenders (UNAFRI)
United Nations Children’s Fund (UNICEF)
United Nations Development Programme (UNDP)
United Nations Fund for Population Activities (UNFPA)
United Nations High Commission for Refugees (UNHCR)
United States Agency for International Development (USAID)
Universal Postal Union (UPU)
World Bank
World Food Programme (WFP)
World Health Organisation (WHO)
World Meteorological Organisation (WMO)
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SECOND SCHEDULE
S.19
Exempt Supplies
1. The following supplies are specified as exempt supplies for the purposes
of Section 19 –
Substituted by
VAT (Am) Act 2013
(a) the supply of livestock, unprocessed foodstuffs and unprocessed
(Am) Act 2016 & agricultural products, except wheat grain; [and livestock]
(Am) Act 2017
(b) the supply of postage stamps;
(c) the supply of financial services;
Substituted by (d) the supply of [insurance services]

VAT (Am) Act 2014
i) health insurance services [w.e.f July 2014]
ii) life insurance services [w.e.f July 2014]
iii) micro insurance services [w.e.f November 2014]
iv) re-insurance services [w.e.f November 2014]
Inserted by
Finance Act 2001
(e) the supply of unimproved land;
(f) a supply by way of sale, leasing or letting of immovable property,

other than –
NB: The supply of
residential dwelling units i) a sale, lease or letting of commercial premises;
was a taxable supply at 5%
from July 2007 to June
2009 ii) a sale, lease or letting for parking or storing cars or other
vehicles;
Substituted by
VAT (Am) Act 2009
iii) a sale, lease or letting of hotel or holiday accommodation;
iv) a sale, lease or letting for periods not exceeding three months;
or
v) a sale, lease or letting of service apartments;
(g) the supply of education services;
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Inserted by (h) the supply of veterinary, medical, dental, and nursing services;
VAT (Am) Act 1
2008
(i) the supply of social welfare services;

Repealed by
VAT (Am) Act 2011
And reinstated by (j) the supply of betting, lotteries, and games of chance;
VAT (Am) Act 2012
(k) the supply of goods as part of the transfer of a business as a going

concern by one taxable person to another taxable person;
(l) the supply of burial and cremation services;
(m) the supply of precious metals and other valuables to the Bank of
Uganda for the State Treasury;
(n) the supply of passenger transportation services (other than Tour

and Travel operators);
(o) the supply of petroleum fuels subject to excise duty, (motor spirit,
Substituted by VAT
kerosene and gas oil), spirit type jet fuel, kerosene type jet fuel and
(Am No.2) Act 2002 residual oils for use in thermal power generation to the national
& (Am) Act 2 2008
grid;
Repealed by
VAT (Am) (p) the supply of milk, including milk treated in any way to preserve it
Act 2002
(q) the supply of dental, medical, and veterinary goods [equipment and
ambulances] and for the purposes of this subparagraph “goods” means:
Inserted by
VAT (Am) Act 2011
and substituted by
VAT (Am) Act 2013 (i) dental, medical and veterinary equipment;
(ii) ambulances;
(iii) contraceptives of all forms;
(iv) maternity kits (mama kits);
(v) medical examination gloves;
(vi) medicated cotton wool;
(vii) mosquito nets, acaricides, insecticides and mosquito
repellent devices; and
(viii) diapers.
Inserted by
(qa) the supply of animal feeds and premixes VAT (Am) Act 2017
Inserted by Finance Act 2001;

(r) the supply of feeds for poultry and livestock; Repealed by VAT (Am) Act 2014
_________________________________________________________________
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(s) the supply of machinery [used for the processing of agricultural or

dairy products], tools and implements suitable for use only in
Inserted by agriculture, and for the purposes of this subparagraph,
Finance Act 2001&
Substituted by
“machinery, tools and implements” means;
VAT (Am) Act 2014
i) knapsack sprayers; xx) dairy machinery;

ii) ox ploughs; xxi) grain cleaners and
iii) drinkers and feeders for sorters;
chicken; xxii) feed grinders
iv) agricultural tractors hatcheries;
(including walking xxiii) implements used for
tractors); artificial insemination
v) disk harrows; xxiv – xxxv
in animals
vi) cultivators; Inserted by xxiv) hullers;
VAT (Am) Act 2016
vii) ploughs; xxv) oil press;
viii) weeders; xxvi) tillers;
ix) seeders; xxvii) grain dryers;
x) planters; xxviii) manure spreaders;
xi) subsoilers; xxix) fertilizer distributor;
xii) seed drills; xxx) transplanters;
xiii) threshers; xxxi) juice presses and
xiv) bale wrappers; crushers;
xv) milking machinery; xxxii) seed and grain shellers;
xvi) milk coolers; xxxiii) silage chopper
xvii) maize mills; machines;
xviii) wheat flour mills; xxxiv) color sorters for coffee;
xix) homogenisers; xxxv) coffee roasters.
(sa) the supply of crop extension services;
(sb) the supply of irrigation works, sprinklers and ready to use drip lines;
Sa – se Inserted by
VAT (Am) Act 2017
(sc) the supply of deep cycle batteries, composite lanterns, and raw
materials for the manufacture of deep cycle batteries and composite
lanterns;
(sd) the supply of menstrual cups;
(se) the supply of Agricultural Insurance Premium or Policy;
(t) the supply of photosensitive semiconductor devices, including

Inserted by Finance Act 2001 photovoltaic devices, whether or not assembled in modules or
and substituted by
VAT (Am) Act 2005,
made into panels; light emitting diodes; solar water heaters, solar
VAT (Am) Act 2006 refrigerators and solar cookers.
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Inserted by VAT (Am) Act 2011.

(ta) supply of power generated by solar; Repealed by (Am) Act 2016.
(u) Added by VAT (Am)
Act 2002, Substituted
by VAT (Am) Act 2003 (u) the supply of accommodation in tourist lodges and hotels outside
& 1 2008. Deleted by
VAT (Am) Act 1 2008. Kampala District; and Entebbe;
Repealed by VAT (Am)
Act 2014.
(v) supply of new –
Substituted by VAT (Am No.2)

(i) computers
Act 2002, (Am) Act 2005, (Am)
Act 2 2008 & (Am) Act 2009. (ii) desktop printers; and
Repealed by Am Act 2014.
(iii) computer parts and accessories. (w) inserted by (Am) Act 2003.Ssubstituted
by (Am) Act 2010. Repealed by Am Act 2014
(w) the supply of computer software and software licences;

Inserted by
VAT (Am) Act 2003 (x) the supply of lifejackets, lifesaving gear, headgear and speed
and substituted by
VAT (Am) Act 2005 governors;
Inserted by VAT (Am)
Act 2003 & deleted by (y) the supply of Mobile toilets and Ekoloo toilets made form
VAT (Am) Act 2005
polyethylene;
(z) the supply of mosquito nets, insecticides and acaricides;

Inserted by VAT (Am) Act 2003,
(Am) Act 2006 & (Am) Act 1 2008.
Repealed by VAT (Am) Act 2013
(aa) the supply of specialised vehicles, plant and machinery, feasibility

Inserted by VAT (Am) Act 2005, studies, engineering designs, consultancy services and civil works
(Am) Act 2006, (Am) Act 1 2008,
(Am) Act 2 2008 & (Am) Act related to hydro-electric power, roads and bridges construction,
2009. Repealed by Am Act 2014
public water works, agriculture, education and health sectors.
(bb) the supply of contraceptive sheaths and examination gloves;

Inserted by VAT (Am) Act 2006.
Repealed by VAT (Am) Act 2013
Inserted by VAT (Am) Act

(cc) the supply of Liquefied Petroleum Gas. 2006.Repealed by Am Act 2014
Inserted by VAT
(Am) Act 1 2008 & (dd) the supply of any goods and services to the contractor of the
Repealed by VAT
(Am) Act 2013 Bujagaali hydro-electric power project;
Inserted by VAT
(Am) Act 2 2008 &
(dda) the supply of any goods and services to the contractors and
substituted By subcontractors of hydro-electric power, solar power, geothermal power
(Am) Act 2016
or bio gas and wind energy projects;
Inserted by VAT (Am) Act 1 2008 &
(ee) the supply of diapers. Repealed by VAT (Am) Act 2013
Inserted by VAT (Am) Act 2 2008

(ff) the supply of salt; & repealed by Am Act 2014
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Inserted by Am Act
2 2008 and repealed (gg) the supply of motor vehicles or trailers of a carrying capacity of 3.5
by VAT (Am) Act
2011
tonnes or more designed for the transport of goods;
(hh) the supply of packing materials exclusively used by the milling

industry for packing milled products; (hh) & (ii) inserted by VAT (Am) Act 2009
Repealed by Am Act 2014
(ii) the supply of packing materials exclusively used by the dairy

industry for packing milk;
(jj) the supply of biodegradable packaging materials.

Jj Inserted by VAT (Am) Act 2010
And repealed by VAT (Am) Act 2012
(kk) the supply of water for domestic use excluding mineral water and
aerated waters which contain sweetening matter or flavour.
Kk Inserted by VAT (Am) Act 2012 W.E F
1/10/2012 and Repealed by VAT (Am) Act 2013
2. In this Schedule –
(a) “education services” means education provided by –
(i) a pre-primary, primary, or secondary school;
(ii) a technical college or university;
(iii) an institution established for the promotion of adult

education, vocational training, technical education, or the
education or training of physically or mentally handicapped
persons;
(b) “financial services” means –
(i) granting, negotiating, and dealing with loans, credit, credit

guarantees, and any security for money, including
management of loans, credit, or credit guarantees by the
grantor;
(ii) transactions concerning deposit and current accounts,

Inserted by
VAT (Am) Act 2006 payments, transfers, debts, foreign currency sales and
purchases, cheques, and negotiable instruments, other than
debt collection and factoring;
(iii) transactions relating to shares, stocks, bonds, and other

securities, other than custody services;
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(iv) management of investment funds; but does not include

provision of credit facilities under a hire-purchase or finance
lease agreement;
(c) “passenger transportation services” means the transportation of

fare-paying passengers, and their personal effects by road, rail,
water, or air, but does not include passenger transport services
provided by a registered tour operator; and
(d) “social welfare services” means –
(i) care for the elderly, sick, and disabled, including care in a
hospital, aged person's home, and similar establishments; or
(ii) care and welfare services provided for the benefit of minors.
(e) “transfer of a going concern” includes the disposal of any part of a

business which is capable of separate operation;
Inserted by
VAT (Am) Act 2009 (f) insurance services include brokerage.
3. For the purposes of paragraph 1(a) of this Schedule, the term

Substituted by “unprocessed” includes low value added activity such as sorting, drying,
VAT (Am) Act 1
2008 salting, filleting, deboning, freezing, chilling, or bulk packaging, where,
except in the case of packaging, the value added does not exceed 5% of the
total value of the supply.
4. Paragraph 1(aa) shall continue to apply to contracts that were entered

Inserted by
VAT (Am) Act 2014
into prior to its repeal until the contracts are completed or are
terminated.
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THIRD SCHEDULE
S.24(4)
Zero-Rated Supplies
1. The following supplies are specified for the purposes of Section 24(4) –
(a) a supply of goods or services where the goods or services are

exported from Uganda as part of the supply;
Substituted by VAT (b) the supply of international transport of goods or passengers and
(Am No.2) Act 2002
tickets for their transport;
(c) the supply of drugs and medicines;

Substituted by
VAT (Am No.2) (d) the supply of educational materials [and the supply of printing
Act 2002 & VAT
(Am) Act 2014
services for educational materials];
(e) the supply of seeds, fertilisers, pesticides, and hoes;

Substituted by VAT
(Am) Act 2013.
Repealed by Am
(f) the supply of cereals where the cereals are grown and milled [or
Act 2014 produced] in Uganda;
Inserted by Finance
Act 2001. Repealed (g) the supply of machinery, tools and implements suitable for use
by Am Act 2014
only in agriculture;
Added by VAT (Am)
Act 2002. Repealed
by Am Act 2014 (h) the supply of milk, including milk treated in any way to preserve it;
Inserted by
VAT (Am) Act 2011
And repealed by
(ha) the supply of water, excluding mineral water and aerated waters
VAT (Am) Act 2012 containing sweetening matter or flavoured;
Inserted by
VAT (Am) Act 2005
And repealed by
(i) the supply and installation of Mobilet Toilets, Ekoloo Toilets, and
VAT (Am) Act 2012 components made from polythene with effect from 1st July 2004;
Inserted by
VAT (Am) Act 2005
and substituted by
(j) the supply of sanitary towels and tampons and inputs for their
VAT (Am) Act 2009 manufacture; and
Inserted by
VAT (Am) Act 2
(k) the supply of leased aircraft, aircraft engines, spare engines, spare
2008 parts for aircraft and aircraft maintenance equipment.
(l) the supply of cereals, where the cereals are grown and milled in
(l) & (m) inserted by
VAT (Am) Act 2 Uganda;
2015 W.E.F 1/1/2015
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(m) the supply of handling services provided by the National Medical

Stores in respect of medical supplies, funded by donors.
2. For the purposes of paragraph 1(a), goods or services are treated as

exported from Uganda if –
(a) in case of goods, the goods are delivered to, or made available at
an address outside Uganda as evidenced by documentary proof
acceptable to the Commissioner General; or
(b) in the case of services, the services were supplied by a person

engaged exclusively in handling of goods for export at a port of
Inserted by
VAT (Am) Act 2006 exit or were supplied for use or consumption outside Uganda as
evidenced by documentary proof acceptable to the Commissioner
General.
3. For the purposes of paragraph (1)(b), international transport of goods or

passengers occurs where goods or passengers are transported by road,
rail, water, or air –
(a) from a place outside Uganda to another place outside Uganda

where the transport or part of the transport is across the
territory of Uganda;
(b) from a place outside Uganda to a place in Uganda; or
(c) from a place in Uganda to a place outside Uganda.
4. In this Schedule –
(a) ”educational materials” means materials, whether printed or

Inserted by audio, suitable for use only in public libraries and educational
VAT (Am) Act 2013
establishments specified in paragraph 2 of the Second Schedule
to this Act;
(b) “pesticides” means insecticides, rodenticides, fungicides and

herbicides but does not include pesticides packaged for
personal or domestic use.
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FOURTH SCHEDULE
Ss. 24 - 30
Formulae, Tax Invoices, Credit Notes and Debit Notes
1. (a) For the purposes of Section 24(2), the following formula shall
apply –
AxB
where,
A is the taxable value as determined under Section 21(2)

or (3); and
B is the tax fraction.
(b) For the purposes of Section 25, the following formula shall apply –
X–Y
where,
X is the total of the tax payable in respect of taxable supplies

made by the taxable person during the tax period; and
Y is the total credit allowed to the taxable person in the tax

period under the Act.
(c) For the purposes of Section 26(5), the following formula shall
apply:–
S–T
where,
S is the total output tax received by the taxable person during

the tax period in respect of taxable supplies made by the
person and
T is the total input tax credit allowed to the taxable person in

the tax period under the Act.
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(d) For the purposes of Section 27(2), the following formula shall
apply:–
M–N
where,
M is the total amount of input tax credited in relation to amounts

due by the taxable person at the time of change in the
accounting basis; and
N is the total amount of output tax accounted for in relation to

amounts due to the taxable person at the time of change in the
accounting basis.
(e) For the purposes of Section 27(3), the following formula shall
apply:–
O–P
where,
O is the total amount of output tax that would have been

accounted for on amounts due to the taxable person at the time
of change in accounting basis if the taxable person had been
accounting for tax on an invoice basis; and
P is the total amount of input tax that would have been credited
on amounts due by a taxable person at the time of change in
accounting basis if the taxable person had been accounting for
tax on an invoice basis.
(f) For the purposes of Section 28(7)(b), the following formula shall
apply –
A x B/C
where,
A is the total amount of input tax for the period; and
B is the total amount of taxable supplies made by the taxable

person during the period; and
_________________________________________________________________
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C is the total amount of all supplies made by the taxable person

during the period other than an exempt supply under paragraph
1(k) of the Second Schedule.
2. A tax invoice as required by Section 29 shall, unless the Commissioner

General provides otherwise, contain the following particulars –
(a) the words “tax invoice” written in a prominent place;
(b) the commercial name, address, place of business, and the taxpayer
identification and VAT registration numbers of the taxable person
making the supply;
(c) the commercial name, address, place of business, and the taxpayer
identification number and VAT registration number of the
recipient of the taxable supply;
(d) the individualised serial number and the date on which the tax
invoice is issued;
(e) a description of the goods or services supplied and the date on

which the supply is made;
(f) the quantity or volume of the goods or services supplied;
(g) the rate of tax for each category of goods and services described in
the invoice; and
(h) either –
(i) the total amount of the tax charged, the consideration for the
supply exclusive of tax and the consideration inclusive of
tax; or
(ii) where the amount of tax charged is calculated under Section

24(2), the consideration for the supply, a statement that it
includes a charge in respect of the tax and the rate at which
the tax was charged.
3. A credit note as required by Section 30(1) shall, unless the

Commissioner General provides otherwise, contain the following
particulars –
_________________________________________________________________
- 275 -
(a) the words “credit note” in a prominent place;
making the supply;
identification and VAT registration numbers of the recipient of
the taxable supply;
(d) the date on which the credit note was issued;
(e) the rate of tax; and
(f) either –
(i) the taxable value of the supply shown on the tax invoice, the
correct amount of the taxable value of the supply, the
difference between those two amounts, and the tax charged
that relates to that difference; or
(ii) where the tax charged is calculated under Section 24(2), the
amount of the difference between the taxable value shown
on the tax invoice and the correct amount of the taxable
value and a statement that the difference includes a charge in
respect of the tax;
(g) a brief explanation of the circumstances giving rise to the issuing

of the credit note; and
(h) information sufficient to identify the taxable supply to which the

credit note relates.
4. A debit note as required by Section 30(2) shall, unless the Commissioner

General provides otherwise, contain the following particulars –
(a) the words “debit note” in a prominent place;
making the supply;
_________________________________________________________________
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identification and VAT registration numbers of the recipient of the

taxable supply;
(d) the date on which the debit note was issued;
(e) the rate of tax; and
(f) either –
(i) the taxable value of the supply shown on the tax invoice, the
correct amount of the taxable value of the supply, the
difference between those two amounts, and the tax charged
that relates to that difference; or
(ii) where the tax charged is calculated under Section 24(2), the
amount of the difference between the taxable value shown on
the tax invoice and the correct amount of the taxable value
and a statement that the difference includes a charge in
respect of the tax;
(g) a brief explanation of the circumstances giving rise to the issuing

of the debit note;
(h) information sufficient to identify the taxable supply to which the

debit note relates.
FIFTH SCHEDULE
Secs.43 & 65
Calculation of Interest Penalty
The rate of interest chargeable as penalty shall be 2% per month,

compounded.
Cross References
East African Customs and Transfer Tax Management Act, Laws of the
Community, 1970 Revision, Cap. 27.
East African Community Customs Management Act, 2004 (Act No.1 of
2005).
Finance Act, 2000, Act 1/2001.
Magistrates Courts Act, Cap. 16.
Tax Appeals Tribunal Act, Cap. 345.
Customs Tariff Act, Cap. 337.
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Statutory Instruments VAT
(Statutory Instruments and Regulations)
VALUE ADDED TAX REGULATIONS, 1996

(Under Section 78 of the ACT)
1. Citation and Commencement
These Regulations may be cited as the Value Added Tax Regulations.
2. Contracts entered into before and after 1st July 1996
(1) Where a contract was concluded between two or more parties before
the 1st July 1996, and no provision relating to tax was made in the
contract, the supplier shall recover tax due on any taxable supplies
made under the contract after 1st July 1996.
(2) Where a contract concluded after 1st July 1996 does not include a
provision relating to tax, the contract price shall be deemed to include
the tax and the supplier under the contract shall account for the tax due.
3. Tax paid on Capital Goods and Stock on Hand
Where after the 1st July 1996, a person being registered has in stock plant and
machinery and other goods on which tax was paid prior to being registered,
that person shall be entitled to claim a credit of the tax on the goods which
were purchased within four months before the date of registration, and in the
case of plant and machinery, within six months before the date of
registration.
4. Display of Registration Certificate
A registered taxpayer shall display the registration certificate issued under the
Act at his or her principal place of business.
Substituted by VAT (Am) Regulations 2003
5. New Investors Revoked by VAT (Am) Regulations 2011
(1) A person who is approved by the Uganda Investment Authority as an

investor and who plans to make taxable supplies in due course, may
apply to the Commissioner General to be registered as an investment
trader [for a period not exceeding four years] for a period of four years,
renewable for another period of four years. [Effective 1st July 2002]
_________________________________________________________________
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(2) A person shall not be registered as an Investment Trader unless that

person gives the Commissioner General an undertaking and security
that the Commissioner General may require, guaranteeing the
repayment of any tax refunded to that person, if that person does not
make any taxable supply within the period during which that person
was registered as an Investment trader.
(3) An Investment Trader may claim input tax deduction in respect of

expenditure on inputs, whether imported or locally procured, relating to
the planned taxable business activities and that trader shall be entitled
to a refund of the input tax on those purchases.
(4) An Investment Trader shall abide by all the duties and obligations of a
registered person, including the keeping of proper books of accounts
and the filing of regular returns.
(5) A person shall cease to be an Investment Trader immediately after

making a taxable supply in the course of business.
6. Tax on Construction Services
(1) Where a taxable supply is building and construction services, tax shall
be collected at each stage of the work when an invoice is issued or when
payment is received or becomes due, whichever is the earliest, in respect
of each stage completed.
(2) Where an invoice or a claim for payment by a contractor requires

certification by an architect, building consultant or other person, the
invoice or claim shall not be effective for tax purposes until it is certified
as required, and the time of supply shall be the time of certification, and
for purposes of the tax any claim or invoice under this regulation shall
be certified within 30 days of the date of the invoice or claim.
(3) Where a contractor varies the cost of a contract during the course of
execution, the variations to the original contract shall be deemed to
include tax, and the tax shall become due and payable at the time
payment is made for each stage completed.
7. Relief for Diplomats, etc.
(1) The relief provided for under Section 45 of the Act relating to
diplomatic missions and accredited personnel shall be administered as
follows –
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- 279 -
(a) in the case of imported goods and services, the diplomatic mission
or accredited personnel shall be exempted from tax;
(b) in the case of services provided by persons providing utility services, the
Substituted by VAT diplomatic mission or accredited personnel shall be exempted from
(Am) Regulations 2011
tax;
(c) in the case of other procurements, the tax shall be payable and the
diplomatic missions or accredited personnel entitled to relief may
claim a refund of the tax paid on the following conditions –
(i) the diplomatic mission or accredited personnel shall produce

evidence of procurement and of payment of the tax;
(ii) individual transactions of less than 50,000/=, excluding tax,

shall not be eligible for a refund;
(iii) the total value of transactions for any claim period shall not be
less than 200,000/=, excluding tax;
(iv) diplomatic missions or accredited personnel may be required to

provide evidence of entitlement to relief by producing the
official card issued by the Ministry responsible for Foreign
Affairs.
(2) The relief provided under Section 76 relating to Public International

