On 11 July 2023, the Ugandan Parliament approved Income Tax (Amendment) Bill 2023, which introduces a 5% digital service tax (DST) on every non-resident deriving income from providing digital services in Uganda. After President’s approval, the law will take effect from 1 July 2023.
The DST covers the following services:
- online advertising services;
- data services;
- services delivered through an online market place or intermediation platform, including an accommodation online market place, a vehicle hire online market place and any other transport online market place;
- digital content services, including accessing and downloading of digital content;
- online gaming services;
- cloud computing services;
- data ware housing;
- services, other than those services in this subsection, delivered through a social media platform or an internet search engine; and
- any other digital services as the Minister may prescribe by statutory instrument made under this Act.
Moreover, in the law, it is included that following a seven-year period for carrying forward losses, during which 100% of losses can be brought forward, taxpayers are restricted to deducting only 50% of the losses when calculating their chargeable income.
