Budget of Uganda - Tax Proposals and there Implications by PKF

1. Accountants &
business advisers
Tax Proposals & their
implications
GOU Budget 2013/2014
Albert Beine
Senior Tax Manager
PKF Uganda
14 June 2013

2. Accountants &
business advisers
“THE JOURNEY CONTINUES:
TOWARDS………………”
2013/14 Budget Theme

3. Accountants &
business advisers
“THE JOURNEY CONTINUES: TOWARDS
SOCIO-ECONOMIC TRANSFORMATION FOR
UGANDA”
2013/14 Budget Theme

4. Impact of some of the tax
measures for 2012/13 Budget
Tax Measure Objective Impact as of Dec
2012
Increase in PAYE
threshold
Reduce tax burden on
low earners
Loss of 32.05bn
Additional 10% for
those earning >
120m annually
Compensate for the
above
30.78bn realized
Reinstate VAT on
supply of water
To generate 21.7bn
(supply of water for
domestic use
exempted)
VAT on water for
commercial use
has so far yielded
10.4bn

5. Impact of some of the tax
measures for 2012/13 Budget
Tax Measure Objective Impact as of Dec
2012
Excise duty on
spirits made from
locally made raw
materials from
45% to 60%
To generate 10.4bn 4.53bn collected so
far
Excise duty on
cosmetics &
perfumes
To generate 4.1bn 5.2bn collected so
far.

6. Accountants &
business advisers
2013/2014 Tax Proposals
& their implications

7. Accountants &
business advisers
Objectives
to raise revenues;
enhance transparency in
collection and enforcement;
improve compliance;
encourage investment; and
Improve tax administration.
Note: Details of the proposals will be found in Finance
Bill 2013

8. Accountants &
business advisers
Income Tax
Widen scope of WHT agents to
capture non-compliant tax
persons
(expected to raise 5bn)
Provide collaboration between
URA, KCCA and Local
Governments in tax collection.

9. Accountants &
business advisers
Value Added Tax
Hotel accommodation
Elimination of VAT exemption
(Expected to raise Shs 6 billion)
Supply of water for domestic use
Elimination of VAT exemption
(Expected to raise Shs 8 billion)

10. Accountants &
business advisers
Value Added Tax
Wheat and wheat flour
-Elimination of VAT exemption
(Expected to raise Shs 30 billion)

11. Accountants &
business advisers
• Item Old rate New rate
Petrol and diesel
(Expected to raise Shs
72 billion)
Petrol – Shs 850
Diesel – Shs 530
Petrol – Shs 900
Diesel – Shs 580
Kerosene
(Expected to raise Shs
15 billion)
Nil
Restoration of
excise duty at
Shs 200 per litre
Undenatured spirits
(at importation)
70% 140%
Changes in Excise Duty rates

12. Accountants &
business advisers
• Item Old rate New rate
Cigarettes – soft cup
(whose local content is more
than 70% of its constituents)
Shs 22,000 Shs 32,000
Cigarettes – other soft cup Shs 25,000 Shs 35,000
Cigarettes – Hinge lid Shs 55,000 Shs 69,000
Changes in Excise Duty rates

13. Accountants &
business advisers
• Item Old rate New rate
Promotional activities
akin to gambling
(expected to raise Shs 8
billion)
- 20% on
revenue
Money transfers
(mobile network
operators and other
money transfer
operators)
- 10% on fees
charged on
transfer
Changes in Excise Duty rates

14. Accountants &
business advisers
Changes in Stamp duty
Third party insurance policies
-An extra Shs 30,000 as stamp duty
(Expected to raise Shs 12 billion)

15. Accountants &
business advisers
• Item Old rate New rate
Motorcycle
registration
fees
(expected to
raise Shs 8.64
billion)
Shs 130,000 Shs 200,000
Motor Vehicle
registration
fees
(expected to
raise Shs 8
billion)
Saloon cars – Shs
1,000,000
Non saloon cars –
depends on tonnage
Increased by
Shs 200,000
Changes in Fees and Licenses

16. Accountants &
business advisers
Non Tax Revenue
International call Levy
-To impose an international calls
levy on international incoming calls
(expected to raise Shs 43 billion)

17. Accountants &
business advisers
Non Tax Revenue
NTR rates by MDAS
-Revision of some NTR rates
(expected to raise Shs 32 billion)

18. Accountants &
business advisers
Tax Administration
Collection of Non-Tax
Revenues
Mandating of URA to collect all fees and
other charges under the Uganda Registration
Services Bureau, The Directorate of
Citizenship and Immigration and the Ministry
of Energy and Mineral Development
collection. However, the assessment will
remain under the MDAs.

19. Accountants &
business advisers
Tax Administration
Collection of Non-Tax
Revenues (ct’d)
To encourage ministries, agencies &
departments which collect NTR, some will be
allowed to retain NTR & use it at source.

20. Accountants &
business advisers
Tax Administration
In Financial Year 2013/14, Government will
comprehensively review the exemptions in the
VAT Act and the Income Tax Act with the aim
of eliminating them to increase revenue and
improve administration.
In the coming financial year and over the next
three years, URA will build on this progress to
obtain significant increase in tax compliance.
The Authority will;

21. Accountants &
business advisers
Tax Administration
Intensify its efforts to enforce compliance on
the different types of taxpayers i.e. large,
medium and small.
Continue expansion of the audit coverage to
include the bulk of the largest traders and
conduct joint audits in the domestic tax and
customs departments to detect and sanction
non-compliance and fraud in a number of
taxes.

22. Accountants &
business advisers
Tax Administration
Enforce the use of the Tax Identification
Number (TIN) for all traders who receive
trading and other licenses and permits from
KCCA and Local Governments.
Clean up the VAT register to ensure that only
those capable of filing monthly and paying
remain on the register.

23. Accountants &
business advisers
Tax Administration
In addition to the revenue targets that the
Ministry sets for URA, the Ministry will put in
place a wider suite of performance indicators
in tax and customs to help URA Management
monitor the results of the modernization
program on a regular basis.

24. Accountants &
business advisers
Tax Administration
URA’s direct access to considerable
information of a taxpayer. Government is to
propose an amendment to the Financial
Institutions Act to allow URA to access a
taxpayer’s financial records, as an exception
to the confidentiality provisions, where a bona
fide tax audit or investigation has been
initiated.

25. Accountants &
business advisers
Conclusion
The journey continues……,
Vision 2040 requires a “fundamental
change”
The tax proposals by
the Hon. Minister
are a step towards
this change.
“For God & my Country”

26. Accountants &
business advisers

27. Accountants &
business advisers
www.pkfea.com
Presenters’ contact details
Albert Beine
Senior Tax Manager – PKF
Plot 1B, Kira Road
Off: +256 414 341523/5
Mob: +256 772 404788
email: abeine@ug.pkfea.com