Organisations in the First Schedule of the Act shall be administered as
follows:
(a) the organisation may be required to provide evidence of entitlement

to relief in terms of a valid agreement with the Government of
Uganda;
(b) the organisation shall be exempted from tax in the case of imported
goods and services;
(c) in the case of locally procured goods and services, tax shall be
payable and the organisation entitled to relief may claim a refund
of the tax on the following conditions –
(i) the organisation shall produce evidence of procurement and of

payment of the tax;
_________________________________________________________________
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(ii) individual transactions of less than 50,000/=, excluding tax,

shall not be eligible for a refund;
(iii) the total value of transactions for any claim period shall not be
less than 200,000/=, excluding tax;
(3) The Commissioner General may prescribe the forms to be used for
refund claims and may specify the frequency of submitting and
processing claims in any individual case, which frequency shall not be
less than a month.
8. Records to be kept by a Registered Person
(1) A registered person shall keep records and accounts of all supplies
received or made by that person in the course of business, including
zero-rated and exempt supplies.
(2) For the purpose of accounting for input tax and output tax, the
following records shall be kept by a registered person –
(a) tax accounts and records, which shall include total output tax and
input tax in each period and net tax payable or the excess credit of
tax refundable at the end of the tax period;
(b) purchase records, showing details of all local purchases on which

tax has been paid, on all imports on which tax has been paid, and
of all purchases made without payment of tax, including original
tax invoices for all local purchases from registered suppliers,
invoices for local purchases from unregistered suppliers and
certified customs entries of all imports;
(c) sales records showing exempt and taxable sales and, where tax is
chargeable, the rates of tax applicable for each sale, including
copies of tax invoices and receipts issued in respect of sales;
(d) exports records showing details of goods and services exported

from Uganda, including, in the case of goods, certified copies of
customs export documents and evidence of exportation;
(e) debit and credit notes issued and received;
(f)
cash records including cash books, petty cash vouchers and other
accounts records showing daily takings such as till rolls or copy
receipts;
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(g) computer records;
(h) in the case of a person making exempt and taxable supplies, details
of input tax calculations;
(i) transitional relief claims and all related documents and records;
(j) stock records showing movements of goods into or out of stock

including, in the case of a manufacturer, manufacturing stock
records.
(3) In addition to the records kept under paragraph (2), a registered person
with a taxable turnover exceeding 100 million shillings per annum shall
keep the following records –
(a) orders and delivery notes;
(b) relevant business correspondence;
(c) appointment and job books;
(d) annual accounts including trading, profit and loss accounts and
balance sheet; and
(e) bank statements and pay-in-slips.
(4) All records shall be kept by the taxpayer for a period of six years and
shall be available to the Commissioner General for audit or inspection if
required.
9. Simplified Tax Invoices
(1) Notwithstanding the basic requirements in respect of tax invoices, as

specified in the Fourth Schedule to the Act, registered persons with a
taxable turnover below 100 million shillings per annum may issue a
simplified tax invoice for taxable supplies made to another registered
person, provided the value of any individual item on the invoice does
not exceed 50,000/= and the total invoice does not exceed one hundred
thousand shillings.
(2) A simplified tax invoice shall contain the following particulars –
(a) the commercial name, address, taxpayer identification number and
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registration number of the person making the supply;
(b) the date the invoice is issued;
(c) the description of the goods;
(d) the quantity of the goods; and
(e) the value of the supply inclusive of tax and a statement that tax is
included in the price.
(3) Zero-rated supplies and exempt supplies shall not be included on a

simplified tax invoice.
10. Treatment of Cash-Basis Accounting Taxpayer
(1) This Section shall apply to registered persons whose annual taxable
Substituted by supplies do not exceed two hundred million shillings.
Finance Act 1999
(2) Where a registered person sells only goods liable at the positive rate of
tax, sales may be calculated on the basis of the daily gross takings
recorded from the cash register or cash box and a sales day book record
and any cash removed from the cash register or box must be recorded
and included in the daily gross takings total; then the output tax is
calculated by applying the tax fraction to the total of the daily gross
takings for the tax period.
(3) Where a registered person makes zero-rated or exempt supplies, in

addition to supplies at the positive rate, sales may be recorded on the
basis of daily gross takings at each tax rate, and the different tax
categories shall be separately identified at the point of sale either by
means of a cash register or by keeping separate cash boxes for each
category, together with a sales day book record, or in some other
manner acceptable to the Commissioner General; then the output tax is
calculated by applying the tax fraction to the total gross takings at the
positive rate for the tax period.
11. Export of Goods
(1) Where goods are supplied by a registered taxpayer to a person in

another country and the goods are delivered by a registered taxpayer to
a port of exit for export, the goods may be invoiced at the zero rate,
provided the registered taxpayer obtains documentary proof set out in
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this Section and the goods are removed from Uganda within 30 days of
delivery to a port of exit.
(1a) For the purposes of sub regulation (1), the Commissioner General may
Inserted by require goods for export specified in a notice in the Uganda Gazette to
VAT (Am)
Regulations 2011 be distinctively labelled by the registered taxpayer.
(1b) The Commissioner General shall issue guidelines to specify the colour,
nature, size and type of labels referred to in sub-regulation (1a).
(2) For an export transaction to qualify for zero-rating, a registered

taxpayer shall obtain and be able to show as proof of export for every
export transaction the following –
(a) a copy of the bill of entry or export certified by the Customs

authorities;
(b) a copy of the invoice issued to the foreign purchaser with tax
shown at the zero rate;
(c) evidence sufficient to satisfy the Commissioner General that the

goods have been exported, in the form of an order from, or signed
contract with, a foreign purchaser, or transport documentation
which identify the goods such as –
(i) transit order or consignment note issued by the Uganda

Railways Corporation for goods exported by rail;
(ii) copy of a bill of lading for goods exported by water;
(iii) copy of an airway bill for goods exported by air; or
(iv) copy of a transport document for goods exported by road.
12. Export of Service
Where services are supplied by a registered taxpayer to a person outside

Uganda, the services shall qualify for zero rating only if the taxpayer can
show evidence that the services are used or consumed outside Uganda, which
evidence can be in the form of a contract with a foreign purchaser and shall
clearly specify the place of use or consumption of the service to be outside
Uganda or that the service is provided for a building or premises outside
Uganda.
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Substituted by
13. Imported Services VAT (Am) Regulations 2011
(1) A registered taxpayer who receives a supply of services from a foreign

supplier shall account for the tax due on the supply, and the taxpayer
shall account for that tax when performance of the service is completed,
or when payment for the service is made, or when the invoice is
received from the foreign supplier, whichever is the earliest.
(2) The value for calculating the amount of tax payable under paragraph (1)
shall be the total consideration paid to the foreign supplier and the
registered person receiving the services shall apply the tax rate to the
total consideration to calculate the tax due and he shall enter both the
value and the tax calculated in his Tax Return.
(3) Tax accounted for on imported services may be claimed as a credit

under the provision of Section 28 of the Act, provided the recipient of
the service prepares a self-billed tax invoice to account for tax due on
the supply; the claim for credit is subject to the conditions specified in
Section 28 of the Act.
(1) A person who receives imported services other than an exempt service
shall account for the tax due on the supply, and the taxpayer shall
account for that service when performance of the service is completed,
or when payment for the service is made, or when the invoice is
received from the foreign supplier, whichever is the earliest.
(2) The value for calculating the amount of tax payable under paragraph (1)
shall be the taxable value of the supply determined under section 21 of
the VAT Act and the taxable person receiving the services shall apply
the tax rate to the taxable value to calculate the tax due and he shall
enter both the value and the tax calculated in his Tax Return.
(3) If a taxable person carries on a business both in and outside Uganda,

and there is an internal provision of services from the part outside
Uganda to the part in Uganda, then, in relation to those services, the
following applies for the purposes of the Value Added Tax Act and
these Regulations –
(a) that part of the business carried on outside Uganda is treated as if it

were carried on by a person (referred to as the “overseas person”)
separate from the taxable person;
(b) the overseas person is not a taxable person; and
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(c) the internal provision of services is treated as a supply of services

made outside Uganda by the overseas person to the taxable person
for reduced consideration.
14. Credit for Input Tax for Persons making Taxable and Exempt
Supplies
(1) Where a registered taxpayer who is making taxable and exempt

supplies is disadvantaged by the provisions of Section 28(7)(b) of the
Act, the Commissioner General may approve an alternative method
for calculating the input tax to be credited, as described in paragraphs
(2) and (3), which shall be known as the Standard Alternative Method.
(2) The registered taxpayer may directly attribute input tax separately to the
exempt and taxable supplies in so far as this is possible and may claim
credit for all the input tax related to taxable supplies and for none of the
input tax related to exempt supplies.
(3) The balance of input tax which cannot be attributed to taxable or

exempt supplies shall be apportioned under the provisions of Section
28(7)(b) of the Act; however, the provisions of Section 28(13) and (14)
of the Act shall be complied with in respect of the non-attributable input
tax.
(4) Where a registered taxpayer wishes to use the Standard Alternative

Method, or any other method which is not provided for in Section
28(7)(b) of the Act, that taxpayer must seek the written approval of the
Commissioner General.
History: S.I 38/1996; S.I 29/1999; S.I 80/2003; S.I 26/2002; S.I 29/2011
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THE VALUE ADDED TAX (RATE OF TAX)

ORDER 2006
SI No.51 of 2005 and No.29 of 2006

(Under Section 78 of the Value Added Tax Act, Cap.349)
IN EXERCISE of the powers conferred upon the Minister by Section 78 of

the Value Added Tax Act, this Order is made this 15th day of June 2006.
1. Title
This Order may be cited as the Value Added Tax (rate of Tax) Order
2006.
2. Commencement
This Order shall come into force on the 1st day of July 2005.
3. Rate of Tax
The rate of tax for –
(a) every taxable supply made in Uganda by a taxable person;
(b) every import of goods other than an exempt import; and
(c) the supply of any imported services by any person,
is 18% of the taxable value as defined in Sections 21 and 23 of the VAT

Act.
4. The rate of tax prescribed in paragraph 3 does not apply to taxable

supplies specified in the Third Schedule of the Act.[i.e. Zero-rated goods
and services]
_____________________
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Revoked by the VAT (Rate of

Tax) (Revocation) Order 2009
The Value Added Tax (Rate of Tax) Order 2007
(Under Section 78 of the Value Added Tax Act, Cap.349)
IN EXERCISE of the powers conferred upon the Minister by Section 78 of

the Value Added Tax Act, this Order is made this 15th day of June 2007.
1. Title
This Order may be cited as the Value Added Tax (Rate of Tax) Order
2007.
2. Commencement
This Order shall come into force on the 1st day of July 2007.
3. Application Of Order
This Order applies to a taxable supply which is part of a commercial

venture of a taxable person who builds for rent or sale.
4. Rate of Tax
The rate of tax for every taxable supply of a residential dwelling unit
made by a taxable person is 5% of the taxable value as defined in
Sections 21 and 23 of the Act.
______________________

THE VALUE ADDED TAX (RATE OF TAX)
(REVOCATION) ORDER, 2009
(Under section 78 of the VAT Act)
IN EXERCISE of the powers conferred upon the Minister by section 78 of

the VAT Act, this Order is made this 11th day of June 2009.
1. Title
This Order may be cited as the Value Added Tax (Rate of Tax)(Revocation)
Order 2009
2. Revocation
The Value Added Tax (Rate of Tax Order) 2007, S.I No.21 of 2007 is
revoked.
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THE VALUE ADDED TAX (DEFERMENT OF TAX ON

PLANT AND MACHINERY) REGULATIONS, 2013.
(Under section 34 (8) of the Value Added Tax Act Cap. 349) - SI 2013 No. 28
IN EXERCISE of the powers conferred upon the Minister by section 34(8) of

the Value Added Tax Act, these Regulations are made this 28th day of June,
2013.
1. Title.
These Regulations may be cited as the Value Added Tax (Deferment of Tax
on Plant and Machinery) Regulations 2013.
2. Commencement.
These Regulations shall come into force on 1st July 2013.
3. Interpretation.
In these Regulations unless the context otherwise requires –
“Act” means the Value Added Tax Act; and
“deferment” means postponement of payment of the value added tax under

the Act in respect of imported plant and machinery.
4. Application for deferment.
(1) An importer of plant and machinery may apply to the Commissioner

General to defer the payment of tax due in respect of imported plant
and machinery.
(2) An application for deferment shall be in the form prescribed by the

Commissioner General and shall be accompanied with a declaration by
the applicant that the goods are for use in the business of the applicants
and shall not be disposed of during the deferment period without prior
approval by the Commissioner General.
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(3) Subject to regulation 5, the Commissioner General may if satisfied that

the imported plant and machinery is for use in the manufacture of
goods or provision of value added services defer the payment of the tax
to a specified period.
(4) Where an application is in respect of phased importation of plant and

machinery, the application shall be accompanied with a schedule
indicating the phases and the list of the plant and machinery included in
each phase.
5. Period of deferment.
(1) The period of deferment shall, in the case of –
(a) a person making taxable supplies, be fifteen days after the tax
period;
(b) a person not yet making taxable supplies, be one year from the
commencement of the deferment; and
(c) of phased importations, be fifteen days after the tax period.
(2) A person under subsection 1(b) may apply for extension of time to the
Commissioner General not exceeding one year.
6. Conditions for approval.
(1) The Commissioner General shall not approve an application for

deferment unless –
(a) the applicant is registered under Part III of the Act;
(b) the plant and machinery in respect of which the application is made
is imported for use in the business of the applicant;
(c) the tax due and in respect of which a deferment is sought is at least
USD 4,000; and
(d) the applicant has complied with section 31 of the Act.
(2) The Commissioner General may require the applicant to furnish

security for the tax proposed to be deferred before approving the
deferment.
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7. Sale of plant and machinery during or after the deferment period.
Where the plant and machinery that is the subject of deferment is sold,
re-exported or disposed of before or after expiry of the deferment period
or utilized for any other purpose other than the purpose declared in the
application, the importer shall pay in addition to any tax for which he
or she is liable on such sale, re-export or disposal, the outstanding
deferred amount and interest in accordance with the VAT Act.
8. Inspection.
(1) The Commissioner General may at any time during the period of
deferment, inspect the plant and machinery specified in the application
for deferment to ascertain whether it is duly installed and utilised for the
purpose specified in the application.
(2) Where the Commissioner General ascertains that the plant and
machinery is installed or utilised for the purpose specified in the
application for deferment, the Commissioner General shall allow the
taxable person to cause adjustments to the respective returns to reflect
that the deferred tax has been accounted for.
9. Termination of deferment.
Deferment shall terminate –
(a) when the period of deferment specified in accordance with regulation 5

ends; or
(b) where the Commissioner General ascertains under regulation 8 that the
imported machinery is not installed or utilised for the purpose specified
in the application.
10. Payment of tax due.
Where the period of deferment terminates in accordance with these

Regulations, the tax due shall become payable in accordance with the Act.
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Practice Notes VAT
PRACTICE NOTES
(Under Section 79 of the VATA)
These Practice Notes, which are binding on all URA officers unless altered or
revoked, were issued to achieve consistency in the administration of the
Value Added Tax Act and to provide guidance to taxpayers and officers of
the Uganda Revenue Authority.
ISSUE DATE : 18th June 2007

EFFECTIVE DATE:
ISSUED BY : Allen Kagina (Mrs) - Commissioner General
1. Definition of the Terms “Medical, Dental and Veterinary

Equipment” for VAT Purposes.
Paragraph 1(q) of the Second Schedule to the VAT Act provides that the
supply of dental, medical and veterinary equipment is an exempt supply.
Definition of Equipment
(a) The Act does not define the term equipment. This PN is therefore
intended to provide the meaning of what should be treated as medical,
dental and veterinary equipment.
(b) Medical, Dental and Veterinary equipment is any equipment or device

which has features or characteristics that identify it as having been
designed to be used alone or in combination for a medical, dental or
veterinary purpose or function such as the diagnosis, prevention,
monitoring, treatment, alleviation of or compensation for an injury and
alleviation of disease in human beings and animals.
(c) The equipment/device will usually be durable although certain

disposable items such as syringes may still be equipment.
(d) Based on the above definition, medical, dental and veterinary equipment
covers a wide range of goods from simple items like bandages and
syringes, to complex machinery such as X-ray machines as well as parts
and accessories for use with the equipment.
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Practice Notes VAT
(e) Parts and accessories will be treated as medical equipment/device if they

are intended specifically by manufacturers to be used together with the
parent medical device.
(f) Parts are integral components without which the equipment is not
complete; while accessories are optional extras which can be used to
improve the operation of the equipment or enable it to be used to better
effect. Accessories do not include items which have an independent
function.
(g) For purposes of clarity, medical, dental and veterinary equipment shall
include articles under heading 9018 – 9022 of the Harmonized Systems
Code (HS Code), contact lenses, spectacle lenses (excluding frames) and
those that will be treated as such based on the classification given by the
National Drug Authority.
Exclusions
(a) Excluded from the definition are chemical reagents and medicines,
mosquito nets, cleaning and sterilizing fluids, disinfectants, cotton wool
(other than sterilized), hospital linen, blankets, drug trolleys, gloves
(other than surgical), gymnasium equipment (other than specialized
physiotherapy equipment), clothing (other than specialized ones such as
surgical masks and gowns), lockers, bathroom scales.
(b) This definition shall also exclude general use items used to equip or
facilitate a medical facility or items that can be put to diverse uses which
are not necessarily medical uses e.g. television sets, telephone sets or a
fan used in a medical ward will not be considered medical equipment.
2. Definition of Medicines and Drugs for VAT purposes
(a) Paragraph 1(c) of the Third Schedule VAT Act provides that the supply
of drugs and medicines is a zero-rated supply. However, drugs and
medicines are not defined.
(b) Medicines and drugs shall be interpreted to be any substance or article

(not being an equipment/device, instrument, apparatus or appliance)
which is for use wholly or mainly in either or both of the following
ways:–
(i) by being administered to human beings or animals internally or

externally for medical purposes; or
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Practice Notes VAT
(ii) as an ingredient in the preparation of a substance or article to be so

administered.
(c) Therefore, medicines and drugs are any substance, preparation or

mixture of substances used or intended for use in diagnosing, or treating
of disease, disorder or abnormal physical state or the symptoms thereof
in human beings or animals.
(d) The World Customs Organisation (WCO) uses the term “medicament”
in reference to medicines and drugs.
(e) A medicament is an agent that promotes recovery from injury or ailment.

Medicaments are impregnated or coated with pharmaceutical substances
for therapeutic or prophylactic use in medical, surgical, dental or
veterinary purposes.
(f) For purposes of VAT and clarity, medicines and drugs shall include
surgical dressings, biological products such as vaccines and blood
products, as well as items under headings 3004 and 3005 of the HS Code.
Exclusions
(a) The definition of medicines and drugs shall not include preparations
commonly used for toilet purposes, or in connection with the care of the
human body, whether for cleansing, deodorizing, beautifying, preserving
or restoring whether or not possessing therapeutic or prophylactic
properties e.g. medicated soaps, shampoos, toothbrushes, dental pastes
and creams, facial and body creams, hair removing creams,
aromatherapy oils, mouth washes, lip balms, deodorants, antiperspirants,
disinfectants. [The definition shall also not include lozenges and all items
under headings 3301 to 3307 of the HS Code]
(b) Nutrition/Food supplements are not drugs or medicines for VAT

purposes because they are intended to supplement one’s dietary
requirements and do not contain active pharmaceutical substances and as
such shall be treated as taxable supplies for VAT purposes.
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Practice Notes VAT
ISSUE DATE : 14th November 2007

EFFECTIVE DATE:
Revoked WEF Sept.2014

VAT on Imported Rice
1. Paragraph 1(a) of the Second Schedule of the VAT Act provides that the
supply of unprocessed agricultural products and livestock is an exempt
supply.
2. Paragraph 3 of the same Schedule states that
“for purposes of paragraph 1(a)…unprocessed includes low value

added activity such as sorting, drying, salting, filleting, deboning,
freezing, chilling, or bulk packaging, where, except in the case of
packaging, the value added does not exceed 5% of the total value of
the supply.
3. All imported rice shall be considered to be unprocessed agricultural

produce for purposes of the VAT Act and therefore falls under the
provisions of the Second Schedule which provides for exempt goods.
ISSUE DATE : 23rd April 2008

EFFECTIVE DATE:
1. VAT treatment of Computer Printers
Paragraph 1(v) of the second schedule of the VAT Act provides that, “the
supply of computers, printers, parts and accessories falling under heading
84.71 and 84.73 of the harmonized coding system of the customs law is
exempt;”
Following the recent changes in the Customs coding system i.e. from the
Harmonized Commodity Description and Coding System 2002 (HS 2002)
version to HS 2007, computer printers became classifiable under two tariff
headings- 84.71 (when presented with a computer) and 84.43(when presented
separately), with specific HS codes as 8471.60.00 and 8443.32.00.
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Practice Notes VAT
As a result of the new coding, the current provisions of paragraph 1 (v) of the
second schedule, exclude computer printers classified under HS Code
8443.32.00.
This position is a mismatch arising from the change in the Customs coding
system, but not a change in policy.
Therefore, the purpose of this practice note is to clarify that, the supply of
printers as provided for in paragraph 1 (v) of the second schedule of the VAT
Act, includes desktop printers or printers presented separately specifically
under subheading 8443.32.00 of the East African Community Common
External Tariff.
2. Boundaries of Kampala District for VAT purposes
The Value Added Tax (Amendment Act) 2008 deleted “and Entebbe” from
the Second Schedule paragraph (u) under Exempt Supplies to read:
“the supply of accommodation in tourist lodges and hotels outside

Kampala District;”
This practice note is intended to clarify on what constitutes Kampala District

for VAT purposes to bring about uniformity and ease the administration of
VAT collection.
Kampala District shall constitute the five political divisions namely;
1. Kampala Central; 2) Nakawa; 3) Rubaga; 4) Makindye; and 5) Kawempe.
Any area outside the above political divisions does not fall under Kampala
District for VAT purposes.
ISSUE DATE : 2nd June 2008

VAT treatment of supply of goods as part of the transfer of a business as a

going concern
Paragraph 1(k) of the second schedule of the VAT Act provides that, “the
supply of goods as part of the transfer of a business as a going concern by one
taxable person to another taxable person is exempt.”
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Practice Notes VAT
The “transfer of going concern” is defined in paragraph 2 (e) of the second

schedule to include “the disposal of any part of a business which is capable of
separate operation.” However, this definition is not sufficient in explaining
what a sale of a business as a going concern entails.
The purpose of this practice note therefore, is to clarify what constitutes the
supply of goods as part of the transfer of a business as a going concern for
purposes of section 19 and paragraph 1 (k) of Schedule II of the VAT ACT,
Cap 349.
The supply is VAT exempt if all of the following requirements are met;
1. The supplier disposes of any part of a business which is capable of

separate operation (for example a branch of a business).
2. Both the seller and the buyer must be registered as taxable persons for
VAT.
3. The Agreement of Sale which should be duly executed must make it

absolutely clear that the property is a whole or part of the Seller's business
which is being sold as a going concern.
4. Activities of the business must continue after the business is transferred to

the purchaser for at least two (2) years.
5. The supplier supplies to the recipient all of the facilities that are necessary
for the continued operation of the enterprise being sold. This may include
premises, plant & equipment, stock in trade, intangible assets such as
goodwill, contacts and licenses, and all the operating structure and
process of the enterprise.
6. The supplier carries on or will carry on the business until the day of the
supply (whether or not as a part of a larger business carried on by the
supplier) and that the nature of the business will not change after the
transaction.
7. The transferor and transferee shall within 21 days of the transfer, notify
the Commissioner General in writing of the details of the transfer in
accordance with section 19 (2) of the VAT Act, Cap.349.
Note: A mere disposal of an asset used by the business is not a supply of a

going concern.
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Practice Notes VAT
ISSUE DATE : 4th March 2010

Exemption of VAT in accordance with section 19 and paragraph 1(aa) of

the Second Schedule to the VAT Act.
Paragraph 1(aa) of the Second Schedule to the VAT Act was amended by the
VAT(amendment) Act 2009 to provide as hereunder;
“The following supplies are specified as exempt supplies for the

purpose of section 19 –
the supply of specialized vehicles, plant and machinery, feasibility

studies, engineering designs, consultancy services and civil works
related to hydro- electric power, roads and bridges construction, public
water works, agriculture, education and health sectors”
Definitions:
The meaning below shall be attached to the terms as used in the provision:-
“specialized vehicles” means vehicles manufactured for a particular task

other than for the ordinary use of transportation of goods and passengers.
“plant and machinery” includes whatever apparatus is used by a business

man for carrying on his business – not his stock in trade which he buys or
makes for sale, but all goods and chattels, fixed or moveable, live or dead,
which he keeps for the permanent employment in his business.
“feasibility studies” means an investigation to determine whether a particular

project system, process etc. is desirable, practicable. It is an analysis designed
to establish the practicability and cost justification of a given project. It is a
preliminary study undertaken to determine and document project viability.
The term feasibility study is also used to refer to the resulting documents or
artefact.
“engineering designs” it is the result of a process used by engineers to help

develop products. The engineering design is defined as the result of the
process of servicing a system, component or process to meet desired deeds. It
is a result of a decision – making process in which the basic sciences,
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Practice Notes VAT
mathematics, and engineering sciences are applied to convert resources

optimally to meet a stated objective. It comes as a result of defining the
problem, conducting research, narrowing the research and analysing set
criteria.
“Consultancy services” means expert advice on a particular project or

activity.
“civil works” relates to services in building/construction of hydro- electric

power projects, roads and bridges construction, public water works,
agriculture, education and health. It involves all the activities involved in the
construction process starting from clearing of land to the completion of the
project. However civil works does not include the goods used in the
construction/projects.
“agriculture” the science or practice of cultivating the land and keeping or

breeding animals.
“education” a process of training and instruction especially of children and

young people in schools, colleges, universities and other education institution
which is designed to give knowledge and develop skills.
“health” Provision of medical care. It deals with the prevention, treatment

and management of illness and the preservation of mental and physical well-
being through the services offered by the medical and allied health
professions.
Implication of the amendment
The provision above exempts VAT on the supplies of goods or services of

specialized vehicles, plant and machinery, feasibility studies, engineering
designs, consultancy services and civil works related to hydro- electric power,
roads and bridges construction, public water works. The exemption has also
been extended to the agriculture, education and health sectors.
This means that suppliers of the goods and services highlighted above as
goods or services related to hydro–electric power projects, roads, bridges
construction, public water works, agriculture, education and health sectors
should not charge VAT on these supplies.
In the same spirit, the suppliers shall not claim input tax incurred in the
process of making the supplies of the listed services to the above named
sectors. The suppliers must maintain a record of evidence of the provision of
the services to the listed projects/sectors. The contractors shall also be
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Practice Notes VAT
required to provide the Commissioner, Domestic Taxes office and their

respective stations a list of suppliers and services offered reflecting quantity
and values in Uganda Shillings. This shall be in both soft and hard copy.
NB: This exemption is on the supply of the services or goods listed in the
provision related to the sectors therein mentioned and not to the contractors.
PRACTICE NOTES: URA/ VAT/PN2/14

