The government of Uganda has enacted a series of amendments to various laws related to taxation, including the Income Tax (Amendment) Act 2024, the Value Added Tax (Amendment) Act 2024, the Tax Procedures Code (Amendment) Act 2024, and the Stamp Duty (Amendment) Act 2024.
The President of the Republic of Uganda assented to these amendments on 15 July, 2024, which were then announced to the public via a press release on 16 July, 2024.
Income Tax (Amendment) Act, 2024
The objective of this Bill is to amend the Income Tax Act, Cap. 340; to expand the definition of the retirement fund; to impose a tax on the disposal of non-business assets; to exempt income derived from or by private equity or venture capital fund, the manufacture of electric vehicle and electric vehicle charging equipment, operation of a specialised hospital facility; and to replace a reference to a branch with the permanent establishment for purposes of international taxation.
A new 10% withholding tax has been introduced on commissions paid to payment service providers, which includes banking agents and other financial service agents.
Stamp Duty (Amendment) Act, 2024
The objective of this Bill is to amend the Stamp Duty Act, 2014, to prescribe a stamp duty rate for the nominal share capital or any increase of shares, acquired by an investor in a private equity or venture capital fund, for the transfer of shares or other securities, to or by an investor in a private equity or venture capital fund, for an instrument executed by or on behalf of a company or Government in respect of manufacturer of an electric vehicles or electric charging equipment and for related matters.
To qualify, investors must meet specific criteria, including a minimum capital investment of USD 10 million for foreigners or USD 300,000 for Ugandan citizens. In addition, at least 80% of raw materials utilised must be produced locally and the workforce should consist of at least 80% Ugandan citizens.
Value Added Tax (Amendment) Act, 2024
The objective of this Bill is to amend the Value Added Tax Act, Cap. 349 to classify the supply of goods or services by an employer to an employee at no consideration as a taxable supply; to increase the threshold for the offset in case of overpaid tax from UGX 5 million to UGX 10 million.
One key amendment of this Act includes the classification of goods or services provided by an employer to an employee at no cost as taxable supplies. Employers will be required to pay a VAT of 18% on these supplies such as donations, gifts, or internet data. Additionally, cash refund claims are now restricted to amounts exceeding UGX 10 million (USD 2,700).
Tax Procedures Code (Amendment) Act, 2024
The objective of this Bill is to amend the Tax Procedures Code Act, 2014, to require a taxpayer who intends to claim a deduction of or credit for the goods destroyed to inform the Commissioner before the destruction of the goods.
One key amendment of the Act is that Taxpayers who settle their outstanding principal taxes by 31 December 2024, will get a waiver from interests and taxes accrued up to 30 June, 2023. Furthermore, the deadline for the payment of these outstanding principal taxes has been extended until the end of 2024.