Reference Number: PN2014090300922 Effective Date: 02/09/2014
The Commissioner General of Uganda Revenue Authority hereby issues

these Practice Notes under Section 79 of the Value Added Tax Act, Cap 349,
Laws of Uganda.
Section 5 of the VAT (Amendment) Act 2014 repealed Paragraph 1(f) of the
Third Schedule to the VAT Act which zero rated the supply of cereals, where
the cereals are grown, milled or produced in Uganda. The implication of this
amendment is that the supply of cereals grown and milled in Uganda attracts
VAT at the rate of 18%with effect from 1st July 2014.
Furthermore, Paragraph 1(a) of the Second Schedule to the VAT Act

exempts from VAT the supply of livestock, unprocessed foodstuffs, and
unprocessed agricultural products. Paragraph 3 of the same Schedule defines
“unprocessed” to include low value added activity such as sorting, drying,
salting, filleting, deboning, freezing, chilling or bulk packaging, where,
except in the case of packaging, the value added does not exceed 5% of the
total value of the supply.
From the research conducted, we have established that in relation to the

supply of rice, the value addition activities such as drying, hulling, milling,
polishing, grading, sorting and packaging among others exceeds 5%.
This implies that the supply of rice which is ready for human consumption
does not fall within the provisions of Paragraph 1(a) of the Second Schedule
to the VAT Act nor does it fall under the Third Schedule of the same Act and
therefore the supply attracts VAT at the rate of 18%. This also means that
imported rice is subject to VAT at 18%.
Our Practice Notes issued on the 14th November 2007 on imported rice are
hereby revoked.
Doris Akol
Commissioner General
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EACCMA Sch.5
EAST AFRICAN COMMUNITY CUSTOMS

MANAGEMENT ACT
5TH SCHEDULE - EXEMPTION REGIME
EACCMA Extract
The following goods which are exempt from Customs Duties under the 5th
Schedule of the EACCMA are also VAT exempt at importation by virtue of
section 20 of the VAT Act. However, if and when these items are sold
locally, they attract VAT at 18%.
Note: This is an abridged listing and may not contain all the details of the
exempted items as contained in the 5th Schedule (as amended)
PART A – SPECIFIC EXEMPTIONS
SN BENEFICIARY GOODS/ITEMS W.E.F
1. The Presidency All goods Jan 2005
The Armed Forces, Police and Jan 2005 & July

2. All goods
Prison services 2015
Commonwealth Armed forces and

3. All goods Jan 2005
Naval vessels
Diplomats and their dependants, Household and personal

the UN and its agencies, High effects, one motor
4. Commissions, Foreign Embassies, Jan 2005
vehicle, goods for official
Diplomatic Missions; and their use and project support.
accredited employees
Donor Agencies with bilateral or Household and personal

5. multilateral Agreements and their effects, one motor Jan 2005
accredited personnel and vehicle.
dependants.
International and Regional

6. Organisations All goods for official use. Jan 2005
_________________________________________________________________
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EACCMA Sch.5
All goods for the

establishment and
maintenance of war
7. The War Graves Commission Jan 2005
cemeteries, except office
supplies and personal
effects.
Specially designed
The disabled, Blind and physically materials, articles and
8. Jan 2005
handicapped equipment, and one
motor vehicle.
One rally motor vehicle

9. Rally Drivers Jan 2005
and spare parts.
All goods and equipment

10. Aid Funded Projects Jan 2005
for the projects.
All goods for official use

11. National Red Cross Societies in provision of relief Jul 2009
services.
PART B – GENERAL EXEMPTIONS
Aircrafts, parts and Jan 2005;

Aircraft Operators and Ground
1. accessories, specialised Modified in Jul
Handlers
equipment, Apron buses 2011
Containers, boxes, tins,

bottles, jars and any
ordinary trade packages, Jan 2005 & Jul
2. Importer pallets, pre-packing 2010. Deleted
slings, export packing July 2015.
materials, [gas cylinders]
and inputs for their
manufacture.
_________________________________________________________________
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EACCMA Sch.5
Used personal effects of

Consignee of Deceased Person’s
3. the deceased, including Jan 2005
effects
one motor vehicle.
Fresh Fish, Crustaceans

and Malluscs (dead or
4. Importer alive), chilled or frozen Jan 2005
caught and landed in
Uganda.
Accompanied baggage,
personal and previously
used household effects,
including one motor
Arriving Passengers, first arrivals
vehicle and goods up to Jan 2005 & Jul
5. or returning residents above the
the value of USD 500, 2010
age of 18.
liquors up to 1 ltr, wine
up to 2 lts, perfumes up
to ¼ ltr, and cigarettes
up to 250g.
Samples and
miscellaneous articles
6. Importer Jan 2005
with no commercial
value
7. Importer Ships and other vessels Jan 2005
Preparations for cleaning

dairy apparatus
Mosquito nets and

9. Importer materials for their Jan 2005
manufacture
Seeds and cut plants for

sowing and planting and
Approved importer by Ministry of specially treated inputs Jan 2005 & Jul
10.
Agriculture use in processing and 2014
preservation of seeds for
sowing.
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EACCMA Sch.5
Chemically defined
Approved importer by Ministry of
11. compounds used as Jan 2005
Agriculture
fertilizers
Exhibits, specimens,
scientific equipment,
12. National Museums chemicals, reagents, Jan 2005
films, visual aids.
Diapers, urine bags and

13. Importer hygienic bags for Jan 2005
medical use.
Diagnostic reagents and

equipment for use in Jan 2005, Jul
14. Approved Importer hospitals, clinics and 2006, Jul 2008
diagnostic laboratories; and July 2016
blood collection tubes
Jan 2005, Sep

Persons engaged in agriculture,
2005, Nov 2009,
15. horticulture, floriculture, poultry, Inputs and gear.
Jul 2010 & Jul
bee keeping
2012
Packaging materials and

raw materials for
16. Importer manufacture of Jan 2005
medicaments.
Educational articles and

materials
Splints for manufacturing

18. Manufacturer Jan 2005
matches
Heating, ventilating and

air conditioning
19. Manufacturer equipment for July 2016
pharmaceutical
manufacturers
_________________________________________________________________
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EACCMA Sch.5
Relief goods for

Government, an approved agent,
20. emergency use in Jul 2006
NGO, relief agency
disaster areas.
Engraved or marked
washing machines,
kitchen ware, cookers,
fridges, freezers, air Sep 2005 & Jul
21. Licensed Hotel conditioning systems, 2008
cutlery, TVs, carpets,
furniture, linen, curtains,
gym equipment
Refrigerated trucks,
insulated tankers, heat Sep 2005, Jul
22. Importer insulated milk tanks and 2008, Nov 2009
aluminium cans for dairy & Jul 2012
industry
23. Importer Speed governors Sep 2005
Wagons, coaches,
locomotives and parts,
equipment and
24. Approved railway operator accessories for the Jul 2013
construction, repair and
maintenance of railway
infrastructure
Electrical energy saving Jul 2006, Jul

25. Importer
bulbs and LED bulbs. 2008 & Jul 2010
Specialised equipment
for development and
generation of Solar and Jul 2006,Jul
26. Importer Wind Energy, including 2010, Jul 2014,
accessories and deep July 2016
cycle batteries which use
and/or store solar power.
Plastic bag biogas

27. Importer Jul 2013
digesters
_________________________________________________________________
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EACCMA Sch.5
Engraved or marked
shadow-less lamps,
blood freezers,
kitchenware and
equipment, laundry
equipment, mattresses Jul 2007,
28(1) Licensed Hospitals
and linen, bedside July 2016
screens, air conditioners,
[hospital staff uniforms –
deleted], water heating
equipment, trolleys and
stretchers, furniture.
Incinerators equipment
28(2) Licensed Hospitals July 2016
and materials”
Motor vehicles specially

Local authorities or their
29. designed for garbage Jul 2008
contractors
collection and disposal
Machinery, spares and

equipment used in oil, Nov 2009 & Jul
30. Licenced company gas and mining 2012
operations.
Replacement spare parts

for industrial machinery
31. Registered manufacturers Jul 2009
under chapters 84 & 85
of the CET.
Specially designed motor

Licenced and recommended Tour
32. vehicles for Jul 2009
operators
transportation of tourists.
Examination gloves for

33. Importer laboratory and medical Jul 2010
use.
34. Importer Tsetse fly traps Jul 2011
_________________________________________________________________
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EACCMA Sch.5
Security equipment like

metal detectors, CCTV
35. Importer cameras, bomb Jul 2011
detectors and under
carriage mirrors
Battery operated
vehicles for use in
hotels, hospitals and
airports.
Inputs for use in

37. Approved manufacturers manufacturing medical Jul 2012
diagnostic kits.
Water treatment effluent

plant
Refrigeration equipment
for dead bodies for use
39. Importer July 2016
in Hospital, city council
or funeral home
_________________________________________________________________
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Finance Acts Extracts
FINANCE ACTS – Extracts

THE FINANCE ACT 2013
Commencement 1st July 2013

SCHEDULE
Fees Payable under Specified Enactments
FEES
ITEM
(UGX/USD)
1. Business Names Registration Act, Cap.109 UGX
a) For certified copy of certificate of registration ( per copy) 5,000
2. Registration of Titles Act, Cap.230
a) Registration fees in respect of transfer of land 30,000
b) Consent to transfer land 20,000
c) Application for extension of lease 20,000
d) Registration of court order 20,000
3. Mortgage Act, 2009 (Act No. 8 Of 2009)
a) Registration fees 40,000
b) Certification of a mortgage 4,000
4. Uganda Citizenship And Immigration Control Act, Cap 66
Part I - Passports
a) Diplomatic 300,000
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b) Official 250,000
c) Ordinary 150,000
d) East African 80,000
e) Conventional Travel Documents (CTDs) 120,000
f) Passports processed within 2 working days 300,000
Part II - Work Permits
FEES IN USD ($) BY MONTHS
6 12 24 36
a) Class B (Agriculture) 800 2500 4000 5000
b) Class C (Mining ) 800 2500 4000 5000
c) Class E (Manufacturing) 800 2500 4000 5000
d) Class F(Professional) 800 2500 4000 5000
e) Class G (Expatriate
800 2500 4000 5000
employment)
Other Finance Act 2015 amendments (Not under this Schedule)

 Single entry visa = $ 100
 Non-refundable prepayment fee on application for work permit = $ 1500
Part III - Certificate of Residence

a) 5 years USD 2500
b) 10 years USD 2000
c) 15 years USD 2500
d) For life USD 2500
e) Due to marriage USD 500
Part IV - Other Fees
a) Temporary movement permit UGX 10,000
b) Illegal stay (per day) USD 100
c) Airlines or carriers fine for inadmissible USD 3000
5. The Companies Act, 2012 ( Act No. 1 of 2012) - Fees Payable to the Registrar
a) On making request to the registrar to approve and reserve any

name for registration of a company or change of name of a 20,000
company
i) For the registration of a company whose nominal share

50,000
capital does not exceed Shs. 5,000,000.
_________________________________________________________________
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1% of
ii) For the registration of a company whose nominal share
nominal
capital exceeds Shs. 5,000,000
share capital
iii) For the registration of a company without nominal share

80,000
capital
b) For any resolution required to be filed under the companies Act
i) 3 copies 20,000
ii) Every extra copy 10,000
c) For the filling of amended Articles of Association and

Memorandum of Association.
i) 3 copies
ii) Every extra copy
d) For registration of annual return of a company, including a copy

of the balance sheet or a certificate that no invitation has been
made to the public to subscribe to its shares;
i) 3 copies 50,000
e) For registration of the annual return of a company without a

nominal share capital
i) 3 copies 30,000
f) For registration of any application to the Registrar under the

20,000
Company Act
g) For registration of any Notice or Order required to be delivered,

20,000
sent or forwarded to the registrar
h) For the certification of any company document
i) 3 copies 20,000
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- 310 -
1% of the amount by which the

i) For the registration of any increase of share
increased share capital
capital made after the first registration of the
exceeds the share capital on
company
the preceding registration
j) For the registration of any document effecting a transfer of

shares
i) 3 copies 20,000
k) For registering a certified copy of the charter, statue or
memorandum and articles of the company or other instrument USD 250
constituting or defining the constitution of the company
i) 3 copies USD 250
ii) Every extra copy USD 10
l) For registering any other document required to be delivered to
the registrar under part X of the Act.
i) 3 copies USD 55
ii) Every extra copy USD 10
m) For registering under part IV of the Act, any charge required to
50,000
be registered by a company
n) For registering particulars of a series of debentures under the

50,000
Act.
o) For registering the appointment of a receiver or manager of the

25,000
property of a company under section 103 of the Act.
p) For inspecting the register of charges for each inspection 25,000
q) For inspecting the register of companies in respect of any one

25,000
company or for each inspection of a company’s file
r) For the issue of a license by the Minister dispensing with the

50,000
word limited.
_________________________________________________________________
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Excise Duty Act 2014
THE EXCISE DUTY ACT, 2014

An Act to consolidate and amend the law relating to excise duty and to
provide for related matters.
Date of Commencement: 1st July, 2014.
1. Commencement
2. Interpretation
3. Associate
PART II - IMPOSITION, LIABILITY AND PAYMENT OF EXCISE

DUTY
4. Imposition of excise duty
PART III - LICENSING OF MANUFACTURERS, IMPORTERS AND

PROVIDERS OF EXCISABLE GOODS AND SERVICES.
5. Licence for premises
PART IV - CONTROL OF EXCISABLE GOODS
6. Provision of facilities for excise control

7. Entry
8. Storage of excisable goods after manufacture
9. Deficiency or excess in stock
PART V - PAYMENT OF EXCISE DUTY, RETURNS, ASSESSMENTS

AND APPEALS
10. Payment of excise duty

11. Application of information technology
12. Refunds
13. Liability to duty on re- importation
14. Excisable goods or excisable services granted remission liable to duty on
disposal
_________________________________________________________________
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PART VI - MISCELLANEOUS
15. Prices quoted to include duty

16. Regulations
17. Power of Minister to amend Schedule
18. Repeal and savings
1. Commencement
This Act shall be deemed to have come into force on 1st July, 2014
2. Interpretation
“aircraft” includes every description of craft used in aerial navigation;
“assessment” means –
(a) the ascertainment of excise duty under this Act; or
(b) the ascertainment of the amount of interest and any other amount
payable by a person under this Act;
(c) a decision of the Commissioner which, under this Act, is subject

to objection and appeal;
“Authority” means the Uganda Revenue Authority established by the

“beer” includes ale, porter, and any other description of beer and any liquor
which is made or sold as a description of, or substitute for, beer and which
contains more than two per cent of proof spirit but does not include –
(a) liquor as defined in the law relating to liquor; or
(b) any kind of beer prescribed by regulations;
“cigar” means a cigar, cheroot, or cigarillo, prepared from tobacco;
_________________________________________________________________
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“cigarette” means a cigarette prepared from tobacco and includes any form of
tip and the paper;

“distiller” means a manufacturer of spirits by distillation of a fermented

liquor or enguli or by any other process;
“distillery” means a distiller’s factory;
“distiller’s warehouse” means a place of security provided by a distiller and

approved by the Commissioner under this Act;
“document” includes magnetic tapes, disks and microfilms;
“enguli” means a spirituous liquor including a drink containing liquor, which

is conveyed into a receiver in a distillery entered under this Act as an enguli
receiver;
“excisable goods” means goods manufactured in Uganda and imported into

Uganda and specified in Schedule 2 but does include goods exempt from
duty;
“excisable services” means the services specified in Schedule 2;
“excise duty” means a duty imposed under this Act;
“export” means to take or cause to be taken out of Uganda;
“goods exempt from duty” means the goods specified in Schedule 3;
“import” as used in relation to goods has the meaning assigned to it in the

Value Added Tax Act;
“importer” as used in relation to goods has the meaning assigned to it in the

“manufacture” includes the production of excisable goods or any

intermediate or uncompleted process in the production of excisable goods or
the rectifying or denaturing of spirits;
_________________________________________________________________
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“materials” means the goods from which excisable goods are capable of being
manufactured and any residue from the process of manufacture;
“officer” includes a person other than a labourer employed in the service of

the Uganda Revenue Authority and whose right or duty it is to require the
performance of any act in this Act;
“own use” in relation to services means applying the services for non-
business use;
“owner” in respect of any excisable goods, materials, aircraft, vessel, vehicle,

plant, or other thing, includes a person who is or holds himself or herself out
to be the owner, manufacturer, agent or the person in possession of, or
beneficially interested in, or having control of, or power of disposition over,
such goods, materials, aircraft, vessel, vehicle, plant, or other thing;
“plant” includes utensils, presses, machinery, mills, implements, appliances

and fittings;
“premises” includes a building, house, room or place;
“registered person” means a person registered to manufacture excisable

goods, import excisable goods or provide excisable services under this Act;
“rectifier” means a person who redistills spirits removed from a spirits

receiver for the purpose of purifying or adding flavour but does not include
the re-distillation of enguli;
“return” means a return of excise duty;
“specially denatured spirits” means spirits denatured in accordance with a

formula prescribed by regulations made under this Act for specially
denatured spirits;
“spirits” means spirits of any description and includes all liquor mixed with
spirits and all mixtures and compounds or preparations made with spirits but
does not include denatured spirits or enguli;
“sugar” includes a saccharine substance, extract, or syrup, rice, flaked maize,

any other description of corn which in the opinion of the Commissioner is
prepared in a manner similar to flaked maize and any other material capable
of being used in brewing except malt, corn, hops, hop concentrate, or hop oil;
_________________________________________________________________
- 315 -
“supply” as used in relation to services has the meaning assigned to it in the

“telecommunications services” means a service for the transmission,

emission, or reception of signals, writing, images, sounds, or information of
any kind by wire, radio, optical, or other electromagnetic systems and
includes the related transfer or assignment of the right to use capacity for
such transmission, emission, or reception the provision of access to global or
local information networks, but does not exclude a private network for the
exclusive use of the person;
“tribunal” means the tax appeals tribunal established by the Tax Appeals
Tribunal Act;
“value added services” means content, products or services offered in the

telecom sector via the mobile platform and includes short messaging service
and multimedia messaging service which afford the user flexibility in
accessing other services including mobile betting, games, paying for services,
products or promotions but does not include standard voice calls, peer to peer
short messaging service and multimedia messaging service, fax transmission,
internet, mobile money transactions and games promoted by a value added
service provider licensed by the National Lotteries Board;
“value added tax” means value added tax imposed under the Value Added
Tax Act;
“wash” means the fermented liquor from which spirits are produced by
distillation;
“wine” means liquor of a strength not exceeding fifty degrees of proof which
is made from fruit and sugar and which fruit or sugar mixed with any other
material and which had undergone a process of fermentation in its
manufacture and includes mead.
3. Associate
(1) For the purposes of this Act, where a person who is not an employee
acts in accordance with the directions, requests, suggestions or wishes of
another person whether or not they are in a business relationship and
whether those directions, requests, suggestions or wishes are
communicated to the first-mentioned person, both persons are treated as
associates of each other.
_________________________________________________________________
- 316 -
(2) Without limiting the general effect of subsection (1), the following are
(a) a relative of the person, unless the Commissioner is satisfied that

suggestions or wishes of the other person;
(b) a partner of the person, unless the Commissioner is satisfied that

suggestions or wishes of the other person;
(c) a partnership in which the person is a partner where the person,

another application of this section, controls fifty percent or more of
the rights to income or capital of the partnership;
(d) the trustee of a trust under which the person, or an associate under
another application of this section, benefits or may benefit;
(e) a company in which the person, either alone or together with an

associate under another application of this section, controls fifty
percent or more of the voting power in the company either directly
or through one or more interposed companies, partnerships or
trusts;
(f) where the person is a partnership, a partner in the partnership who,

another application of this section, controls fifty percent or more of
the rights to income or capital of the partnership;
(g) where the person is the trustee of a trust, any other person who
benefits or may benefit under the trust; or
(h) where the person is a company –
(i) a person who, either alone or together with an associate or

associates under another application of this section, controls
fifty percent or more of the voting power in the company,
partnerships or trusts; or
(ii) other company in which the person referred to in

subparagraph (i), either alone or together with an associate or
_________________________________________________________________
- 317 -
associates under another application of this section, controls

fifty percent or more of the voting power in that other
company, either directly or through one or more interposed
companies, partnerships or trusts.
PART II - IMPOSITION, LIABILITY AND PAYMENT OF EXCISE

DUTY
4. Imposition of excise duty
(1) Subject to this Act, the excisable goods and excisable services specified
in Schedule 2 shall be chargeable with the excise duty specified in that
Schedule.
(2) Unless otherwise provided in this Act excise duty –
(a) in the case of an excisable service, is to be paid by the person

providing the service;
(b) in the case of a manufactured excisable good, is to be paid by the

person manufacturing the excisable good; and
(c) in the case of an imported excisable good, is to be paid by the

person importing the excisable good.
(3) A manufacturer of an excisable good becomes liable to pay excise duty

on that manufactured excisable good when the manufactured good is
removed from the manufacturer’s premises.
(4) A person providing an excisable service becomes liable to pay excise

duty on that service on the date of provision of the service.
(5) An importer of excisable goods shall pay excise duty at the time of
import.
PART III - LICENSING OF MANUFACTURERS, IMPORTERS AND

PROVIDERS OF EXCISABLE GOODS AND SERVICES
5. Licence for premises
(1) For the purpose of facilitating the administration of excise duty a

registered person shall apply for a licence for premises in which the
_________________________________________________________________
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manufacture, provision or dealing in excisable goods or excisable

services takes place.
(2) The application shall be in the form prescribed by the Commissioner.
(3) Within one month after receiving the application under subsection (1),
the Commissioner may grant or refuse the application.
(4) The Commissioner may require the applicant to meet specified

conditions before licensing the premises of the applicant.
(5) The Commissioner may grant or renew a license, with or without

conditions.
(6) Where the Commissioner refuses to license premises, the Commissioner

shall give reasons for the refusal.
(7) Where the Commissioner licenses premises under this section, the
Commissioner shall, on payment of the prescribed fee by the applicant,
issue to the applicant a license.
(8) The certificate of registration shall be in a form prescribed by the

Commissioner.
(9) The Commissioner shall establish and maintain a register containing the
relevant details of all premises licensed under this section.
(10) A licence issued under this section is valid for twelve months from the
date of issue.
(11) A registered person may apply to the Commissioner, in the approved

form and prescribed manner, for renewal of a licence issued under this
section.
(12) An application for renewal of a licence under subsection (5) must be

made before the expiry date of the licence or within such further time as
the Commissioner may allow and be accompanied by payment of the
prescribed fee for renewals.
(13) The Commissioner must cancel a licence issued under this section if
satisfied that the premises no longer meet the conditions for the grant of
the licence.
_________________________________________________________________
- 319 -
(14) A registered person shall not use the licensed premises for a purpose
other than that the purpose for which the premises were licensed.
PART IV - CONTROL OF EXCISABLE GOODS
6. Provision of facilities for excise control
(1) The Commissioner may for the purpose of ensuring the proper
performance of the provisions of this Act require an officer to be
stationed on the licensed premises of a registered person under this Act.
(2) The Commissioner may, for the purposes of subsection (1), require the
registered person to provide and maintain, to the satisfaction of the
Commissioner, suitable office accommodation and equipment in the
licensed premises.
(3) A registered person shall provide and maintain at the licensed premises
storing excisable goods, scales and weights, lights, ladders, and other
equipment, as may be necessary to enable an officer to take account of,
or check by weight, gauge, or measure, all excisable goods or materials
in the licenced premises.
7. Entry
(1) A registered person shall, before commencing manufacture of excisable

goods, make entry in the prescribed manner of each building, room,
place, and item of plant in the licensed premises, which the registered
person proposes to use in the manufacture, preparation for sale, or
storage, of materials or excisable goods.
(2) An entry under subsection (1) shall specify the purpose for which a
building, room, place or item of plant, is to be used and, unless the
Commissioner otherwise permits, the mark by which it is to be
distinguished.
(3) The Commissioner may, by notice in writing to the registered person,

require a new entry to be made by the registered person within one
month of the date of the notice.
(4) A registered person shall not, in the course of manufacture, preparation,

sale or storage, of any materials or excisable goods –
_________________________________________________________________
- 320 -
(a) make use of any building, room, place, or item of plant, in relation
to which entry is required under this section unless there is in force
a valid entry;
(b) make use of a building, room, place, or item of plant, for any
purpose other than that for which it was entered;
(c) effect, without the prior permission of the Commissioner, an

alteration to any building, room, place, or item of plant.
(5) A registered person who contravenes subsection (5) commits an offence

and is liable on conviction to imprisonment not exceeding three years or
a fine not exceeding seventy two currency points or both.
(6) Where a person is convicted under subsection (5), the court shall order
the forfeiture of any excisable goods, materials or plant in respect of
which the offence has been committed.
8. Storage of excisable goods after manufacture
(1) All manufactured excisable goods shall, after the process of

manufacture has been completed, be immediately removed to a room to
be known as the “stock room”.
(2) The stock room shall be within the licensed premises.
(3) The stock room shall not be used for any purpose other than that of
storing manufactured excisable goods after they have been
manufactured.
(4) All manufactured excisable goods kept in the stock room shall be stored
in a manner that facilitates the taking of a full account of all the goods.
(5) A registered person who contravenes this section commits an offence

and is liable on conviction to a fine not exceeding seventy two currency
points or imprisonment not exceeding three years and the court
convicting the offender shall forfeit the excisable goods to the State.
(6) A stock book shall be kept in the prescribed form and shall be available
for inspection by the Commissioner.
(7) The Commissioner may take copies of any entry in the stock book.
_________________________________________________________________
- 321 -
9. Deficiency or excess in stock
(1) Where, upon the Commissioner taking stock of the manufactured

excisable goods in the licensed premises of a registered person –
(a) the registered person fails to account to the Commissioner for any
excisable goods manufactured by him or her, the excise duty on
those manufactured excisable goods shall immediately become due
and payable;
(b) any excisable goods are found in excess of the quantity which,
according to the stock book of the registered person must be in the
stockroom, those goods shall be forfeited to the State.
(2) A registered person –
(a) who fails to account to the Commissioner for any excisable goods
manufactured by the registered person; or
(b) in whose licensed premises excisable goods are found in excess of

the quantity which, according to the stock book, should be in the
licensed premises, unless the registered person explains the
deficiencies or excess to the satisfaction of the Commissioner, the
registered person commits an offence, and is liable on conviction
to a fine not exceeding seventy two currency points or
imprisonment not exceeding three years or both.
PART V - PAYMENT OF EXCISE DUTY, RETURNS, ASSESSMENTS

AND APPEALS
10. Payment of excise duty
(1) A person liable to pay excise duty shall pay the duty on the date the
person files a return with the Commissioner, or shall, in the case of an
assessment, pay the excise duty within forty five days after receipt of the
notice of assessment.
(2) Where excisable goods on which excise duty has been paid are
converted into other excisable goods liable to excise duty, the converted
excisable goods shall be liable only to the difference between the excise
duty on the converted goods and the excise duty originally paid before
the conversion.
_________________________________________________________________
- 322 -
(3) Where excisable goods on which excise duty has been paid are
converted into approved healthcare or medical products, a refund of the
3 & 4 inserted by
IT (Am) Act 2016
excise duty shall be provided to the manufacturer of the approved health
care or medical products.
(4) In this section, “approved healthcare or medical product” means a

product that has been approved by the Minister responsible for finance
in consultation with the Minister responsible for health, in accordance
with regulations made under section 16.
11. Application of information technology
Subject to conditions the Commissioner may prescribe, the formalities or

procedures under this Act which may be carried out by use of information
technology.
12. Refunds
(1) A person liable to pay excise duty may apply to the Commissioner for a
refund of any excise duty paid in error or in excess of the excise duty
assessed or due.
(2) An application for a refund under this section shall be made to the
Commissioner in the form and manner prescribed by the
Commissioner.
(3) Where the Commissioner is satisfied that excise duty has been
overpaid, the Commissioner shall –
(a) apply the excess in reduction of any other duty due from the
person liable to pay excise duty; and
(b) at the written option of the person liable to pay excise duty, apply
the balance of the excess, if any, in reduction of any outstanding
liability of the person liable to pay excise duty in regard to other
taxes not in dispute.
(4) In this section “any other duty” means a duty other than excise duty.
(5) Where the Commissioner is required to refund an amount of excise

duty to a person under this Act, the Commissioner shall pay simple
interest on the amount of the refund at the rate of two percent per
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month commencing thirty days after the date the application for the
refund and ending on the last day on which a refund is made.
(6) Notwithstanding subsection (4), a person liable to excise duty who

causes delay in determining a correct refund payable to him or her, and
leading to a belated refund process, is only entitled to interest with effect
from sixty days from the date on which he or she filed his or her delayed
return, lodged an application with the tribunal or the High Court, or
submitted to the Commissioner all necessary and satisfactory
information required in relation to the refund in question, whichever is
the later.
(7) The Commissioner shall, within thirty days after making a decision on a
refund application under subsection (1), serve on the person applying
for the refund a notice in writing of the decision.
(8) A person dissatisfied with a decision referred to in subsection (5) may

challenge the decision under the objection and appeal procedure in this
Act.
13. Liability to duty on re- importation
Where a remission or refund of excise duty has been granted in respect of

excisable goods or excisable services which have been exported and those
excisable goods or excisable services are subsequently unloaded in Uganda
for home consumption those excisable goods or excisable services are liable
to excise duty in force at the time of the unloading.
14. Excisable goods or excisable services granted remission liable to duty

on disposal
(1) Subject to this Act, a person who has been granted a remission or refund
in respect of excisable goods or excisable services or is in possession of
excisable goods for which a remission or refund has been granted, shall
not subsequently deal with those excisable goods or supply those
excisable services in a manner inconsistent with the purpose for which
the remission or refund was granted.
(2) A person who deals with excisable goods or supplies excisable services
in a manner inconsistent with the purpose for which the remission or
refund was granted is liable to pay the excise duty which would have
been paid if the remission or refund had not been granted.
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(3) Where excisable goods to which subsection (1) applies are sold or
disposed of without payment of the excise duty to which they are liable,
the excisable goods shall be forfeited to the State.
(4) A person who knowingly disposes of or knowingly acquires excisable

goods or knowingly provides or knowingly receives excisable services,
to which subsection (1) applies without the duty on the goods or
services having been paid commits an offence and is liable, on
conviction, to a fine not exceeding forty eight currency points or
imprisonment not exceeding two years or both.
PART VI - MISCELLANEOUS
15. Prices quoted to include excise duty
The price advertised or quoted for an excisable good or service shall include
excise duty and the advertisement or quotation shall state that the price
includes excise duty.
16. Regulations
(1) The Minister may, by statutory instrument, make regulations to better

carry into effect the provisions of this Act.
(2) Without limiting the general effect of subsection (1), regulations made
under this section may –
(a) provide for the fees to be paid for a licence issued under this Act;
(b) provide for the form of the returns to be made by a registered

person;
(c) provide for the securing and collection of excise duty on spirits;
(d) prescribe the maximum and minimum strength of a wort, wash or

spirits;
(e) regulate the remission of excise duty including the remission of

excise duty on spirits;
(f) regulate the receipt, storage, warehousing, removal and delivery of

spirits prior to the payment of excise duty.
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(3) Regulations under subsection (1) may provide that a person who
contravenes a provision of the regulations commits an offence and is
liable on conviction to a fine not exceeding seventy two currency points
or both.
17. Power of Minister to amend Schedule
The Minister may, by statutory instrument, with the approval of Cabinet,

amend Schedule 1.
18. Repeal and savings
(1) The East African Excise management Act, 1970 and the Excise Tariff
Act, Cap. 338 are repealed.
(2) Notwithstanding subsection (1),
(a) all excise duty due in respect of a transaction that took place before
the commencement of this Act shall be due and payable as if the
repealed Act were still in force but in case of a default the person
shall be dealt with under this Act;
(b) all appointments made under the repealed legislation and

subsisting at the date of commencement of this Act are taken to be
appointments made under this Act;
(c) all forms and documents used in relation to the repealed legislation
may continue to be used under this Act, and all references in those
forms and documents to provisions of and expressions appropriate
to the repealed legislation are taken to refer to the corresponding
provisions and expressions of this Act.
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SCHEDULE 1
Section 2
Currency Point
One currency point is equivalent to twenty thousand shillings
SCHEDULE 2
Section 3,3A, 3AA, 3B
Part I—Excise Duty In Respect Of Excisable Goods

And Services
DUTY RATE
EXCISABLE GOOD OR SERVICE
2016/2017 2017/2018
1. Cigarettes
Shs.50,000 per
a) Soft cup [Other soft cup] -
1,000 sticks
Shs.55,000 per
Locally manufactured -
1,000 sticks
Shs.75,000 per
Imported -
1,000 sticks
Shs.80,000 per
b) Hinge Lid -
1,000 sticks
Shs.80,000 per
Locally manufactured -
1,000 sticks
Shs.100,000 per
Imported -
1,000 sticks
c) Cigars, cheroots and cigarillos
200% 200%
containing tobacco
d) Smoking tobacco, whether or not
containing tobacco substitutes in 200% 200%
any proportion
e) Homogenised or reconstituted
200% 200%
tobacco
f) Other 200% 200%
2. Beer
60% or shs.1860 per
a) Malt beer 60% litre, whichever is
higher
b) Beer whose local raw material 30% or shs.650 per

content, excluding water, is at 30% litre, whichever is
least 75% by weight of its higher.
constituent
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30% or Shs.950 per

c) Beer produced from barley grown
30% litre, whichever is
and malted in Uganda
higher.
3. Spirits
a) Made from locally produced raw
60% 60%
materials
Shs.2500 per litre or 100% or shs.2500

b) Undenatured spirits 100%, whichever is per litre, whichever is
higher higher
c) Other spirits 80% 80%

4. Wine
a) Made from locally produced raw
20% 20%
materials
60% or shs.6000 per
b) Other wines 80% litre, whichever is
higher.
5. Non-alcoholic
13% or shs.240 per
a) Non-alcoholic beverages not
13% litre, whichever is
including fruit or vegetable juices.
higher.
b) Fruit juice and vegetable juice,

13% or shs.300 per
except juice made from at least
- litre, whichever is
30% of pulp from fruit and
higher.
vegetables grown in Uganda.
Mineral water, bottled water and other

6. 10% 10%
water purposely for drinking
7. Cement Shs.500 per 50kgs Shs.500 per 50kgs
8. Fuel
a) Motor spirit (gasoline) Shs.1100 per litre Shs.1100 per litre
b) Gas oil (automotive, light, amber
Shs.780 per litre. Shs.780 per litre.
for high speed engine)
c) Other gas oils Shs.630 per litre Shs.630 per litre
d) Gas oil for thermal power

Nil Nil
generation to national grid
e) Illuminating kerosene Ushs. 200 per litre Ushs. 200 per litre
f) Jet A1 and aviation fuel Shs.630 per litre Shs.630 per litre
g) Jet A1 and aviation fuel imported

by registered airlines, companies
Nil Nil
with designated storage facilities
or with contracts to supply airlines
Cane or beet sugar and chemically

9. pure sucrose in solid form Shs.100 per kg Shs.100 per kg
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10. Cane or beet sugar for industrial use 0% 0%

Sacks and bags of polymers of
ethylene and other plastics under its
11. HS codes 3923.21.00 and 3923.29.00 120% 120%
except vacuum packaging bags for
food, juices, tea and coffee.
Cosmetics and perfumes, except
12. creams used by Albino in the 10% 10%
treatment of their skin
13. Telecommunication Services
a) Value added services 20% 20%
b) Incoming international call
services, except calls from the
USD 0.09 per minute USD 0.09 per minute
Republic of Kenya, the Republic
of Rwanda and the Republic of
South Sudan.
c) Money transfer or withdrawal
services, including transfers and
withdraw services by the
operators licensed or permitted to
10% of the fees 10% of the fees
provide communications or
charged charged
money transfer or withdrawal but
not including transfer and
withdraw services provided by
banks.
d) Other usage of airtime
i) Mobile cellular 12% 12%
ii) Landlines and public pay
5% 5%
phones
Ledger fees, ATM fees, withdrawal
fees and periodic charges and other
transaction and non-transaction 10% of the fees 10% of the fees
14.
charges, excluding loan related charged charged
charges periodically charged by
financial institutions.
15. Motor vehicle lubricants 10% 10%
Sugar confectionaries (Chewing gum,
16. 20% Nil
sweets and chocolates)
Furniture
(a) Specialised hospital furniture Nil Nil
17. (b) Furniture manufactured in
Uganda using local materials but
Nil
excluding furniture which is
assembled in Uganda.
(c) Other furniture 10% 20%
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Part II - Calculation of Excise Duty Payable in Respect of Excisable Goods

and Services whose Excise Duty is expressed in Percentages
1. Calculation of excisable duty payable
The excise duty payable by a person in respect of excisable goods or services

whose excise duty is expressed as percentages shall be calculated using the
AxB
where,
A is the value of the excisable goods or the excisable service; and
B is the rate of excise duty applicable to the goods or service.
2. Determination of value of excisable goods and services
(1) The value of an excisable good shall be the normal ex-factory price of the
good exclusive of any tax on that good.
(2) The normal ex-factory price of the good shall include raw material costs,
manufacturing costs, labour costs, profit margin, bank charges and
interest and all other costs, charges and expenses incidental to the
factory, production and sale.
(3) The value of an excisable service shall be the price paid or payable by the
consumer of that service excluding value added tax chargeable under the
Value Added Tax Act and excise duty chargeable under this Act.
(4) In the case of non-arm’s length transactions, the normal ex-factory price
shall be the price at which the transaction would have occurred in the
ordinary course of business between the person liable to excise duty and
an independent person dealing at arm’s length and, in cases where the
price cannot be determined, the price shall, subject to this Act, be
decided by the Commissioner.
(5) A sale in the open market between a manufacturer and a buyer

independent of each other presupposes –
(a) that the price is the sole consideration;
(b) that the price is not influenced by any commercial, financial or

other relationship, whether by contract or otherwise, between the
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manufacturer or any person associated in business with him and

the buyer; and
(c) that no part of the proceeds of the subsequent re-sale, use or

disposal of the goods or services will accrue either directly or
indirectly to the manufacturer or any person associated with him.
(6) Notwithstanding this Act, where the Commissioner is satisfied that an

arrangement has been entered into or carried out where –
(a) a person has obtained an excise duty benefit in connection with the
arrangement; and
(b) having regard to the substance of the arrangement, it is concluded

that the person, or one of the persons, who entered into or carried
out the arrangement did so for the sole or dominant purpose of
enabling the person to obtain the excise duty benefit,
the Commissioner may determine the liability of the person who has
obtained the excise duty benefit as if the arrangement had not been
entered into or carried out, or in a manner as in the circumstances the
Commissioner considers appropriate for the prevention or reduction of
the excise duty benefit.
(7) In this section –
(a) “arrangement” includes an agreement, promise, or undertaking

whether express or implied and whether or not enforceable, or
intended to be enforceable, by legal proceedings, and a plan,
proposal, course of action, or course of conduct; and
(b) “excise duty benefit” includes –
(i) a reduction in the liability of a person to pay excise duty;
(ii) an increase in an entitlement of a person to a credit or refund;

or
(iii) any other avoidance or postponement of liability for the

payment of excise duty.
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(8) The value of an imported excisable good is the sum of the value of the
good ascertained for the purposes of import duty under the laws relating
to customs; and the amount of import duty payable on that good.
(9) The value of an excisable service is the amount exclusive of any tax and
duty, paid or payable by the final consumer in consideration for the
service.
(10) Where no amount is paid in consideration for the excisable service under
subsection (9) or where there is an application of the excisable service to
own use by the person providing the service, the value of the excisable
service shall be the market value of the excisable service.
(11) The taxable value of money transfer services by cellular service

providers, money transfer agencies and other financial service providers
shall be the fees charged for a particular money transfer service
transaction.
SCHEDULE 3
Section 2
Goods Exempt from Excise Duty
The goods exempt from excise duty are imported goods which are exempt
from import duty under the Fifth Schedule to the East African Customs
Management Act, 2004
Cross References
East African Customs Management Act, 2004

Excise Tariff Act, Cap. 338
Liquor Act, Cap. 93
Magistrates Court Act, Cap. 16
Tax Appeals Tribunal Act, Cap. 345
Uganda Revenue Authority Act, Cap. 96
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Stamp Duty Act Rates
STAMP DUTY RATES

(Under Schedule 2 of the Stamp Duty Act, 2014)
Stamp Duty is charged on any instrument, in the Schedule below, which is

executed in or outside Uganda, and which relates to property situated in
Uganda or to a matter or thing done or to be done in Uganda. Instruments
executed by, on behalf of, or in favour of the Government of Uganda are
exempted. The exemption also extends to various international organisations
as listed in the tax laws. Instruments are expected to be stamped within 45
days of the execution if executed in Uganda, and within 30ndays of being
received in Uganda if executed outside Uganda.
SCHEDUEL 2
STAMP DUTY
DESCRIPTION OF INSTRUMENT 2016/2017
2015/2016
TO DATE
ACKNOWLEDGEMENT of a debt exceeding

1. NIL NIL
shs.100,000
(a) ADMINISTRATION BOND 5000/= 10,000/=

2.
(b) CUSTOMS BONDS - of the total value 0.05 % 0.05%
3. ADOPTION DEED 5000/= 10,000/=
4. AFFIDAVIT including an affirmation or declaration 5000/= 10,000/=
AGREEMENT OR MEMORANDUM of an
5. 5000/= 10,000/=
agreement.
AGREEMENT relating to deposit of title - deeds,

6. 1% 1%
pawn pledge - of the total value
APPOINTMENT IN EXECUTION of a power, whether

7. 5000/= 10,000/=
of trustees or of property
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APPRAISMENT OR VALUATION made otherwise

8. NIL NIL
than under an order of court - of the total value.
9. APPRENTICESHIP DEED 5000/= 10,000/=
10. ARTICLES OF ASSOCIATION OF A COMPANY 10,000/= 10,000/=
ASSENT TO BEQUEST WHETHER UNDER HAND

11. 5,000/= 10,000/=
OR SEAL
12. AWARD by arbitrator or umpire 5,000/= 10,000/=
BILL OF EXCHANGE not being a bond, bank note or

13. 5,000/= 10,000/=
currency note
14. BILL OF LADING (including a thorough bill of lading) NIL NIL
15. BILL OF SALE 5,000/= 10,000/=
16. BOND (not being a debenture) 5,000/= 10,000/=
17. CANCELLATION - instrument of 5,000/= 10,000/=
CAPITAL DUTY
(a) On nominal share capital or any increase of it of 0.5 % 0.5%

any company incorporated in Uganda with limited
liability - of the total value.
18. (b) On increase of share capital of any company

when the increase is a condition precedent for
NIL NIL
disbursement of loan funds for a development
project.
(c) On becoming public through the operation of the

NIL NIL
stock exchange.
CAVEAT (under the Registration of Titles Act or any

19. 5,000/= 10,000/=
other law relating to the registration of title to land)
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CERTIFICATE OF SALE (in respect of each property

20. 5,000/= 10,000/=
put up as a separate lot and sold)
CHARTER PARTY (instrument for charter hire or

21. 5,000/= 10,000/=
vessel or part of it)
22. CHEQUE NIL NIL
COMPOSITION DEED (instrument of conveyance of

23. property by a debtor for the benefit of his creditors) - 1% 1%
of the total value
CONVEYANCE (not being transfer) - of the total

24. 5,000/= 10,000/=
value
25. COPY OF EXTRACT 5,000/= 10,000/=
COUNTERFEIT OR DUPLICATE of an instrument

26. chargeable with duty and in respect of which the 5,000/= 10,000/=
property duty has been paid.
DEBENTURE - whether a mortgage debenture or

27. not, being of a marketable security - of the total 0.5 % 0.5%
value.
28. DEED 5,000 10,000/=
DIVORCE - (any instrument by which any person

29. 5,000 10,000/=
effects the dissolution of marriage)
30. EQUITABLE MORTGAGE - of the total value 0.5 % 0.5%
31. EXCHANGE OF PROPERTY – of the total value 1% 2%
32. EXTRACT 5,000/= 10,000/=
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FURTHER CHARGE - any instrument imposing a

33. 0.5 % 0.5%
further charge on mortgaged property - of the total
value
GIFT - Instrument of not being a settlement or will or

34. 1% 1%
transfer – of the total value
35. HIRE PURCHASE AGREEMENT - of the total value 1% 1%
36. INDEMNITY BOND 1% 1%
INSTRUMENT – for a loan not exceeding Uganda

37. NIL NIL
shillings three million
38. LEASE - of the total value 1% 1%
LETTER OF CREDIT - an instrument by which one

39. person authorizes another to give credit to the person 5,000/= 10,000/=
in whose favour it is drawn
LETTER OF LICENSE - any agreement between a

debtor and his creditors that the latter shall for a
40. 5,000/= 10,000/=
specified time, suspend their claims and allow the
debtor to carry on business at his own discretion
MEMORANDUM OF ASSOCIATION OF A
41. 10,000/= 10,000/=
COMPANY
(a) Mortgage deed - of the total value.
A MORTGAGOR who gives a power of attorney

0.5 % 0.5%
to collect rents or a lease of the property
mortgaged is deemed to give possession within
the meaning of this item.
42.
(b) Where a collateral or auxiliary or additional or

substituted security is given by way of further
5,000/= 10,000/=
assurance where the principal or primary security
is duly stamped.
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MORTGAGE OF A CROP - including any instrument

endorsement, note, attestation, certificate or entry not
being PROTEST OF A BILL OF NOTE, made or
43. 5,000/= 10,000/=
signed by a Notary Public in the execution of the
duties of his office or by other person lawfully acting
as Notary Public
NOTARIAL ACT - made or signed by a Notary Public

44. in the execution of the duties of his office, or by any 5,000/= 10,000/=
other person lawfully acting as a Notary Public
NOTE OR MEMORANDUM - sent by a broker or

agent to his principal intimating the purchase or sale
45. 5,000/= 10,000/=
on account such principal of any goods stock or
marketable security.
46. PARTITION 10,000/=
(a) PARTNERSHIP 5,000/= 10,000/=

47.
(b) DISSOLUTION OF PARTNERSHIP. 5,000/= 10,000/=
(a) POLICY OF INSURANCE 35,000/= 35,000/=
48. (b) LIFE INSURANCE NIL NIL
(c) INSURANCE PERFORMANCE BOND 50,000/= 50,000/=
49. POWER OF ATTORNEY 5,000/= 10,000/=
50. PROMISSORY NOTE 5,000/= 10,000/=
PROTEST OF BILL OR NOTE - any declaration in

51. writing made by a Notary Public, attesting the 5,000/= 10,000/=
dishonour of a bill of exchange or promissory note.
RECEIPT - as defined by section 2 for any money or

52. other property the amount of value exceeds 10,000/=
Shs.50,000
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RECONVEYANCE OF MORTGAGED PROPERTY -

53. 5,000/= 10,000/=
of the total value.
RELEASE - Any instrument not being such a release

as is provided for by section 26(2) by which a person
54. 5,000/= 10,000/=
renounces a claim upon another person or against
any specified property
RESPONDENTIA BOND - any instrument securing a

loan on the cargo laden on board a ship and making
55. 5,000/= 10,000/=
repayment contingent on the arrival of the cargo at
the port of
SECURITY BOND OR MORTGAGE DEED -

executed by way of security for the due execution of
an office, or to account for money or other property
56. 1% 1%
received by virtue thereof or executed by surety to
secure the due performance of a contract - of the
total value
SETTLEMENT
5,000/= 10,000/=
(a) INSTRUMENT OF – (including a deed of dower)
57.
(b) REVOCATION OF – 5,000/= 10,000/=
SHARE WARRANTS - to bearer issued under the

58. 1% 1%
Companies Act - of the total value
SHIPPING ORDER - for or relating to the

59. 5,000/= 10,000/=
conveyance of goods on board any vessel
60. SOLEMN OR STATUTORY DECLARATION 5,000/= 10,000/=
61. SURRENDER TO LEASE 5,000/= 10,000/=
TRANSFER –
62. 1% 1.5%
(a) of the total value
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- 338 -
(b) transfer of shares in an incorporated company

listed on the stock exchange, arising from the 0.5 % 0.5%
trading of those shares on the stock exchange.
(c) of assets to special purpose vehicles for the

NIL NIL
purpose of issuing asset backed securities
TRUST - concerning any property made by any

63. 5,000/= 10,000/=
writing not being a will.
Any other instrument [provision] not specifically

64. 5,000/= 10,000/=
mentioned
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Tax Procedures Code Act 2014
THE TAX PROCEDURES CODE ACT,

2014
An Act to provide for a Code to regulate the procedures for the
administration of specified tax laws in Uganda; to harmonise and
consolidate the tax procedures under existing tax laws; and to provide for
related matters.
Date of Assent: 19th October, 2014

Date of Commencement: 1st July 2016
1. Commencement
2. Application
3. Interpretation
PART II - REGISTRATION OF TAXPAYERS
4. Registration
5. Tax identification number
6. Deregistration
PART III - TAX AGENTS AND TAX REPRESENTATIVES.
Registration of Tax Agents
7. Tax Agents Registration Committee

8. Tax Agents
9. Registration of tax agents
10. Renewal of registration
11. Registration of additional or substituted tax agents
12. Notice of change in registered particulars
13. Cancellation of tax agent’s registration
Tax Representatives
14. Liabilities and obligations of a tax representative
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PART IV - RECORD-KEEPING
15. Accounts and records
PART V - TAX RETURNS
16. Furnishing of tax returns

17. Certification of tax return by tax agent
18. Power of the Commissioner to require tax returns in certain cases
19. Extension of time to furnish a tax return
PART V A – TAX STAMPS
19A. Tax stamps

19B. Penal tax relating to tax stamps
PART VI - TAX ASSESSMENTS
20. Self-assessment
21. Default assessment
22. Advance assessment
23. Additional Assessment
PART VII - OBJECTIONS AND APPEALS
24. Objection to a tax decision

25. Review of an objection decision
26. Burden of proof
PART VIII - COLLECTION AND RECOVERY OF TAX
27. Payment of Tax
Tax Collection
28. Extension of time to pay tax

29. Tax as a debt due to the Government of Uganda
Enforced Tax Collection
30. Collection of tax from persons leaving Uganda permanently

31. Recovery of tax through persons owing money to the taxpayer
32. Distress proceedings
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33. Temporary closure of business

34. Charge over immovable property
35. Seizure of goods
36. Security for unpaid tax
37. Priority of withholding tax and VAT
38. Order of payment
Interest on Late Payments
39. Recovery of interest on unpaid tax
PART IX - REMISSION OF TAX
PART X - INVESTIGATIONS
41. Access to premises, records and data storage devices

PART XI - TAX CLEARANCE CERTIFICATES
43. Tax clearance certificate
PART XII - PRACTICE NOTES AND RULINGS
Practice Notes
44. Practice notes
Private Rulings
45. Private rulings
PART XIII - TAX OFFICERS
46. Delegation
47. Confidentiality
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PART XIV - PENAL TAX
Penal Tax
48. Penal tax for default in furnishing a tax return

49. Penal tax for failing to maintain proper records
49A.Penal Tax for Failure to Provide Information
50. Penal tax for making false or misleading statements
51. Penal tax for understating provisional tax estimates
52. Penalty for failing to apply for registration
PART XV - OFFENCES
54. Failing to furnish a tax return

55. Failure to comply with obligations under this Act
57. Use of false TIN
58. Making false or misleading statements
59. Obstructing a tax officer
60. Aiding or abetting a tax offence
61. Offences relating to recovery of tax
62. Offences relating to registration
63. Offences in relation to tax officers
64. Offences by bodies of persons
65. Tax officer may appear on behalf of Commissioner
66. Compounding of offences
67. Tax charged to be paid despite prosecution
PART XVI - MISCELLANEOUS
68. Validity of tax decision

69. Rectification of a mistake
70. Forms, notices, and authentication of documents
71. Approved or prescribed form
72. Manner of furnishing documents or service of notices
73. Electronic returns and notices
74. Appeal from the decision of the Committee
75. Regulations
76. Amendment of Schedules
77. Repeals
78. Transitional provisions
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SCHEDULES
SCHEDULE 1 - Currency point
SCHEDULE 2 - Tax laws
SCHEDULE 3 - Amount of turnover in respect of which audited

financial statements are required
1. Commencement
This Act shall come into force on a date appointed by the Minister, by
statutory instrument.
2. Application
This Act shall apply to every tax law specified in Schedule 2.
3. Interpretation
“additional assessment” means an additional assessment made by the

Commissioner under section 23;
“advance assessment” means an advance assessment made by the

Commissioner under section 22;
“Authority” means the Uganda Revenue Authority established by the

“business information return” means a return required to be furnished under

section 130 of the Income Tax Act;
“Commissioner” means the Commissioner-General appointed under the

“Committee” means the Tax Agents Registration Committee established

under section 7;
“currency point” has the meaning assigned to it in Schedule 1 ;

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- 344 -
“default assessment” means a default assessment made by the Commissioner

under section 21;
“due date” means the date by which a tax obligation must be fulfilled under
this Act;
“listed institution” has the meaning assigned to it in the Income Tax Act;
“Minister” means Minister responsible for Finance;
“objection decision” means a decision within the meaning of section 24;
“occupier” in relation to premises or a place means the owner, manager, or

any other person lawfully in the premises or place;
“penal tax” means a tax imposed as a penalty for failure to perform an act
required by or under a tax law;
“person” has the same meaning as in the Income Tax Act;
“record” includes –
(a) a book of account, document, paper, register, bank statement,

receipt, invoice, voucher, contract and agreement, or Customs
declaration; or
(b) any information or data stored on a mechanical or electronic data

storage device;
“registration threshold” has the meaning in section 7(2) of the Value Added
Tax Act;
“self-assessment” means an assessment treated as having been made by a

taxpayer under section 20;
“self-assessment return” means a return made in accordance with section 16

and 20;
“statutory rate”, in relation to a period, means the Bank of Uganda

discount rate at the commencement of that period;
“tax” means a tax imposed under a tax law and includes withholding tax and
provisional tax;
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“tax assessment” means a self-assessment, default assessment, advance

assessment, or additional assessment”;
“tax agent” means a person registered as a tax agent under this Act;
“tax decision” means –
(a) a tax assessment; or
(b) a decision on any matter left to the discretion, judgment, direction,

opinion, approval, satisfaction or determination of the
Commissioner, other than a decision made in relation to a tax
assessment;
“tax law” means a law specified in Schedule 2;
“tax obligation” means any duty expected of a taxpayer under a tax law and
includes registration, filing and payment of a tax liability;
“tax officer” means the Commissioner and an officer of the Authority

appointed under the Uganda Revenue Authority Act;
“taxpayer” means a person liable for tax under a tax law and includes
(a) for the income tax, a person who has zero chargeable income or an
assessed loss for a year of income; or
(b) for the VAT, a taxable person whose total input tax credits for a
tax period are equal to or exceed the person’s total output tax for
the period;
“tax period”, means –
(a) in the case of the income tax –
(i) for the purposes of withholding tax, the period to which the
withholding relates;
(ii) for the purposes of provisional tax, the period to which the
provisional tax relates; or
(iii) for any other purposes, the year of income;
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(b) in the case of VAT, the tax period under the Value Added Tax Act;
or
(c) in any other case, the period for which the tax is reported;
“tax representative” means –
(a) for an individual under a legal disability, the guardian or manager

who receives or is entitled to receive income on behalf, or for the
benefit of that natural person;
(b) for a company, the chief executive officer, managing director, or

any director of the company;
(c) for a partnership, a partner in the partnership;
(d) in the case of a trust, a trustee of the trust;
(e) in the case of the Government or local Government in Uganda, the

individual responsible for accounting for the receipt or payment of
moneys or funds on behalf of the Government or local
Government;
(f) in the case of a foreign government, political subdivision of a

foreign government, or a listed institution, any natural person
responsible for accounting for the receipt or payment of moneys or
funds in Uganda on behalf of the government, political subdivision
of the government, or listed institution; and
(g) in the case of a non-resident person, the individual controlling the

person's affairs in Uganda, including a manager of a business of
that person or any representative appointed by the person in
Uganda;
“tax return” means a return or other document listed in the Third schedule;
“transaction information” means information relating to a transaction in

respect of which a record is made;
“TIN” means a Tax Identification Number issued to a registered taxpayer;
“Tribunal” means the Tax Appeals Tribunal established by the Tax Appeals
Tribunal Act;
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“unpaid tax” means tax that has not been paid by the due date, but does not
include tax that is the subject of an objection and that is not required to be
paid until the objection is finally decided;
“VAT” means Value Added Tax; and
“withholding tax” means any tax that a withholding agent is required to

deduct from a payment to a payee.
PART II - REGISTRATION OF TAXPAYERS
4. Registration
(1) A person liable to pay tax under a tax law shall apply to the
Commissioner for registration in the prescribed manner.
(2) The application shall be accompanied by the prescribed evidence of the

person’s identity.
(3) The Commissioner shall register a person who has applied for
registration if satisfied that the person meets the requirements for
registration.
(4) Where the Commissioner refuses to register a person who has applied
for registration, the Commissioner shall serve that person with written
notice of the refusal within fourteen days after the refusal, stating the
reasons for refusal.
(5) Where a person applies for registration as required under a tax law, the
Commissioner may use the information provided for the registration for
the purposes of this Act without requiring the person to furnish the
same particulars under this Act.
(6) Despite subsection (5), the Commissioner may request a person to

provide any further information necessary to complete the registration
of the person under this Act.
5. Tax Identification Number
(1) Upon registration, the Commissioner shall issue to every person

registered a Tax Identification Number, TIN.
(2) The Commissioner shall issue one TIN to each person registered.
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(3) The TIN issued by the Commissioner shall be used for tax purposes
under all tax laws.
(4) A person shall state that person’s TIN on any return, notice,
communication, or other document furnished, lodged, or used for the
purposes of a tax law.
(5) Subject to subsection (6), a TIN is personal to the person to whom it has
been issued and shall not be used by another person.
(6) The TIN of a registered taxpayer may be used by a registered tax agent
if:–
(a) the person has given written permission to the registered tax agent
to use the TIN on their behalf; and
(b) the registered tax agent uses the TIN only in respect of the tax
affairs of the taxpayer.
(7) The Commissioner shall by notice in writing, cancel a TIN if satisfied

that:–
(a) the person is deregistered for the purposes of all tax laws;
(b) a TIN has been issued to the person under an identity that is not
that person’s true identity; or
(c) the person has been previously issued with a TIN that is still in
force.
(8) The Commissioner may, at any time, by notice in writing, cancel the
TIN issued to a person and issue the person with a new TIN.
6. Deregistration
(1) A person who is no longer required to be registered for the purposes of a

tax law may, in the prescribed manner, apply to the Commissioner to
be deregistered.
(2) The Commissioner shall by notice in writing, deregister a person if -
(a) that person has applied for deregistration and the Commissioner is
satisfied that the person is no longer required to be registered; or
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(b) that person has not applied for deregistration but the
Commissioner is satisfied that the person is eligible for
deregistration.
(3) Deregistration takes effect from the date specified in the notice of
deregistration.
(4) A person who is deregistered shall comply with any requirements

relating to deregistration as specified under the tax law to which the
registration relates.
PART III - TAX AGENTS AND TAX REPRESENTATIVES
Registration of Tax Agents
7. Tax Agents Registration Committee
(1) There shall be a Tax Agents Registration Committee to handle

registration, renewal of registrations and cancellation of tax agent’s
registration.
(2) The Committee shall comprise of the following members –
(a) the Commissioner General, or his or her representative for

purposes of this Act, who shall be the Chairperson;
(b) one representative from the accountancy profession nominated by

the Institute of Certified Public Accountants of Uganda;
(c) a representative from the legal profession nominated by the

Uganda Law Society; and
(d) two members from the private sector with expertise or relevant
experience in economics, finance or taxation who shall be
appointed by the Board of the Uganda Revenue Authority,
(3) The Commissioner shall receive and maintain a register of all registered
tax agents.
(4) In exercise of its functions under this Act, the Committee shall make
rules to govern its own procedure.
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8. Tax Agents
(1) An individual, partnership, or company may apply to the Committee

for registration as a tax agent.
(2) An application for registration as a tax agent under subsection (1) shall
be in the prescribed form and shall be accompanied by the prescribed
fee.
(3) For purposes of this Act, a tax agent is a person engaged –
(a) in the preparation, certification, and filing tax returns, information

returns or other statements or reports required by the Authority.
(b) in the preparation of requests for ruling, petitions for

reinvestigation, protests, objections, requests for refund or tax
certificates, compromise settlements and/or abatement of tax
liabilities and other official papers and correspondences with the
Authority.
(c) in meetings and hearings on behalf of the taxpayer in all matters

relating to a taxpayer rights, privileges or liabilities under the laws
or regulations administered by the Authority.
9. Registration of Tax Agents
(1) In the case of an application by a natural person, the Committee shall

register the applicant if satisfied that the applicant is a fit and proper
person to prepare tax returns and transact business with the Committee
under the tax laws on behalf of taxpayers.
(2) In the case of an application by a partnership or a company, the

Committee shall register the applicant if satisfied that –
(a) the partner or employee specified in the application as the

nominee of the partnership or company respectively is a fit and
proper person to prepare tax returns and transact business with
the Commissioner under a tax law on behalf of a taxpayer; and
(b) a partner in the partnership or a director, manager or other

executive officer of the company is of high integrity and good
character.
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(3) An individual applying for registration as a tax agent, or in the case of

an application by a partnership or company, the partner or employee
specified as the nominee of the partnership or company respectively,
shall meet the following requirements –
(a) have been awarded a degree or a post-graduate award from an

approved tertiary institution in the discipline that is relevant for
the provision of tax agent services; or
(b) have successfully completed a course in taxation that is recognised

by the Tax Registration Committee; or
(c) in the coming into force of this Act, have been engaged in the
equivalent of 24 months of full-time tax practice in the preceding 5
years.
(4) The registration of a tax agent shall remain in force for twelve months
from the date of registration.
(5) The Commissioner shall notify the applicant of the decision on the
application.
(6) This section does not apply to an advocate acting as an advocate to a

taxpayer.
10. Renewal of Registration
(1) A tax agent may apply to the Committee for the renewal of the tax
agent’s registration.
(2) An application under subsection (1) shall be in the prescribed form and
shall be accompanied by the prescribed fee.
(3) The application shall be submitted to the Committee within twenty one
days before the date of expiry of the tax agent’s registration or a later
date allowed by the Committee.
(4) The Committee shall renew the registration of a tax agent who has
applied under subsection (1) if the tax agent still meets the requirements
for registration.
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(5) The Committee shall in writing notify the applicant of the decision on
the application to renew registration.
11. Registration of Additional or Substituted Tax Agents
(1) A partnership or company registered as a tax agent may apply to the

Committee, in the prescribed form and accompanied by the prescribed
fee, to register a partner of the partnership or an employee of the
company as an additional or substituted tax agent.
(2) The Committee shall register the person nominated under subsection (1)
if satisfied that the person is a fit and proper person to prepare tax
returns and transact business with the Committee under a tax law on
behalf of a taxpayer.
(3) The Committee shall in writing notify an applicant under this section of
the decision of the Committee on the application.
12. Notice of Change in Registered Particulars
(1) A partnership that is registered as a tax agent shall notify the

Committee, in writing, if –
(a) there is a change in the composition of the partnership, within

seven days after the change in composition; or
(b) the partnership is going to be dissolved within, seven days before

the dissolution of the partnership.
(2) A company that is registered as a tax agent shall notify the Committee,
in writing, if –
(a) a registered nominee ceases to be an employee of the company or

a person becomes a director, manager, or other executive officer
of the company, within seven days after the employee ceases to
be employed, or the person becomes a director, manager or other
executive officer; or
(b) the company is going into liquidation within seven days before
the company goes into liquidation.
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13. Cancellation of Tax Agent’s Registration
(1) A tax agent that ceases to carry on business as a tax agent shall notify
the Committee, in writing, within seven days after ceasing to carry on
business as a tax agent.
(2) A tax agent may apply to the Committee, in the prescribed form to
cancel the registration of the agent where the agent no longer wishes to
be registered as a tax agent.
(3) The Committee may cancel the registration of a tax agent if the
Committee is satisfied that –
(a) in the case of an individual, the person is no longer a fit and

proper to prepare tax returns and transact business with the
Committee under the tax laws on behalf of a taxpayer;
(b) in the case of a partnership, the additional or nominated partner

has ceased to be a partner in the partnership or the partnership
has applied to the Committee to cancel the registration of the
partner;
(c) in the case of a company, the person nominated has ceased to be

employed by the company or the company has applied to the
Committee to cancel the registration of the employee;
(d) a tax return prepared and delivered by the tax agent is false in any
material particular, unless the tax agent establishes to the
satisfaction of the Committee that it was not due to any wilful or
negligent conduct of the tax agent;
(e) the tax agent has ceased to meet the requirements for registration
as a tax agent; or
(f) the tax agent has ceased to carry on business as a tax agent.
(4) The Committee shall give notice, in writing, to a tax agent of a decision
to cancel the registration of the tax agent or a nominee of the tax agent.
(5) The cancellation shall take effect from the date specified in the notice.
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Tax Representatives
14. Liabilities and Obligations of a Tax Representative
(1) A tax representative is responsible for performing any duty or obligation

imposed by a tax law on the taxpayer, including the submission of tax
returns and payment of tax.
(2) If there are two or more tax representatives of a taxpayer, the

obligations referred to in this section apply jointly and severally to the
agents but may be discharged by any of them.
(3) A tax representative making a payment of tax on behalf of a taxpayer is

to be treated as acting under the authority of the taxpayer.
(4) A tax that, by virtue of subsection (1), is payable by the representative of

a taxpayer is recoverable from the agent only to the extent of the assets
of the taxpayer that are in the possession or under the control of the tax
representative.
(5) Subject to subsection (6), a tax agent is personally liable for the payment
of any tax due by the tax representative in that capacity if, while the
amount remains unpaid, the representative –
(a) alienates, charges, or disposes of any moneys received or accrued

in respect of which the tax is payable; or
(b) disposes of or parts with any moneys or funds belonging to the

taxpayer that are in the possession of the representative or which
come to the representative after the tax is payable, if tax could
legally have been paid from or out of the moneys or funds.
(6) A tax representative is not personally liable for tax if –
(a) the monies were paid by the representative on behalf of a

taxpayer and the amount paid has priority, in law or equity, over
the tax payable by the taxpayer; or
(b) at the time the monies were paid, the representative had no
knowledge, and could not reasonably be expected to know, of the
taxpayer’s tax or duty liability.
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(7) An amount that a tax representative is personally liable for under

subsection (5) shall be collected and recovered in accordance with this
Act.
(8) Nothing in this section relieves a taxpayer from performing any

obligation imposed on the taxpayer under a tax law that the tax
representative of the taxpayer has failed to perform.
(9) A reference in this section to a tax liability includes any interest payable
in respect of the liability.
PART IV - RECORD-KEEPING
15. Accounts and Records
(1) Subject to subsections (2) and (5), every taxpayer shall for the purposes
of a tax obligation –
(a) maintain, in the English language, records including in electronic

format, as may be required to determine the taxpayer’s tax
liability under a tax law;
(b) maintain the record so as to enable the taxpayer’s tax liability

under the tax law to be readily ascertained; and
(c) retain the record for five years after the end of the tax period to
which it relates or other period as specified in the tax law.
(2) Where, at the end of the time specified in subsection (1) (c), a record is
necessary for a proceeding commenced before the end of the five-year
period, the person shall retain the document until all proceedings have
been completed.
(3) A mode of record keeping shall contain sufficient transaction

information and, in the case of a record in electronic format shall be
capable of being retrieved and converted to a standard record format
equivalent to that contained in an acceptable paper record.
(4) The Commissioner may, on the application of a taxpayer who wishes to

keep records in a language other than English or in a currency other
than Uganda Shillings, allow the taxpayer to keep records in a different
language or currency.
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(5) An application under subsection (4) shall clearly state the reasons of the
applicant for wishing to keep records in a different language or
currency.
(6) Where a record referred to in subsection (1) is not in English, the

Commissioner may, by notice in writing, require the person keeping the
record to provide, at the person’s expense, a translation into English by
a translator approved by the Commissioner.
(7) A taxpayer granted permission to keep records in a language other than

English shall file a tax return or provide other correspondence with the
Commissioner in English.
PART V - TAX RETURNS
16. Furnishing of Tax Returns
(1) A person required to furnish a tax return under a tax law shall submit
the return in the prescribed form and in the manner determined by the
Commissioner.
(2) Where a person does not furnish a tax return under subsection (1), the
Commissioner may at the person’s cost, by notice in writing, appoint
another person to prepare and furnish the return on behalf of that
person.
(3) A return furnished under subsection (2) shall be treated, for all the
purposes of the tax law under which the return is required to be
furnished, to be the return of the person required to furnish the return.
(4) Where the Commissioner is not satisfied with a tax return furnished by
a person, other than a self-assessment return, the Commissioner may,
by notice in writing, require the person who has furnished the return to
provide a fuller or further tax return.
(5) A taxpayer with an annual turnover of the amount prescribed in

Schedule 3 shall furnish with the taxpayer’s return of income audited
financial statements prepared by an accountant registered by the
Institute of Certified Public Accountants of Uganda.
(6) A tax return purporting to be made by or on behalf of a person is treated

as having been made by the person or with the person’s authority unless
the contrary is proved.
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(7) The following are tax returns for the purposes of this Act –
(a) a return of income;
(b) a return of rental income;
(c) a provisional tax estimate;
(d) a business information return;
(e) a return required to be furnished under the Value Added Tax Act;
(f) an excise duty return;
(g) any other return required to be furnished under a tax law; and
(h) any form required to be furnished under a tax law containing

information relating to an assessment of tax.
(8) For purposes of subsection (7), the applicable time frame for lodging a
return shall be as follows -
(a) in the case of a return of income, every taxpayer shall furnish a

return of income for each year of income of the taxpayer not later
than six months after the end of that year;
(b) in the case of a return of rental income, every taxpayer shall

furnish a return of rental income for each year of income of the
taxpayer not later than six months after the end of that year;
(c) [in the case of a provisional tax estimate, every taxpayer is

required to furnish a return of provisional tax estimate] a
Substituted by provisional taxpayer’s estimate shall be in the form prescribed by
TPC (Am) Act 2017
the Commissioner and shall be furnished to the Commissioner by
the due date for the payment of the first instalment of provisional
tax for the year of income;
(d) in the case of a business information return, a person who is

required to furnish a business information return with the
commissioner should do so within sixty days after the end of the
year of income in which the payment was made;
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(e) in the case of the Value Added Tax Act, a taxable person shall
lodge a Value Added Tax return with the Commissioner General
for each tax period within fifteen days after the end of the tax
period;
(f) in the case of an Excise Duty return, a person who is required to

furnish an excise duty return with the Commissioner General
shall do so by the fifteenth day of the following month;
The Gaming and Pool

Betting Act was
(g) in the case of the Gaming and Pool Betting Act, a person who is
repealed and replaced required to furnish a return with the Commissioner shall do so in
by the Lotteries and
Gaming Act, 2016 the period specified under the Act.
(h) in case of any other return required to be furnished under a tax

law, a person is required to furnish such return with the
commissioner in the period specified under the tax law to which
the return relates;
(i) in case of any form required to be furnished under a tax law

containing information relating to an assessment of tax, a person
is required to furnish such a form with the commissioner in the
period specified by the Commissioner.
17. Certification of Tax Return by Tax Agent
(1) A tax agent who prepares or assists in the preparation of a tax return of
a taxpayer shall provide the taxpayer with a signed certificate in the
prescribed form –
(a) Stating the sources available to the tax agent for the preparation
of the return; and
(b) certifying that the tax agent has examined the documents of the
taxpayer and that, to the best of the tax agent’s knowledge, the
return together with any supporting documentation, reflects the
correct data and transactions to which it relates.
(2) A tax agent who does not provide the certificate referred to in
subsection (1) shall in writing specify to the taxpayer the reasons for not
providing the certificate.
(3) A tax agent who prepares or assists in the preparation of a tax return of
a taxpayer shall make a declaration in the taxpayer’s return stating
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whether a certificate under subsection (1) or a statement under

subsection (2) has been provided to the taxpayer.
(4) A tax agent shall when required to do so by notice in writing from the
Commissioner, produce to the Commissioner a copy of the certificate
under subsection (1) or the statement provided to the taxpayer under
subsection (2).
(5) A tax agent shall keep copies of certificates provided to taxpayers under
subsection (1) and statements provided to taxpayers under subsection
(2) for five years from the date that the tax return to which the
certificate or statement relates is furnished.
18. Power of the Commissioner to require Tax Returns in certain Cases
(1) This section applies if, during a tax period –
(a) a taxpayer has died;
(b) a taxpayer has become bankrupt, wound up, or goes into

liquidation;
(c) a taxpayer is about to leave Uganda permanently; or
(d) the Commissioner otherwise considers it appropriate.
(2) The Commissioner may, by notice in writing and at any time during the
tax period, require –
(a) the taxpayer or the taxpayer’s representative to furnish a tax

return for the tax period by the date specified in the notice being a
date that may be before the date that the return for the tax period
would otherwise be due; and
(b) the taxpayer or taxpayer’s representative to pay any tax due

under the return.
(3) Where a taxpayer is subject to more than one tax, this section applies to
each tax separately.
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19. Extension of Time to Furnish a Tax Return
(1) A person required to furnish a tax return may apply in writing to the
Commissioner for an extension of time to furnish the return.
(2) An application under subsection (1) shall be made by the date on which
the return is required to be furnished or made.
(3) Where an application has been made under subsection (1) and the
Commissioner is satisfied that the person is unable to furnish the tax
return by the due date because of any reasonable cause, the
Commissioner may, by notice in writing, grant the person an extension
of time to furnish the return.
(4) The extension of time granted under subsection (3) shall not exceed an
aggregate period of ninety days.
(5) An extension of time granted under this section does not change the
date for payment of the tax due as specified in the tax law under which
the tax return is required to be furnished and interest remains payable
on the unpaid tax from the date the tax was originally due.
(6) The commissioner may allow an application for the extension of time
after the expiry of the due date if the commissioner is satisfied that the
failure to furnish a tax return was due to exceptional circumstances.
Part V A Inserted by TPC (Am) Act 2017.
Commencement date to be appointed by Statutory PART V A - TAX STAMPS
Instrument.
19A. Tax Stamps
(1) A person dealing in goods, whether locally manufactured or imported

shall affix a tax stamp on any goods locally manufactured or imported
as prescribed by the Minister under subsection (3).
(2) The Commissioner shall prescribe the manner in which a tax stamp is
to be affixed to goods.
(3) The Minister shall prescribe, by statutory instrument, the locally

manufactured or imported goods on which tax stamps shall be affixed.
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19B. Penal Tax Relating to Tax Stamps
(1) A taxpayer who fails to affix a tax stamp on goods prescribed under
section 19A(3) is liable to pay a penal tax equivalent to double the tax
due on goods or fifty million shillings, whichever is higher.
(2) A person who prints over or defaces a tax stamp affixed on goods
prescribed under section 19A(3) is liable to pay a penal tax equivalent to
double the tax due on the goods or twenty million shillings, whichever
is higher.
(3) A person found in possession of goods prescribed under section 19A(3),

on which a tax stamp is not affixed, is liable to pay a penal tax
equivalent to double the tax due on the goods or fifty million shillings,
whichever is higher.
(4) A person who attempts to acquire or who acquires or sells a tax stamp
without the authority of the Commissioner commits an offence and is
liable on conviction, to a penalty equivalent to double the tax due on
the goods or ten million shillings, whichever is higher.
PART VI - TAX ASSESSMENTS
20. Self-Assessment
(1) A taxpayer who has submitted a self-assessment return in the prescribed

form for a tax period is treated, as having made an assessment of the
amount of tax payable, including a nil amount, for that period being the
amount set out in the return.
(2) Where a taxpayer liable to income tax has submitted a self- assessment
return in the prescribed form for a year of income and the taxpayer has
an assessed loss for the year, the taxpayer is treated, as having made an
assessment of the amount of the loss for that year being that amount set
out in the return.
(3) Where a taxable person has submitted a self-assessment return in the

prescribed form for a tax period and the taxable person has an excess
input tax credit carried forward for that tax period, the taxable person is
treated, as having made an assessment of the amount of the excess input
tax credit carried forward for that tax period being that amount set out
in the return.
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(4) Where a taxpayer electronically completes and submits a prescribed

form for a tax return that tax return is a self-assessment return despite
the form having pre-filled information provided by the Commissioner.
(5) The following are self-assessment returns for the purposes of this Act –
(a) a return of income;
(b) a return of rental income;
(c) a return required to be furnished under the Value Added Tax Act;
(d) a return required to be furnished under the Excise Duty Act;
(e) a return specified as a self-assessment return under a tax law.
21. Default Assessment
(1) Where a taxpayer fails to furnish a self-assessment return for a tax

period as required under a tax law, the Commissioner may, at any time,
make an assessment as follows –
(a) in the case of an assessed loss under the Income Tax Act, the
amount of the assessed loss of the taxpayer for the period;
(b) in the case of an excess input tax credit under the Value Added
Tax Act, the amount of the excess input tax credit of the taxpayer
for the period; or
(c) in any other case, the tax payable by the taxpayer for the tax
period.
(2) The Commissioner shall serve a taxpayer assessed under subsection (1)
with notice, in writing, of the assessment specifying –
(a) the amount of tax assessed, assessed loss, or excess input tax
credit, as the case may be;
(b) the amount of penal tax and interest, if any, payable in respect of
the amount assessed;
(c) the tax period to which the assessment relates;
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(d) the due date for payment of the tax, penal tax and interest; and
(e) the manner of objecting to the assessment.
(3) The service of a notice of an assessment under this section does not
change the due date for payment of the tax payable under the
assessment as determined under the tax law imposing the tax, and penal
tax and interest remain payable based on the original due date.
22. Advance Assessment
(1) This section applies to a taxpayer specified in section 18 and where the
Commissioner is satisfied that there is a risk that a taxpayer may delay,
obstruct, prevent, or render ineffective payment or collection of tax that
has not yet become due.
(2) Subject to subsection (3), the Commissioner may make an assessment

for a tax period in relation to a taxpayer to whom section 18 applies –
(a) in the case of an assessed loss under the Income Tax Act, of the
amount of the assessed loss of the taxpayer for the period;
(b) in the case of an excess input tax credit under the Value Added
Tax Act, of the amount of the excess input tax credit of the
taxpayer for the period; or
(c) in any other case, of the tax payable by the taxpayer for the
period.
(3) Subsection (2) applies only if the taxpayer has not submitted a return as
required by section 18.
(4) An assessment made under subsection (2) –
(a) may be made before the date on which the taxpayer’s tax return
for the period is due; and
(b) shall be made in accordance with the tax law in force at the date
the assessment was made.
(5) The Commissioner shall serve a taxpayer assessed under subsection (2)
with notice, in writing, of the assessment specifying –
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(a) the amount of tax assessed;
the tax assessed;
(d) the due date for payment of the tax, penal tax and interest; and
(6) An assessment made under subsection (2) may be amended under

section 23 so that the taxpayer is assessed in respect of the whole of the
tax period to which the assessment relates.
(7) Nothing in this section relieves a taxpayer from being required to

furnish the tax return to which the assessment served under this section
relates.
23. Additional Assessment
(1) The Commissioner may make an additional assessment amending a tax

assessment made for a tax period to ensure that –
(a) for an assessed loss under the Income Tax Act, the taxpayer is
assessed in respect of the correct amount of the assessed loss for
the period;
(b) for an excess input tax credit under the Value Added Tax Act, the
taxpayer is assessed in respect of the correct amount of the excess
input tax credit for the period; or
(c) in any other case, the taxpayer is liable for the correct amount of
tax payable in respect of the period.
(2) An additional assessment under subsection (1) may be made –
(a) at any time, if fraud or any gross or wilful neglect has been
committed by, or on behalf of the taxpayer, or new information
has been discovered in relation to the tax payable by the taxpayer
for a tax period;
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(b) in the case of an additional assessment, within three years from

the date of service of the notice of the additional assessment; or
(c) in any other case, within three years after the date –
(i) the taxpayer furnished the self-assessment return to which

the original assessment relates; or
(ii) the Commissioner served notice of the original

assessment on the taxpayer.
(3) Subject to subsection (1), a taxpayer who has furnished a self-

assessment return, other than a taxpayer whose return is being
investigated, may upon discovering an error within twelve months after
the date of furnishing the return, apply to the Commissioner for leave to
make an additional assessment.
(4) The Commissioner shall within thirty days after receiving the
application, in writing notify the taxpayer of the decision.
(5) For the purposes of subsection (2)(b) the additional assessment shall be
limited to amending the alterations and additions made in the
additional assessment.
(6) Where the Commissioner has made an additional assessment under this
section, the Commissioner shall serve the taxpayer with notice, in
writing, of the additional assessment specifying—
(a) the amount assessed as tax, assessed loss, or excess input tax
credit, as the case may be;
the amount assessed as a result of subsection (2) (a);
(d) the due date for payment of any tax, penal tax and interest being
a date that is not less than forty five days from the date of service
of the notice; and
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(7) The service of a notice of an additional assessment under this section

does not change the due date for payment of the tax payable under the
assessment as determined under the tax law imposing the tax, and penal
tax and interest shall remain payable based on the original due date.
(8) Subsection (6) shall not apply to where the circumstances leading to the
additional assessment are occasioned by an error on the part the
Commissioner.
PART VII - OBJECTIONS AND APPEALS
24. Objection to a Tax Decision
(1) A person who is dissatisfied with a tax decision may lodge an objection
with the Commissioner within forty five days after receiving notice of
the tax decision.
(2) An objection shall be in the prescribed form and shall state the grounds
upon which it is made and contain sufficient evidence to support the
objection.
(3) Where a taxpayer has lodged an objection to a tax assessment for a tax
period, the Commissioner may consider the objection if the taxpayer –
(a) has furnished the return to which the assessment relates in the
case of a default or advance assessment;
(b) has paid the tax due under the return to which the assessment
relates together with any penalty or interest due.
(4) A person may apply in writing to the Commissioner for an extension of

time to lodge an objection and the Commissioner may, if satisfied with
the grounds upon which the application is made, grant an extension for
such period as the Commissioner determines.
(5) The Commissioner may make a decision on an objection –
(a) to a tax assessment, affirming, reducing, increasing, or otherwise

varying the assessment to which the objection relates; or
(b) to any other tax decision, affirming, varying, or setting aside the
decision.
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(6) The Commissioner shall serve notice of an objection decision on the

person objecting within ninety days from the date of receipt of the
objection.
(7) Subject to subsection (9), where an objection decision has not been
served within the time specified under subsection (6), the person
objecting may, by notice in writing to the Commissioner, elect to treat
the Commissioner as having made a decision to allow the objection.
(8) Where a person makes an election under subsection (7), the person is
treated as having been served with notice of the objection decision on
the date the person’s election is lodged with the Commissioner.
(9) The time limit for making an objection decision is waived where a
review of a taxpayer’s records is necessary for settlement of the
objection and the taxpayer is notified.
(10) Where the Commissioner reviews the taxpayer records under

subsection (9), the Commissioner shall within the time specified in
subsection (6) notify the taxpayer of the review.
25. Review of an Objection Decision
(1) A person dissatisfied with an objection decision may, within 30 days

after being served with a notice of the objection decision, lodge an
application with the Tax Appeals Tribunal for review of the objection
decision.
(2) A person dissatisfied with a decision of the Tribunal may, within 30

days after being served with a notice of the decision, lodge an
application with the High Court for review of the decision.
26. Burden of Proof
In any proceeding under this Act –
(a) for a tax assessment, the burden is on the taxpayer to prove that the
assessment is incorrect; or
(b) for any other tax decision, the burden is on the person objecting to the
decision to prove that the decision should not have been made or
should have been made differently.
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PART VIII - COLLECTION AND RECOVERY OF TAX
Tax Collection
27. Payment of Tax
(1) The tax owing by a taxpayer for a tax period is payable on the date
specified in the tax law under which the tax is payable.
(2) An amount that is treated as tax for the purposes of this Act shall be
collected by the Commissioner serving a notice of demand on the
person liable for the amount.
(3) The amount is payable on the date specified in the notice being a date
that is not less than twenty eight days from the date of service of the
notice.
(4) The Commissioner may waive the amount or accept a lesser amount
than is required to be paid under section 24 (3) where an objection has
reasonably been made to a tax assessment.
28. Extension of Time to Pay Tax
(1) A taxpayer may apply, in writing, to the Commissioner for an extension

of time within which to pay tax that is due.
(2) An application for an extension of time to pay tax shall be made by the
due date for payment of the tax to which the application refers.
(3) Where an application has been made under this section, the
Commissioner may, having regard to the circumstances of the case and
by notice in writing –
(a) grant the taxpayer an extension of time for payment of the tax; or
(b) require the taxpayer to pay the tax in such instalments as the
Commissioner may determine.
(4) Where tax is permitted to be paid by instalments and there is default in

payment of any instalment, the whole balance of the outstanding tax
becomes payable immediately.
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(5) Despite the grant of an extension of time or permission to pay tax by

instalments, the liability for interest arises from the original due date for
payment of the tax.
29. Tax as a Debt Due to the Government of Uganda
(1) Tax payable under a tax law is a debt due to the Government of
Uganda and is payable to the Commissioner in the manner and at the
place determined by the Commissioner.
(2) The Commissioner may sue for and recover unpaid tax in a court of
competent jurisdiction in Uganda.
(3) In any suit under this section, the production of a certificate signed by
the Commissioner stating the name and address of the taxpayer and the
amount of tax payable is conclusive evidence of the amount of tax
payable by the taxpayer unless the contrary is proved.
Enforced Tax Collection
30. Collection of Tax from Persons leaving Uganda Permanently
(1) If the Commissioner has reasonable grounds to believe that a taxpayer

may leave Uganda permanently without paying tax that is due, the
Commissioner may issue a certificate containing particulars of the tax
payable to the officer responsible for immigration control and request
the Commissioner for Immigration to prevent that person from leaving
Uganda until that person –
(a) makes payment of the tax in full; or
(b) executes a financial bond guaranteeing payment of the tax.
(2) A copy of a certificate issued under subsection (1) shall be served on the
taxpayer named in the certificate if it is practicable to do so.
(3) Payment of the tax specified in the certificate to a customs or

immigration officer or the production of a certificate signed by the
Commissioner stating that the tax has been paid or secured is sufficient
authority for allowing the taxpayer to leave Uganda.
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31. Recovery of Tax through Persons Owing Money to the Taxpayer
(1) This section applies where a person is, or will become liable to pay tax
and –
(a) the tax is unpaid; or
(b) the Commissioner has reasonable grounds to believe that the

taxpayer will not pay the tax by the due date for payment.
(2) Where this section applies to a taxpayer, the Commissioner may, by

notice in writing, require a person who –
(a) owes or may subsequently owe money to the taxpayer;
(b) holds or may subsequently hold money, for or on account of, the
taxpayer;
(c) holds money on account of some other person for payment to the
taxpayer; or
(d) has authority from some other person to pay money to the
taxpayer,
to pay the amount specified in the notice to the Commissioner, being an

amount that shall not exceed the amount of the unpaid tax or the
amount that the Commissioner believes will not be paid by the taxpayer
by the due date.
(3) A person to whom a notice is served under subsection (2) shall pay the
amount specified in the notice under subsection (2) by the date specified
in the notice, being a date that is not before the date that the amount
owed by the payer to the taxpayer becomes due to the taxpayer or held
on the taxpayer’s behalf.
(4) If a notice served under subsection (2) requires a person to deduct

amounts from salary, wages, or other similar remuneration payable at
fixed intervals to the taxpayer, the amount required to be deducted by
the person from each payment shall not exceed twenty percent of the
amount of each payment of the pension, salary, wages, or other
remuneration.
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(5) Where a person served with a notice under subsection (2) is unable to
comply with the notice by reason of lack of moneys owing to, or held
for the taxpayer, the person shall, as soon as is practicable and in any
case before the payment date specified in the notice, notify the
Commissioner accordingly.
(6) If a notice is served on the Commissioner under subsection (5), the

Commissioner shall, by notice in writing –
(a) accept the notification and cancel or amend the notice issued
under subsection (2); or
(b) reject the notification.
(7) The Commissioner shall, by notice in writing to a person under this

section, revoke or amend a notice served under subsection (2) if the
taxpayer has paid the whole or part of the tax payable or has made an
arrangement satisfactory to the Commissioner for payment of the tax.
(8) A copy of a notice served on a person under this section shall also be
served on the taxpayer.
(9) A person making a payment in accordance with a notice under

subsection (2) is treated as acting under the authority of the taxpayer
and of all other persons concerned and is indemnified in respect of the
payment despite any provisions to the contrary in any written law,
contract, or agreement.
(10) The Commissioner must credit any amount paid by a person under this
section against the tax owing by the taxpayer.
(11) A person who does not comply with a notice issued under this section is
personally liable for the amount specified in the notice which shall be
treated and collected as unpaid tax under this Act.
32. Distress Proceedings
(1) The Commissioner or an officer authorised by the Commissioner in

writing may issue an order, in writing, for the recovery of unpaid tax by
distress and sale of the movable property of a taxpayer.
(2) An order issued under subsection (1) shall specify –
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(a) the taxpayer against whose property the order is issued;
(b) the amount of the unpaid tax liability;
(c) the property against which distress is to be executed and location

of the property; and
(d) the tax liability to which the order relates.
(3) For the purposes of executing distress under subsection (1), the
Commissioner or an officer authorised by the Commissioner may –
(a) at any time, enter any premises described in the order for distress
proceedings; and
(b) require a police officer to be present while the distress is being

executed.
(4) Any property subject to distress proceedings under this section shall
be –
(a) identified by the attaching of a notice stating:
“Property Impounded For Not Complying With Tax Obligations By

Order Of the Commissioner General of the Uganda Revenue
Authority under Section 34 of the Tax Procedures Code Act” and
(b) kept at the premises where the distress is executed or at any other
place that the Commissioner or authorised officer may consider
appropriate, at the cost of the taxpayer.
(5) If the taxpayer does not pay the tax due and specified in the order under
subsection (1), together with the costs of the distress –
(a) in the case of perishable goods, within a period that the

Commissioner or authorised officer considers reasonable having
regard to the condition of the goods; or
(b) in any other case, within ten days after the distress is executed,
the property subject to the distress proceedings may be disposed of by

sale by public auction or in such other manner as the Commissioner or
authorised officer may direct.
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(6) The proceeds of a disposal under subsection (5) shall be applied by the
Commissioner in the following order –
(a) towards the cost of taking, keeping, and selling the property
subject to distress proceedings;
(b) towards the payment of any tax, penalty, or interest owing by the
taxpayer; and
(c) the remainder of the proceeds, if any, are to be paid to the

taxpayer.
(7) Where the proceeds of disposal are less than the sum of the costs of the
distress and the tax payable, the Commissioner or authorised officer
may recover the shortfall in accordance with this Part.
33. Temporary Closure of Business
(1) The Commissioner or an officer authorised in writing by the

Commissioner for the purposes of this section may notify a person in
writing of the intention to close down part or the whole of the person’s
business premises for default in paying a tax that is due and payable,
within seven days from the date of the notice.
(2) Where a taxpayer does not pay the tax due after service of a notice
under subsection (1), the Commissioner or authorised officer may issue
an order to close down part or the whole of the business premises of the
taxpayer for a period not exceeding fourteen days.
(3) The Commissioner or authorised officer may, at any time, enter any
premises described in an order issued under subsection (2) for the
purposes of executing the order and may require a police officer to be
present while the order is being executed.
(4) The Commissioner or an authorised officer shall affix in a conspicuous

place at any entrance to the premises that have been closed in
accordance with an order issued under subsection (2), a notice in the
following words: –
“Temporarily Closed For Failure to Comply With a Tax Obligation”
(5) If the tax due is satisfied during the period of closure, the Commissioner
shall immediately remove the notice referred to in subsection (4).
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34. Charge over Immovable Property
(1) If a taxpayer who is the owner of land or a building in Uganda does not
pay tax by the due date, the Commissioner may, by notice in writing, to
the Registrar of Titles direct the Registrar that the land or buildings in
the notice are the subject of a security for unpaid tax.
(2) The Commissioner shall serve a copy of the notice on the taxpayer.
(3) Upon receipt of the notice under subsection (1), the Registrar shall,
without fee, register the directive as if it were an instrument of mortgage
or charge on the land or building and that registration, subject to any
prior mortgage or charge, operates in all respects as a legal mortgage or
charge on that land or building to secure the amount of the unpaid tax.
(4) Where a taxpayer does not pay the tax due within twelve months after
receiving the copy of the notice under subsection (2) the Commissioner
may commence distress proceedings against the land or building of the
taxpayer.
(5) Upon receipt of the full amount of tax secured under this section, the
Commissioner shall notify the Registrar to cancel the entry made under
subsection (3) and the Registrar shall, without fee, cancel the entry.
(6) This section does not preclude the Commissioner from registering a
caveat on the land or building as an interim measure to stop the transfer
of the land or building.
35. Seizure of Goods
(1) The Commissioner or a tax officer authorised in writing by the

Commissioner may seize any goods in respect of which there are
reasonable grounds to believe that the tax payable in respect of the
supply, removal or import of the goods has not been paid.
(2) Goods seized under subsection (1) shall be stored in a place approved
by the Commissioner or authorised officer for the storage of seized
goods.
(3) Upon seizing the goods, the person seizing the goods shall obtain a
written statement from the owner or the person who has custody or
control of the goods at the time of the seizure, specifying the quantity
and quality of the goods.
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(4) Subject to subsection (5), where goods are seized under this section, the
Commissioner or authorised officer shall, within ten days after the
seizure, serve on the owner of the goods or the person who has custody
or control of the goods immediately before the seizure, a notice –
(a) identifying the goods;
(b) stating that the goods have been seized under this section and the
reason for the seizure; and
(c) setting out the terms for the release or disposal of the goods.
(5) Where after making reasonable enquiries, the Commissioner does not
have sufficient information to identify the person on whom a notice
under subsection (4) should be served, the Commissioner or authorised
officer may serve the notice on a person claiming the goods, but that
person must give sufficient information to enable the notice to be
served.
(6) The Commissioner or authorised officer may authorise the release of

any goods seized under subsection (1) to the person on whom a notice
under subsection (4) has been served where that person has paid, or
gives security for the payment of the tax assessed as payable or the tax
that will become payable in respect of the supply, removal, or import of
the goods.
(7) If the proceeds of disposal are less than the sum of the costs of the
seizure and the tax payable, the Commissioner or authorised officer
may recover the shortfall in accordance with this Part.
(8) Subject to subsection (6), the Commissioner shall retain the goods
seized under subsection (1) –
(a) in the case of perishable goods, for a period that the

Commissioner or authorised officer considers reasonable having
regard to the condition of the goods; or
(b) in any other case, until the later of –
(i) ten days after the seizure of the goods; or
(ii) ten days after the date on which payment of the tax is due
in respect of the supply, or import of the goods.
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(9) Upon expiry of the period specified in subsection (8), the Commissioner
or an authorized officer may sell the goods in the manner specified in
section 32(5) and apply the proceeds of sale as set out in section 32(6).
36. Security for Unpaid Tax
The Commissioner may require a taxpayer, by notice in writing, to give

security by bond, deposit, or otherwise satisfactory to the Commissioner, for
the payment of tax that may become payable, if there is reason to believe
that:–
(a) a taxpayer establishing a business in Uganda intends to carry on the

business for a limited time only; or
(b) a taxpayer may not pay tax when it becomes payable.
37. Priority of Withholding Tax and VAT
(1) The following amounts are held in trust for the Government by the
person receiving or withholding the amount –
(a) if the person is a taxable person under the Value Added Tax Act,
the VAT on taxable supplies made by the person, net of any input
tax credit allowed; and
(b) withholding tax.
(2) Despite any other enactment, withholding tax withheld or deducted by

a person –
(a) shall not be subject to attachment in respect of any debt or

liability of the person;
(b) is a first charge on the payment or amount from which the tax is
withheld or deducted; and
(c) shall be withheld or deducted prior to any other deduction that

the person may be required to make from the payment or amount
under an order of any court or any other law.
(3) Where the Commissioner is satisfied that tax has been overpaid, the
Commissioner shall –
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(a) apply the excess in reduction of any other tax due from the
taxpayer;
(b) apply the balance of the excess, if any, in reduction of any

outstanding liability of the taxpayer to pay other taxes not in
dispute or to make provisional tax payments during the year of
income in which the refund is to be made; and
(c) refund the remainder, if any, to the taxpayer.
38. Order of Payment
(1) When a taxpayer is liable for penal tax and interest in relation to a tax
liability and the taxpayer makes a payment that is less than the total
amount of tax, penal tax, and interest due, the amount paid is applied in
the following order –
Substituted by TPC
(Am) Act 2017 (a) in payment of the principal tax [liability];
(b) in payment of penal tax; and
(c) the balance remaining is applied against the interest due.
(2) If a taxpayer has more than one tax liability at the time a payment is
made, subsection (1) applies to the earliest liability first.
Interest on Late Payments
39. Recovery of Interest on Unpaid Tax
(1) Interest payable on unpaid tax under a tax law shall be collected by the
Commissioner in accordance with this Act as if it were unpaid tax.
(2) Interest paid by a person under subsection (1) shall be refunded to the
person to the extent that the principal amount to which the interest
relates is found not to have been payable.
(3) Interest payable by a person –
(a) in respect of withholding tax payable by the person; or
(b) in respect of an amount referred to in section 14(7) or 31 which is

payable by the person,
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is borne personally by the person and is not recoverable from any other
person.
PART IX - REMISSION OF TAX
(1) Where the Commissioner is of the opinion that the whole or any part of
the tax payable under a tax law by a taxpayer cannot be effectively
recovered by reason of hardship, impossibility, undue difficulty or the
excessive cost of recovery, the Commissioner may refer the taxpayer’s
case to the Minister.
(2) Where a taxpayer’s case is referred to the Minister under subsection (1)
and the Minister is satisfied that the tax due cannot be effectively
recovered, the Minister may remit in whole or part the tax payable by
the taxpayer.
(3) For the purposes of this section “tax” includes interest and penal tax.
PART X - INVESTIGATIONS
41. Access to Premises, Records and Data Storage Devices
(1) For the purposes of administering any provision of a tax law, the
Commissioner –
(a) shall have at all times and without prior notice, full and free
access to –
(i) any premises or place;
(ii) any record, including a record in electronic format; or
(iii) any data storage device;
(b) may make an extract or copy from any record, including a record
in electronic format, of any information relevant to a tax
obligation;
(c) may seize any record that, in the opinion of the Commissioner,
affords evidence which may be material in determining the
correct tax liability of any person;
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(d) may seize a data storage device that may contain data relevant to
a tax obligation; and
(e) may retain any record or data storage device seized under this
section for as long as it is required for determining a taxpayer’s
tax obligation and liability, including any proceedings under this
Act.
(2) The Commissioner may require a police officer to be present for the
purposes of exercising powers under this section.
(3) The occupier of the premises or place in which an exercise of power

under subsection (1) relates shall provide all reasonable assistance and
facilities necessary for the effective exercise of the power including –
(a) answering questions relating to the investigation to which the

exercise of power relates orally or in writing; or
(b) providing access to decryption information necessary to decrypt

data to which access is sought under this section.
(4) A person whose records or data storage device have been seized and
retained under this section may access and examine them, including
making copies or extracts from them under supervision as the
Commissioner may determine.
(5) The Commissioner shall sign for all records or data storage devices
seized and retained under this section.
(6) Where any record or data storage device seized and retained under this
section is lost or destroyed while in the possession of the Commissioner,
the Commissioner shall appropriately compensate the owner for the
loss or destruction.
(7) This section has effect despite –
(a) any law relating to privilege or the public interest with respect to
access to premises or places, or the production of any property or
record, including in electronic format; or
(b) any contractual duty of confidentiality.
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42. Notice to Obtain Information or Evidence
(1) The Commissioner may, for the purpose of administering any provision
of a tax law, require any person, by notice in writing, whether or not
liable for tax –
(a) to furnish, within the time specified in the notice, any

information that may be stated in the notice; or
(b) to attend at the time and place designated in the notice for the
purpose of being examined by the Commissioner concerning the
tax affairs of that person or any other person, and for that
purpose the Commissioner may require the person to produce
any record, including an electronic format, in the control of the
person.
(2) If a notice under subsection (1) is unable to be served on a person in

accordance with section 48, the notice may be published in any widely
circulated newspaper in Uganda and publication in such newspaper is
treated as service for the purposes of this section.
(3) The Commissioner may require the information referred to in

subsection (1) to be –
(a) given on oath and, for that purpose, the Commissioner may
administer the oath; or
(b) verified by statutory declaration or otherwise.
(4) This section has effect despite –
(a) any law relating to privilege or the public interest with respect to
access to premises or places, or the production of any property or
record, including in electronic format; or
(b) any contractual duty of confidentiality.
PART XI - TAX CLEARANCE CERTIFICATES
43. Tax Clearance Certificate
(1) A taxpayer providing a passenger transport service; or a freight

transport service with a goods vehicle with a capacity of two tonnes or
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more, shall if required by the Transport licensing Board, obtain a tax

clearance certificate from the Commissioner as proof of compliance
with the taxpayer’s obligations.
(2) A taxpayer providing ware housing or clearing and forwarding services

shall obtain a tax clearance certificate from the Commissioner as proof
of compliance with the taxpayer’s obligations.
(3) A taxpayer supplying goods or services to the Government shall obtain

a tax clearance certificate from the Commissioner as proof of
compliance with the taxpayer’s tax obligations.
(4) Any person who requires a tax clearance certificate shall apply to the
Commissioner for the certificate as proof of tax compliance.
PART XII - PRACTICE NOTES AND RULINGS
Practice Notes
44. Practice Notes
(1) The Commissioner may issue practice notes setting out the
Commissioner’s understanding of the application of a provision in a tax
law.
(2) The Commissioner shall issue a practice note by publishing a notice of

the practice note in the Gazette.
(3) A practice note issued under this Act is binding on the Commissioner
until it is revoked by the Commissioner.
(4) A practice note applies from the date specified in the notice and if no
date is specified, from the date of publication in the Gazette.
(5) The Commissioner may revoke a practice note, in whole or part, by

publishing a notice of the revocation in the Gazette or in any widely
circulated newspaper.
(6) A practice note that has been revoked in whole or in part shall -
(a) continue to apply to a transaction commenced before the practice

note is revoked; and
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(b) not apply to a transaction commenced after the practice note is

revoked to the extent that the practice note is revoked.
Private Rulings
45. Private Rulings
(1) Subject to subsection (2), the Commissioner may, upon application in

writing by a taxpayer, issue to the taxpayer a private ruling setting out
the position of the Commissioner regarding the application of a
provision in a tax law to a transaction entered into or proposed to be
entered into by the taxpayer.
(2) The Commissioner may reject an application for a private ruling if–
(a) the Commissioner has already decided the matter that is the
subject of the application in a tax assessment;
(b) the Commissioner is of the opinion that an existing practice note

adequately covers the matter that is the subject of the application;
(c) the application relates to a matter that is the subject of a tax audit
or an objection;
(d) the application is frivolous or vexatious;
(e) the transaction to which the application relates has not been
carried out and there are reasonable grounds to believe that it will
not be carried out;
(f) the applicant has not provided the Commissioner with sufficient
information to make a private ruling; or
(g) in the opinion of the Commissioner, it would be unreasonable to

comply with the application having regard to the resources
needed to comply.
(3) Where a taxpayer has made a full and true disclosure of the nature of all
aspects of the transaction relevant to the ruling and the transaction has
proceeded in all material respects as described in the taxpayer’s
application for the ruling, the ruling is binding on the Commissioner in
relation to the taxpayer to whom the ruling has been issued.
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(4) A private ruling is not binding on the taxpayer to whom it is issued.
(5) Where a private ruling is inconsistent with an existing practice note, the
private ruling has priority to the extent of the inconsistency.
(6) Where the Commissioner rejects an application for a private ruling, the
Commissioner shall notify the taxpayer in writing.
(7) A private ruling is issued by serving a written notice of the ruling on the
applicant and the ruling shall set out the matter ruled on, identifying –
(a) the taxpayer;
(b) the tax law relevant to the ruling;
(c) the tax period to which the ruling applies;
(d) the transaction to which the ruling relates; and
(e) any assumptions on which the ruling is based.
(8) The Commissioner may revoke a private ruling in whole or in part by

written notice served on the taxpayer to whom the ruling is issued.
(9) A private ruling is not a tax decision for the purposes of this Act.
PART XIII - TAX OFFICERS
46. Delegation
(1) Subject to this Act, the Commissioner may, by written instrument,

delegate to a tax officer, an accounting officer of a local government or
Kampala Capital City Authority any duty, power, or function conferred
or imposed on the Commissioner under a tax law, other than the power
to compound offences under section 66 and the power to delegate
conferred by this section.
(2) A reference in a tax law to the Commissioner includes, in respect of the

exercise of a power or performance of a function delegated to a tax
officer, a reference to the tax officer.
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(3) A delegation under this section is revocable at will and does not prevent
the exercise of a power or performance of a function by the
Commissioner.
47. Confidentiality
(1) A tax officer shall regard as secret and confidential all information and
documents received in performance of duties as a tax officer.
(2) A person appointed under, or employed in carrying out the provisions

of a tax law shall not disclose any information or produce any
document which has come into the person’s possession or knowledge in
connection with the performance of duties under a tax law except as
may be necessary for the purpose of giving effect to the provisions of a
tax law.
(3) Nothing in this section prevents the disclosure of information or any

document to –
(a) a court or the Tribunal where the disclosure is required for the
purposes of a tax law;
(b) the Minister or any other person if the disclosure is necessary for
the purposes of a tax law;
(c) a person in the service of the Government in a revenue or

statistical department if such disclosure is necessary for the
performance of the person’s official duties;
(d) the Auditor-General or any person authorised by the Auditor-

General if disclosure is necessary for the performance of official
duties; or
(e) the competent authority of the government of another country

with which Uganda has entered into an agreement for the
avoidance of double taxation or for the exchange of information,
to the extent permitted under that agreement.
(4) A person receiving documents and information under subsection (2) or

(3) is required to keep them secret under the provisions of this section,
except to the minimum extent necessary to achieve the purpose for
which the disclosure is necessary.
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(5) Documents and information obtained by the Commissioner in the

performance of the Commissioner’s duties and powers under a tax law
may be used by the Commissioner for the purposes of any other tax
law.
(6) This section shall continue to apply to a former tax officer or person
formerly appointed or employed under a tax law as it applies to a tax
officer.
PART XIV - PENAL TAX
Penal Tax
48. Penal Tax for Default in Furnishing a Tax Return
A person who fails to furnish a tax return by the due date, or within a further
time allowed by the Commissioner under this Act is liable to pay a penal tax
equal to 2 percent of the tax payable under the return before subtracting any
credit allowed to the taxpayer on his or her tax return or ten currency points
per month, whichever is higher, for the period the return is outstanding.
49. Penal Tax for Failing to Maintain Proper Records
A person who deliberately fails to maintain proper records as required under

a tax law for a tax period is liable to pay a penal tax equal to double the
amount of tax payable by the person for the period to which the failure
relates.
Inserted by
49A. Penal Tax for Failure to Provide Information TPC (Am) Act 2017
(1) A person who, upon request by the Commissioner, fails to provide

records in respect of transfer pricing within 30 days after the request, is
liable to a penal tax equivalent to fifty million shillings.
(2) A person who fails to provide information other than information

referred to in subsection (1), to the Commissioner upon request is liable
to a penal tax of twenty million shillings.
50. Penal Tax for Making False or Misleading Statements
Where a person knowingly or recklessly –
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(a) makes a statement to an officer of the Uganda Revenue Authority that

is false or misleading in a material particular; or
(b) omits from a statement made to an officer of the Uganda Revenue

Authority any matter or thing without which the statement is
misleading in a material particular, and the tax properly payable by
the person exceeds the tax that was assessed as payable based on the
false or misleading statement or omission, that person is liable to pay a
penal tax equal to double the amount of the excess.
51. Penal Tax for Understating Provisional Tax Estimates
(1) A provisional taxpayer, whose estimate or revised estimate of

chargeable income for a year of income is less than ninety percent of the
taxpayer’s actual chargeable income assessed for that year, is liable to
penal tax equal to twenty percent of the difference between the tax
calculated in respect of the taxpayer’s estimate, or as revised, of
chargeable income and the tax calculated in respect of ninety percent of
the taxpayer’s actual chargeable income for the year of income.
(1) A provisional taxpayer whose estimate or revised estimate of gross

turnover for a year of income is less than ninety percent of the
taxpayer’s actual gross turnover for that year is liable to penal tax equal
to twenty percent of the difference between the tax calculated in respect
of the taxpayer’s estimate, or as revised, of gross turnover and the tax
calculated in respect of ninety percent of the taxpayer’s actual gross
turnover for the year of income.
(2) This section does not apply to a taxpayer who is in the business of
agricultural, plantation, or horticultural farming.
52. Penalty for Failing to Apply for Registration
(1) A person who does not apply for registration as required under a tax
law is liable to a default penalty equal to the higher of –
(a) double the amount of tax payable during the period commencing
on the last day of the application period until the person files an
application for registration with the Commissioner or the
Commissioner registers the person on the Commissioner’s own
motion; or
(b) fifty currency points.
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(2) The penalty imposed under this section shall be recovered and collected
by the Commissioner as if it were unpaid tax.
(1) Liability for penal tax is calculated separately in respect of each section
dealing with penal tax.
(2) A person is liable for penal tax if the Commissioner serves notice on the
person of a demand for the penal tax setting out the amount of penal
tax payable and the due date for payment being a date that is not less
than twenty eight days from the date of service of the notice.
(3) Penal tax shall not be imposed on a person for an act or omission if the
person has been convicted of an offence for the same act or omission.
(4) Where penal tax has been paid and criminal proceedings are instituted
in respect of the same act or omission, the Commissioner shall refund
the amount of penal tax paid.
(5) Where good cause is shown, in writing, by the person liable to pay
penal tax, the Minister may, on the advice of the Commissioner, remit
in whole or part, any penal tax payable.
(6) Penal tax is treated as unpaid tax for the purposes of this Act and shall
be recovered and collected as unpaid tax.
PART XV - OFFENCES
54. Failing to Furnish a Tax Return
(1) A person who does not furnish a tax return by the due date, or within
such further time as the Commissioner may allow, commits an offence
and is liable on conviction to a fine not exceeding twenty five currency
points.
(2) Where a person convicted of an offence under subsection (1) fails to

furnish the return to which the offence relates within the period
specified by the court, the person commits another offence and is liable
on conviction to a fine not exceeding fifty currency points.
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55. Failure to Comply with Obligations under this Act
(1) A person who does not –
(a) comply with a notice served on the person under section 31;
(b) comply with a notice served on the person under section 18(2);
(c) provide reasonable facilities and assistance as required under

section 41;
(d) comply with a notice served on the person under section 42;
(e) get a tax clearance certificate prior to performing an act specified

in section 43; or
(f) comply with sections 11, 13, 47 or 72,
commits an offence and is liable on conviction to a fine not exceeding

twenty-five currency points.
(2) A person who notifies the Commissioner in writing under section 31(5)
is considered to be in compliance with any notice served on the person
under section 31(2) until the Commissioner serves the person with a
notice under section 31(6) amending the notice served under section
31(2) or rejecting the person’s notice under section 31(5).
56. Failure to Maintain Proper Records
A taxpayer who knowingly or recklessly does not maintain records as

required under a tax law commits an offence and is liable on conviction
to a fine not exceeding forty eight currency points or to imprisonment
not exceeding two years or both.
57. Use of false TIN
(1) A person who knowingly or recklessly uses a false TIN on a tax return
or other document prescribed or used for the purposes of a tax law
twenty four currency points or to imprisonment not exceeding one year
or both.
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(2) A person who uses a TIN of another person is treated as having used a
false TIN, unless the TIN has been used in the circumstances specified
in section 5(6).
58. Making False or Misleading Statements
(1) A person who knowingly or recklessly –
(a) makes a statement to a tax officer that is false or misleading in a

material particular; or
(b) omits from a statement made to a tax officer any matter or thing
without which the statement is false or misleading in a material
particular,

forty eight currency points or to imprisonment not exceeding two years
or both.
(2) Section 50 applies in determining whether a person has made a

statement to a tax officer.
59. Obstructing a Tax Officer
A person who obstructs a tax officer in the performance of duties under a tax
law commits an offence and is liable on conviction to a fine not exceeding
forty eight currency points or to imprisonment not exceeding two years or
both.
60. Aiding or Abetting a Tax Offence
A person who aids, abets, counsels, or induces another person to commit an

offence under a tax law, commits an offence and is liable on conviction for
the same punishment as imposed for the principal offender.
61. Offences Relating to Recovery of Tax
A person who –
(a) rescues any goods that are the subject of an order under section 32 that
are in premises which are the subject of an order under section 33, or
that have been seized under section 35;
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(b) before, during, or after any distress proceedings under section 32 or

seizure of goods under section 35, staves, breaks or destroys any goods,
or documents relating to any goods, to prevent –
(i) the seizure or the securing of the goods; or
(ii) the proof of an offence; or
(c) enters premises which are the subject of an order under section 33
without the permission of the Commissioner,
commits an offence and is liable on conviction to a fine not exceeding forty

eight currency points or imprisonment not exceeding two years.
62. Offences Relating to Registration
A person who –
(a) does not apply for registration as required under a tax law;
(b) does not notify the Commissioner of a change in registration particulars

or circumstances as required under a tax law; or
(c) does not apply for cancellation of registration as required under a tax
law,
commits an offence and is liable on conviction –
(i) if the failure or act is done knowingly or recklessly, to a fine not

exceeding fifty currency points or imprisonment not exceeding two
years or both; or
(ii) in any other case, a fine not exceeding twenty five currency points
or imprisonment not exceeding one year or both.
63. Offences in Relation to Tax Officers
(1) A tax officer who –
(a) directly or indirectly asks for, or takes in connection with any of

the officer’s duties, a payment or reward, whether pecuniary or
otherwise, or a promise or security for any payment or reward,
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not being a payment or reward which the officer is lawfully

entitled to receive; or
(b) enters into or acquiesces in any agreement to do any act or thing,

abstain from doing any act or thing, permit or connive in the
doing of any act or thing, or conceal any act or thing whereby the
tax revenue is or may be defrauded or which is contrary to the
provisions of a tax law or to the proper execution of the officer’s
duty,

forty eight currency points or imprisonment not exceeding two years,
or both.
(2) A person who –
(a) directly or indirectly offers or gives to a tax officer any payment

or reward, whether pecuniary or otherwise, or any promise or
security for any such payment or reward, not being a payment or
reward which the officer is lawfully entitled to receive; or
(b) proposes or enters into any agreement with a tax officer in order
to induce the officer to do any act or thing, abstain from doing
any act or thing, connive at the doing of any act or thing, or
concealing any act or thing by which tax revenue is or may be
defrauded or which is contrary to the provisions of a tax law or to
the proper execution of the officer’s duty,

forty eight currency points or imprisonment not exceeding two years,
or both.
(3) A tax officer who commits an act specified in subsection (1) and who
volunteers information to the Commissioner relating to that act is –
(a) exonerated from prosecution; but
(b) is liable for twenty percent of the fine that would be imposed on a
person convicted of an offence under subsection (1).
(4) A person who commits an act specified in subsection (2), and who
volunteers information to the Commissioner relating to that act is –
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(a) exonerated from prosecution; but
(b) is liable for the amount of tax unpaid as a result of the agreement
with the tax officer referred to subsection (2).
(5) A tax officer convicted of an offence under subsection (1) is, in addition
to any punishment imposed under that subsection, liable for the amount
of tax unpaid as a result of the agreement with the tax officer referred to
subsection (2).
(6) A person who impersonates a tax officer commits an offence and is

liable on conviction to a fine not exceeding fifty currency points or
imprisonment not exceeding two years or both.
64. Offences by Bodies of Persons
(1) When an offence under a tax law is committed by a company, the

offence is treated as having been committed by a person who, at the
time the offence is committed, is:–
(a) the chief executive officer, managing director, a director,

company secretary, treasurer, or other similar officer of the
company; or
(b) acting or purporting to act in that capacity.
(2) Where an offence under a tax law is committed by a partnership, every

partner at the time of the commission of the offence is treated as having
committed the offence.
(3) This section does not apply to a person if –
(a) the offence is committed without the consent or knowledge of a

person specified under subsection (1), (2), or (3); and
(b) the person specified under subsection (1), (2), or (3) has exercised
all diligence to prevent the commission of the offence as ought
to have been exercised having regard to the nature of the
representative’s functions and all other circumstances.
(4) When an offence under a tax law is committed by an unincorporated

association or body of persons, the offence is treated as having been
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committed by a person who, at the time the offence was committed,

was:–
(a) involved in the management of the unincorporated association or

body of persons; or
(b) acting or purporting to act in that capacity.
65. Tax Officer may appear on behalf of Commissioner
(1) Notwithstanding anything in any written law, a tax officer duly

authorised in writing by the Commissioner may appear in any court on
behalf of the Commissioner in any civil proceedings in which the
Commissioner is a party.
(2) Notwithstanding anything in any written law, a tax officer duly

authorised in writing by the Commissioner may conduct any
prosecution for an offence under this Act and for that purpose, the
officer has all the powers of a public prosecutor appointed under section
42 of the Magistrates Courts’ Act subject to the powers of Director of
Public Prosecutions under article 120 of the Constitution.
66. Compounding of Offences
(1) If a person has committed an offence under a tax law, other than under
section 63, the Commissioner may, at any time prior to the
commencement of court proceedings, enter into an agreement with the
offender to compound the offence if the offender agrees to pay to the
Commissioner –
(a) any unpaid tax; and
(b) an amount not exceeding the maximum fine imposed by the tax
law for the offence.
(2) The Commissioner may compound an offence under this section only if
the offender admits, in writing, to committing the offence and requests
the Commissioner to enter into a compounding agreement in relation to
the offence.
(3) If the Commissioner compounds an offence under this section, the

compounding agreement in relation to the offence –
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(a) shall specify the name of the offender, the offence committed, the
sum of money to be paid, and the date for payment;
(b) shall have a copy of the written admission referred to in

subsection (2) attached;
(c) shall be served on the offender;
(d) is not subject to any appeal;
(e) may be enforced in the same manner as a decree of any court for
the payment of the amount stated in the order; and
(f) on production to any court, is treated as proof of the conviction

of the offender for the offence specified.
(4) Where the Commissioner compounds an offence under this section, the
offender is not be liable for prosecution or penal tax in respect of the
same act or omission that was the subject of the compounded offence.
67. Tax Charged to be paid despite Prosecution
The amount of any tax due and payable under a tax law by a taxpayer is
not abated by reason only of the conviction or punishment of the
taxpayer for an offence under any tax law, or for the compounding of
such offence under section 66.
PART XVI - MISCELLANEOUS
68. Validity of Tax Decision
The validity of a tax decision, a notice of a tax decision, or any other

document purporting to be made or executed under a tax law is not –
(a) affected by reason that any of the provisions of the tax law under
which it is made have not been complied with;
(b) quashed or deemed to be void or voidable for want of form; or
(c) affected by reason of any mistake, defect, omission or commission in

it.
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69. Rectification of a Mistake
Where the Commissioner is satisfied that an order or decision made, or a

document or notice issued contains an error which is apparent from the
record and that the error does not involve a dispute as to the interpretation of
the law or facts of the case, the Commissioner may, for the purpose of
rectifying the error, amend the order, decision, document or notice at any
time before the expiry of three years from the date of making or issuing the
order, decision, document or notice.
70. Forms, Notices, and Authentication of Documents
(1) Subject to section 47, a form, notice, tax return, statement, table, or any
other document required or published by the Commissioner for the
purposes of a tax law shall be in the form determined by the
Commissioner.
(2) The Commissioner shall make any document referred to in subsection

(1) available to the public at the offices of the Authority and at other
locations, or by mail or other means, determined by the Commissioner.
(3) A notice or other document issued, served, or given by the

Commissioner under a tax law is sufficiently authenticated if the name
or title of the Commissioner, or an authorised tax officer, is printed,
stamped, or written on the document.
71. Approved or Prescribed Form
(1) A tax return, notice, or other document required to be furnished or

lodged under a tax law is in the approved or prescribed form if
(a) it is in the form prescribed by the Commissioner for that type of

tax return, notice, or document;
(b) it contains the information, including any attached documents

required; and
(c) is signed as required by the form.
(2) The Commissioner shall publish the prescribed forms in the gazette and
a newspaper with wide circulation.
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72. Manner of Furnishing Documents or Service of Notices
(1) Except as provided in section 72, a tax return, application, notice, or

other document required to be furnished by a taxpayer under a tax law
shall be furnished by –
(a) personally delivering the document to an office of the Authority;

or
(b) registered post to an office of the Authority,
and is treated as received by the Commissioner when acknowledged by

stamping or other prescribed method, electronic or otherwise.
(2) Except as otherwise provided in a tax law, a notice or other document

required to be served by the Commissioner on a person for the purposes
of a tax law is treated as sufficiently served on the person if –
(a) personally served on the person;
(b) left at the person’s registered office, place of business, or last

known address as stated in any communication with the
Commissioner;
(c) sent by registered post to the person’s registered office, place of

business, or last known address as stated in any communication
with the Commissioner; or
(d) an electronic data message is transmitted to the person’s known

or registered electronic account.
(3) Where a notice or other document is served by registered post, the

notice or document is, in the absence of any proof to the contrary,
treated as having been sufficiently served on the fourteenth day after the
date of postage and, in proving service, it is sufficient to prove that the
envelope containing the notice or other document was properly
addressed and was posted.
73. Electronic Returns and Notices
(1) The Commissioner may establish and operate a procedure to be known

as the electronic notice system, for the electronic furnishing of tax
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returns or other documents to the Commissioner and the electronic

service of notices and other documents by the Commissioner.
(2) For the purposes of subsection (1), the Commissioner may prescribe
conditions for:–
(a) the registration of taxpayers to participate in the electronic notice

system;
(b) the issuing and cancellation of authentication codes to registered

users;
(c) the tax returns and other documents that may be transmitted
through the electronic notice system, including the format and
manner in which they are to be transmitted;
(d) the correction of errors in or amendments to electronic returns or

other documents;
(e) the use of the electronic notice system, including the procedure
applicable if there is a breakdown or interruption in the system;
(f) the use in any electronic transmission of symbols, codes,

abbreviations, or other notations to represent any particulars or
information required under a tax law; and
(g) any other matter for the proper functioning of the electronic
notice system.
(3) Where a tax return or other document of a registered user has been
transmitted to the Commissioner through the electronic system using
the authentication code assigned to a registered user,
(a) with or without the authority of the registered user; and
(b) before the registered user applies to the Commissioner for

cancellation of the authentication code,
the return or other document is, for the purposes of the tax law under
which it has been furnished, presumed to be furnished by the registered
user unless the registered user proves the contrary.
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(4) A person who furnishes an electronic tax return or other document on

behalf of another person must not divulge or disclose the contents of the
return or document, or a copy of it, without the prior written consent of
the Commissioner.
74. Appeal from the Decision of the Committee
Section 14 of the Tax Appeals Tribunal Act, cap 345 is amended by

substituting for sub clause (1) the following –
(a) a person who is aggrieved by a decision made under a taxing Act

by the:–
(i) Uganda Revenue Authority; or
(ii) Committee established under the Tax Procedures Code Act,

may apply to the tribunal for a review of the decision.
75. Regulations
(1) The Minister may, by statutory instrument, make regulations –
(a) prescribing fees, or other matters required under this Act; or
(b) for the better carrying into effect of the provisions and purposes
of this Act.
(2) Without prejudice to the general effect of subsection (1), regulations

made under that subsection may –
(a) contain provisions of a saving or transitional nature subsequent to

the coming into force of this Act; or
(b) prescribe in respect of a contravention of the regulations –
(i) a penalty not exceeding a fine of one hundred twenty five

currency points or imprisonment not exceeding one year or
both;
(ii) in the case of the second or subsequent offence, a penalty

not exceeding a fine of fifty currency points or
imprisonment not exceeding two years or both;
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(iii) in the case of a continuing offence, an additional fine not

exceeding five currency points in respect of each day on
which the offence continues; and
(iv) a requirement that the court must forfeit to the Government

anything with which the offence was committed.
(1) The Minister may by statutory instrument with approval of the Cabinet
amend Schedule 1.
(2) The Minister may, by statutory instrument with the approval of

Parliament amend Schedule 2 or 3.
77. Repeals
(1) The following provisions of the Income Tax Act are repealed –
(a) sections 92, 94-110;
(b) sections 129 and 131 to 135; and
(c) sections 137 to 162.
(2) The following provisions of the Value Added Tax Act are repealed–
(a) Part VIII sections 31, 32 and33;
(b) sections 33A to 40;

(c) sections 46 to 64;
(d) sections 68 to 70A; and
(e) sections 79 and 80.
78. Transitional Provisions
(1) A prosecution commenced before the commencement of this Act shall

continue and be disposed of as if this Act had not come into force.
(2) Where the period for making any application, appeal, or prosecution
has expired before the commencement of this Act, nothing in this Act is
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to be construed as enabling the application, appeal, or prosecution to be

made under this Act by reason only of the fact that a longer period is
specified in this Act.
(3) A tax liability that arose before the commencement of this Act may be
recovered under this Act, but without prejudice to any action already
taken for the recovery of the tax.
(4) All forms and documents used under the tax laws specified in Schedule
2 may continue to be used until they are revoked under this Act and all
references in those forms and documents to the tax laws under that
Schedule are taken to refer to the corresponding provisions in this Act.
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SCHEDULE 1
Sec.3
Currency Point
One currency point is equivalent to twenty thousand Shillings.
SCHEDULE 2
Sec.2
Tax Laws
For the purposes of this Act, a reference to tax law means –
(a) this Act;

(b) the Income Tax Act;
(c) the Value Added Tax Act;
(d) the Excise Duty Act;
(e) Gaming Pool Betting (Control and Taxation) Act;
(f) any other Act imposing a tax as the Minister, may by statutory
instrument declare in accordance with section 76 (2).
SCHEDULE 3
Sec.15
Amount of Turnover in respect of which Audited Financial Statements are

required
Uganda Shillings 500,000,000 and above
Cross References
1. Income Tax Act, Cap 340

2. Tax Appeals Tribunal Act, Cap 345
3. Uganda Revenue Authority Act, Cap 196
4. Value Added Tax Act, Cap 349
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Lotteries & Gaming Act 2016
THE LOTTERIES AND GAMING

ACT, 2016
An Act to reform the law relating to the conduct of lotteries, gaming,
betting and casinos; to establish the National Lotteries and Gaming
Regulatory Board; to provide for licensing and regulation of lotteries,
gaming and betting; to provide for taxation of casinos, gaming and betting
activities; to repeal the National Lotteries Act, Cap. 191 and the Gaming
and Pool Betting (Control and Taxation) Act, Cap. 292; and for related
matters.
Date of Assent: 28th December, 2015

Date of Commencement: 8th April, 2016
1. Interpretation.
PART II - NATIONAL LOTTERIES AND GAMING REGULATORY

BOARD
The National Lotteries and Gaming Regulatory Board
2. Establishment of the National Lotteries and Gaming Regulatory Board.

3. Objective of the Board.
4. Functions of the Board
5. Powers of the Board
6. Composition of the Board
7. Tenure of office of members of the Board
8. Meetings of the Board.
9. Remuneration of members of the Board.
Staff of the Board
10. Secretariat of the Board.

11. Chief Executive Officer
12. Functions of the Chief Executive officer
13. Tenure of office and remuneration of Chief Executive officer
14. Exemption from personal liability.
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PART III - FINANCES OF THE BOARD
15. Funds of the Board

16. Power to open bank accounts
17. Borrowing powers
18. Estimates of income and expenditure
19. Financial year of the Board
20. Accounts
21. Audit of accounts
22. Annual report
PART IV - LICENSING AND REGULATION OF LOTTERIES
National Lottery
23. Licence to conduct the national lottery
Public Lotteries
24. Licence to conduct a public lottery
Regulation of Lotteries
25. Lottery rules.
PART V - CASINO, GAMING AND BETTING LICENCES
26. Casino, gaming and betting licence.

27. Board to issue licences.
28. Licence to operate a casino.
29. Suitability of premises
30. Specific licence conditions.
31. Licensing of certain casino employees
32. Casino games and rules.
33. Gaming and betting and betting equipment within the casino.
PART VI - SPECIFIC PROVISIONS ON GAMING AND BETTING

MACHINES
34. Specific conditions for gaming and betting machines licence.
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Registration of Gaming and Betting Machines and Devices
35. Registration of gaming and betting machines or devices.

36. National register of gaming and betting machines and devices.
37. Technical standards for gaming and betting machines.
38. Gaming and betting software standards
PART VII - GENERAL PROVISIONS ON LICENCING
39. Minimum capital requirements

40. Bond
41. Application for a licence.
42. Processing of application by the Board
43. General licence conditions.
44. Form of licence.
45. Duration of licence.
46. Suspension and revocation of licence.
47. Renewal of licence
PART VIII - TAXATION OF CASINOS, GAMING AND

BETTING ACTIVITIES
48. Tax on casinos, gaming and betting.

49. Interest on unpaid tax.
50. Returns.
51. Assessment.
52. Objection to assessment.
53. Remission of tax.
54. Recovery of unpaid tax and interest.
55. Penal tax.
56. Commissioner to collect tax.
PART IX - MISCELLEANEOUS
Restrictions on Minors
57. Licensee or agent not to accept entry or payment from minors.

58. Adults not to enter or subscribe to public lottery on behalf of minors.
59. Display of notice prohibiting minors from entering lottery.
60. Prohibited items.
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Electronic Monitoring System
61. National central electronic monitoring system.

62. Display of licence.
Appeals
63. Appeals
64. Conducting a lottery or related competition without a licence.

65. Promoting or advertising unlicensed lottery.
66. Forging tickets or selling forged tickets
67. Offences relating to casinos, gaming and betting.
68. Offences relating to tax
70. Regulations
Repeal and Savings
71. Repeal of Cap 191 and Cap. 292
Schedules
Schedule 1 - Currency point

Schedule 2 - Meetings of the Board and related matters
Schedule 3 - Matters to be provided for by lottery rules
Schedule 4 - Rate of tax
Schedule 5 - Prohibited items
_________________________________________________________________
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BE IT ENACTED by Parliament as follows:
1. Interpretation
“agent of a licensee” means an agent appointed or approved in accordance

with the conditions of the licence held by the licensee;
“betting” means making or accepting a bet on –
(a) the outcome of a race, competition or other event or process;
(b) the likelihood of anything occurring or not occurring; or
(c) whether anything is or is not true.
“Board” means the National Lotteries and Gaming Regulatory Board;
“casino” means a private club, or a room in a club, hotel, or other

establishment, where gambling takes place or place where people gamble by
playing card games, roulette, or slot machines which has been issued with a
licence under this Act;

Uganda Revenue Authority Act, Cap 196;
“conducting a public lottery” includes promoting, organising and operating a

public lottery;
“currency point” has the value assigned to it in Schedule 1;
“gaming” means the playing of a game of chance for winnings in money or

money’s worth and for the avoidance of doubt, includes gambling;
“gaming and betting machine or device” means any equipment or

mechanical, electromechanical or electronic contrivance, component or
machine; or software used remotely or directly in connection with gaming
and betting or any game which affects the result of a wager by determining a
win or loss;
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“licence” means a licence issued under this Act;
“licensee” means the holder of a licence;
“lottery” includes any game, scheme or arrangement, system, plan,

promotional competition or device for distributing prizes or property by lot or
chance, whether by throwing or casting of dice, tickets, cards, lots, numbers
or figures;
“Minister” means the Minister responsible for finance;
“minor” means a person below twenty five years;
“National lottery” means lottery conducted by or on behalf of the Minister

responsible for finance with the view of raising funds for a purpose defined by
the Minister;
“numbers” include –
(a) symbols;
(b) a single number or symbol;
(c) a group or groups of numbers or of symbols or of numbers and

symbols;
(d) a combination or combinations of numbers or of symbols or of

numbers and symbols; or
(e) a distribution or distributions of numbers or of symbols or of

numbers and symbols; and
a person chooses numbers if the person chooses the numbers

personally or if the numbers are chosen for the person;
“pool” means any competition organized for gain, in which for monetary or
other material regard, the public is invited to forecast or tell the result of any
game, race, or event and includes a pool operated on the system known as
fixed odds betting on the results of that game, race or event;
“pool bet” means any stake or wager in a pool, whether in money or money’s
worth and includes any portion of that stake or wager;
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“prize” means the prize awarded to the winner of a lottery;
“promotional competition” means a lottery, game or contest conducted

for the purpose of promoting the sale or use of any goods or services;
“public lottery” includes –
(a) a game of chance, including a game such as draw lottery or bingo, in

which –
(i) a person chooses or is allocated numbers;
(ii) certain numbers are subsequently selected at random as

prizewinning numbers, and
(iii) prizes are distributed to persons holding the prizewinning

numbers;
(b) a game of chance including an instant lottery in which –
(i) certain numbers are designated as prize winning numbers;
(ii) persons are allocated numbers that have previously been

selected at random;
(iii) prizes are distributed to persons holding the prize winning

numbers;
(c) a game of chance such as lotto, keno or power-ball in which persons

choose or attempt to forecast, from designated numbers, fewer
numbers to be drawn on a random basis; or
(d) the game known as soccer football pool in which persons

choose or attempt to forecast, from designated numbers, fewer
numbers that represent the outcome of soccer football matches;
“wager” means a sum of money or representative of value that is risked on an

occurrence for which the outcome is uncertain.
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PART II - NATIONAL LOTTERIES AND GAMING REGULATORY

BOARD
The National Lotteries and Gaming Regulatory Board
2. Establishment of the National Lotteries and Gaming Regulatory Board

3. Objective of the Board
4. Functions of the Board
Non-tax related details
5. Powers of the Board intentionally omitted
6. Composition of the Board
7. Tenure of office of members of the Board
8. Meetings of the Board
9. Remuneration of members of the Board
Staff of the Board
10. Secretariat of the Board

11. Chief Executive Officer
12. Functions of the Chief Executive Officer
13. Tenure of office of Chief Executive Officer
14. Exemption from personal liability
PART III - FINANCES OF THE BOARD
15. Funds of the Board
(1) The funds of the Board shall be appropriated by Parliament for the
purposes of the Board.
(2) The Board shall collect –
(a) the proceeds from the national lottery after deducting the expense
of conducting the lottery.
(b) one per cent of the annual turnover of every lottery, gaming or
betting business licenced under this Act;
(c) licence, application fees and any other fees.
(3) The monies collected in subsection (2) shall be remitted to the

Consolidated Fund in accordance with the Public Finance Management
Act, 2015.
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16. Power to open bank accounts

17. Borrowing powers
18. Estimates of income and expenditure Non-tax related details
intentionally omitted
19. Financial year of the Board
20. Accounts
21. Audit of accounts
22. Annual reports
PART IV - LICENSING AND REGULATION OF LOTTERIES
National Lottery
23. Licence to conduct the national lottery
Public Lotteries
24. Licence to conduct a public lottery
Regulation of Lotteries
25. Lottery rules
PART V - CASINO, GAMING AND BETTING LICENCES
26. Casino, gaming and betting licence

27. Board to issue licences
28. Licence to operate a casino Non-tax related details
29. Suitability of premises
30. Specific licence conditions
31. Licensing of certain casino employees
32. Casino games and rules
33. Gaming and betting equipment within the casino
PART VI - SPECIFIC PROVISIONS RELATING TO GAMING OR

BETTING MACHINES
34. Specific conditions for gaming or betting machines licence

35. Registration of gaming and betting machines or devices
36. National register of gaming or betting machines and devices
37. Technical standards for gaming or betting machines
38. Gaming or betting software standards
_________________________________________________________________
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PART VII - GENERAL PROVISIONS ON LICENCING
39. Minimum capital requirements

40. Bond
41. Application for a licence
42. Processing of application by the Board
43. General licence conditions Non-tax related details
44. Form of licence
45. Duration of licence
46. Suspension and revocation of licence
47. Renewal of licence
PART VIII - TAXATION OF CASINOS, GAMING AND BETTING

ACTIVITIES
48. Tax on casinos, gaming or betting
(1) An operator of a casino, gaming or betting activity issued with a licence

under this Act shall, in addition to taxes prescribed by law, pay a gaming
tax at the rate prescribed in Schedule 4.
(2) The amount of tax levied under subsection (1), the intervals and the time
within which it shall be paid shall be determined by the Minister.
49. Interest on unpaid tax
Any person who does not pay tax due on the due date shall, in addition to
the tax, pay interest equal to two per cent of the outstanding amount for each
week or part of the week that the tax remains unpaid.
50. Returns
(1) A taxable person shall lodge a tax return with the Commissioner for each
tax determined under section 48 by the 15th day of the following month.
(2) The tax return shall be in a form prescribed by the Commissioner.
51. Assessment
(1) A tax return submitted by a promoter, a principal or a person licenced

under this Act shall be treated as a self-assessment issued by the
Commissioner.
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(2) The Commissioner may make an assessment of the tax payable where—
(a) a tax payer defaults in furnishing a return under this Act;
(b) the Commissioner is not satisfied by a return made by a promoter or

principal or a person licenced under this Act.
(3) Where the Commissioner makes an assessment under subsection (2) (b),
the Commissioner shall state the reasons why the Commissioner is not
satisfied.
52. Objection to assessment
(1) A person may object to an assessment within forty five days from the
date the assessment is served on that person.
(2) The objection shall be addressed to the Commissioner and shall state the
grounds on which the objection is based.
(3) The Commissioner shall consider the objection and may –
(a) allow the objection and amend the assessment;
(b) reject the objection and maintain the assessment.
(4) Where a person objects to an assessment in part, the person shall pay the
tax which is not in dispute or a lesser amount determined by the
Commissioner, until the objection is determined.
(1) The Commissioner may refer a taxpayer’s case to the Minister, where the
Commissioner is of the opinion that the tax due or any part of it cannot
be effectively recovered due to hardship, impossibility, undue difficulty
or the excessive cost of recovery.
(2) Where the Minister is satisfied that the tax due in respect of the case
referred by the Commissioner cannot be effectively recovered, the
Minister may remit or write off the tax.
_________________________________________________________________
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54. Recovery of unpaid tax and interest
(1) Tax due and any interest in respect of the tax is a debt due to the
Government and may be recovered as a civil debt.
(2) Without prejudice to subsection (1), the Commissioner may recover tax
due and any interest by –
(a) sealing the premises used by the principal, agent or a person licensed
under this Act for the purposes of a casino or gaming and betting;
(b) an agency notice requiring any person owing or holding money for
or on behalf of the taxpayer (principal or agent) to pay the money to
the Commissioner;
(c) distress proceedings on the financial, movable or immovable

property of the taxpayer.
(3) For the purposes of subsection (2)(c), a person making a payment to the
Commissioner in accordance with a notice issued by the Commissioner
shall be taken as acting under the authority of the person liable to pay the
tax and is absolved in respect of the amount paid.
(4) The Commissioner may at any time enter any premises or house
specified in the distress order.
55. Penal tax
(1) A person who fails to lodge a tax return within the time specified under
this Act is liable to a penal tax of ten currency points.
(2) A person who fails to maintain proper records in accordance with

regulations made under this Act is liable to a penal tax equal to double
the amount of the tax payable.
(3) Where a person pays a penal tax under this section and the tax to which
it relates is refunded, the penal tax or the part which relates to the tax
refunded shall be refunded.
56. Commissioner to collect tax
The Commissioner shall collect all the tax required to be paid under this Act.
_________________________________________________________________
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PART IX - GENERAL
Restrictions on Minors intentionally omitted
57. Licensee or agent not to accept entry or payment from minor

58. Adults not to enter or subscribe to public lottery on behalf of minor
59. Display of notice prohibiting minors from entering lottery
60. Prohibited items
Electronic Monitoring System
61. National central electronic monitoring system

62. Display of licence
Appeals
63. Appeals
(1) A person aggrieved by a decision relating to tax under Part VIII of this
Act may, within thirty days after notice of the decision, appeal to the Tax
Appeals Tribunal.
(2) A person aggrieved by a decision made under this Act, other than a
decision made under section 42(5) and Part VIII may, within thirty days
after notice of the decision, appeal to the High Court.
(3) A person who intends to appeal against a decision under this Act shall
serve a copy of the notice of appeal on the Board and the Minister.
64. Conducting a lottery or related competition without a licence

65. Promoting or advertising unlicensed lottery Non-tax related details
66. Forging tickets or selling forged tickets intentionally omitted
67. Offences relating to casinos, gaming and betting
68. Offences relating to tax
A person who knowingly or recklessly –
(a) does not make a return as required by this Act;
_________________________________________________________________
- 415 -
(b) makes a statement or declaration which is false or misleading, to the

Commissioner or a person authorized by the Commissioner;
(c) omits from a statement or declaration any matter or thing without which,
the statement or declaration is misleading and the tax payable by the
person exceeds the tax assessed,
commits an offence and is liable on conviction to a fine not exceeding forty

eight currency points or imprisonment not exceeding two years or both.
(1) The Minister may, with the approval of Cabinet, by statutory instrument,
amend Schedule 1 of this Act.
(2) The Minister may, with the approval of Parliament by statutory

instrument, amend Schedule 2 and 3 of this Act.
70. Regulations
(1) The Minister may, on the recommendation of the Board by statutory

instrument, make regulations to give effect to this Act within a
period of six months from the date of assent.
(2) Without prejudice to sub section (1) the Minister may make regulations
for –
(a) the keeping of records in respect of gaming and betting machines,

including the form, transfer and inspection of the records;
(b) the fees required to be prescribed or for the services rendered by

the Board;
(c) the transfer or movement of gaming and betting machines and

equipment;
(d) advertising of casinos and gaming and betting;
(e) the facilities and amenities to be made available to patrons in a

casino or gaming and betting premises;
(f) the form of applications for a licence under this Act;
_________________________________________________________________
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(g) the power and manner of inspection and investigation persons

licensed under this Act;
(h) the provision of assistance to persons who are or may be affected by

problems related to gambling;
(i) establishing the identity of users of a casino or gaming and betting

facilities;
(j) recording the identity of users of a casino or gaming and betting

facilities;
(k) restricting gaming and betting facilities to persons registered in

respect of the facilities in advance;
(l) the handling of complaints and determination of disputes under this

Act;
(m) the disposal of unclaimed prizes;
(n) regulating the appointment and use of agents by a person licensed to

conduct a lottery;
(o) regulating the holding of a draw for a lottery;
(p) the mode and time of payment of fees or money payable under this
Act;
(q) requiring licence holders to restrict access of premises to children

including –
(i) taking specified steps to ensure that a child does not enter the
premises;
(ii) ensuring that each entrance to the premises is supervised by a

person whose responsibilities include ensuring that a child does
not access the premises; and
(iii) requiring evidence of age to be produced by any person seeking

admission to the premises,
(r) any other matter that is necessary or incidental to giving effect to this
Act.
_________________________________________________________________
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(3) Regulations made under this section may prescribe in respect of a

contravention of the regulations, a fine not exceeding forty eight currency
points or imprisonment not exceeding two years.
71. Repeal of Cap. 191 and Cap. 292
(1) The National Lotteries Act and the Gaming and Pool Betting (Control
and Taxation) Act are repealed.
(2) Notwithstanding subsection (1) –
(a) a statutory instrument made under the National Lotteries Act, Cap.
191 or Gaming and Pool Betting (Control and Taxation) Act Cap.
292 and is in force at the commencement of this Act is valid until it is
revoked under this Act;
(b) a licence issued under the National Lotteries Act Cap 191 and the
Gaming and Pool Betting (Control and Taxation) Act Cap 292 shall
remain valid as if it were issued under this Act or until it is
suspended or revoked in accordance with this Act;
(c) the National Lotteries Board existing immediately before the

commencement of this Act shall continue in existence until the
Minister appoints a Board under this Act.
SCHEDULE 1
Section 1, 69
Currency Point
One currency point is equivalent to twenty thousand shillings.
SCHEDULE 2
Section 8
MEETINGS OF THE BOARD AND RELATED MATTERS
1. Meetings of the Board

2. Quorum
3. Minutes of meetings
4. Power to co-opt intentionally omitted
5. Validity of proceedings not affected by vacancy

6. Disclosure of interest of members
7. Official seal of the Board
8. Board may regulate its procedure
_________________________________________________________________
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SCHEDULE 3
Matters to Be Provided For By Lottery Rules

Section 25
1) The amount payable for subscription, entry or acceptance of entries

into the lottery;
2) Restrictions on persons below eighteen years participating in the lottery;
3) The form and manner of entering the lottery;
4) The minimum or maximum number of entries that may be made in the

lottery;
5) The amount payable in respect of each entry;
6) The amount of money prizes and the nature of other prizes;
7) The number of tickets issued under the lottery;
8) Verification of tickets relating to the lottery;
9) Claiming prizes by participants;
10) Any other matter prescribed by the Minister.
SCHEDULE 4
Amended by Finance Act 2016 & LG(Am) Act 2017

Rate of Tax
Section 48
Twenty percent (20%) [Thirty five percent] of the total amount of money
staked less the pay outs (winnings) for the period of filing returns.
SCHEDULE 5
Section 60
Prohibited Items
1. Guns, shotguns and machine guns

2. Saline
3. Explosives, knives and chloroform, acid.
_________________________________________________________________
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Domestice Tax Laws of Uganda (2017 Edition)

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FOR PUBLIC RELEASE

By Joseph O. Okuja at 9:51:30 AM, 23/06/2017

DOMESTIC TAX LAWS

TASLAF Advocates & Consultants

While making reference to this compendium, the following adaptations

In this compendium, substitutions or insertions of words within original provisions are

This compilation is the personal effort of the undersigned. It is neither

FOR GOD AND MY COUNTRY

INCOME TAX ACT | Cap 340

Commencement: 1st July 1997

1. Application of the Act

PART II – IMPOSITION OF TAX

4. Income tax imposed

6. Rates of tax for individuals

PART III – RESIDENTS AND NON-RESIDENTS

PART IV – CHARGEABLE INCOME

15. Chargeable income

19. Employment income

21. Exempt income

22. Expenses of deriving income

PART V – TAX ACCOUNTING PRINCIPLES

39. Substituted year of income

PART VI – GAINS AND LOSSES ON DISPOSAL OF ASSETS

49. Application of Part VI

PART VII – DETERMINING CHARGEABLE INCOME

55. Income of joint owners

PART VIII – PERSONS ASSESSABLE

63. Taxation of individuals

Taxation of Partnerships and Partners

65. Principles of taxation of partnerships

Taxation of Trusts and Beneficiaries

70. Provisions relating to taxation of trusts and beneficiaries

Taxation of Companies and Shareholders

74. Principles of taxation for companies

PART IX – INTERNATIONAL TAXATION

78. Interpretation of Part IX

PART IXA – TAXATION OF PETROLEUM OPERATIONS

89B. Taxation of mining licenses

89G. Taxation of petroleum licenses

Rules applicable to Mining and Petroleum Operations

90. Transactions between associates

PART XI – PROCEDURE RELATING TO INCOME TAX

92. Furnishing of return of income

Objections and Appeals

99. Objection to assessment

Collection and Recovery of Tax

103. Due date for payment of tax

111. Payment of provisional tax

PART XII – PROCEDURE RELATING TO RENTAL TAX

114. Rental tax

PART XIII – WITHHOLDING OF TAX AT THE SOURCE

115. Interpretation of Part XIII

121. Non-resident services contract

PART XIV – RECORDS AND INFORMATION COLLECTION

129. Accounts and records

Tax Clearance Certificate

134. Tax clearance certificate

Tax Identification Number

135. Tax identification number

PART XV – OFFENCES AND PENALTIES