The beneficial owner definition has been changed in order to facilitate the automatic exchange of information. The new definition specifies the different qualifying criteria for a beneficial owner, such as the percentage of shareholding, influence on transactions as well as personal or financial
superiority, power to make or influence a decision-making process
For rental income, a fixed 50% of gross rental income is to be allowed as expenditure and losses for non-individuals and any expenditure and losses in excess of 50% shall not be carried forward to be claimed in subsequent years. No deduction in form of wear and tear, interest etc will be allowed over and above the prescribed limit of 50%. With the applicable income tax rate
of 30% the effective tax rate on gross rental income shall be 15% for non-individuals. For rental income earned by individuals and partners of partnership firms who are individuals the proposed tax rate is 12% of the gross rental income.
The mortgage interest deduction which has been previously allowed to individuals has been scrapped.
The amendment to Section 86 of the ITA is aimed at clarifying the position that no WHT is chargeable on income derived from the carriage of passengers who do not embark or international transport of cargo or mail which is not embarked in Uganda.
The VAT Amendment Act 2021 kept the importation of any service out of the ambit of VAT, which would be used in the provision of exempt supply (Financial, Medical, Education and insurance services, which are exempt as per the Second Schedule of The VAT Act). With the new amendment, VAT on imported services
becomes applicable (18%), even if the same is to be used in the provision of the exempt supply. The VAT paid on imported services is non-creditable and is to be paid by the importer of the service.
In a move aimed at encouraging import substitution and investment in domestic manufacturers, the East African Community agreed to introduce an additional fourth band to the East African Community External Tariff (CET).
Items included under the fourth band shall attract import duty at 35%. Some of the products include; dairy and meat products, cereals, cotton and textiles, iron and steel, edible oils, beverages & spirits, furniture, leather products, fresh cut flowers, fruits and nuts, sugar and confectionery, coffee, tea and spices, textiles and garments, head gears, ceramic products and paints, among others. It should not be noted that the new fourth band will affect all East African Community states.
Note: Persons engaged in zero-rated supplies pay VAT at zero rate but are entitled to claim input VAT.
| Sec. Ref | Summary nature of an Offence | Approved amendment |
|---|---|---|
|
62B
|
Failure to affix or activate a tax stamps
|
|
|
62C
|
Prints over or defacing of tax stamps
|
|
|
62D
|
Forgery of tax stamps
|
Fine not exceeding Ush
|
|
62E
|
Failure to use an electronic receipting or invoicing
|
30,000,000 or imprisonment not
|
|
62F
|
Forgery of electronic receipt or invoice
|
exceeding 10 years or both
|
|
62G
|
Interference with the electronic fiscal device or electronic dispensing control device
|
|
|
An offence relating to the automatic exchange of information
|
||
|
Fails to file an information return
|
||
|
62H
|
Fails to maintain records for automatic exchange of information
|
Fine not exceeding Ush 50,000,000 for each day of default or
imprisonment not exceeding 10 years or both |
|
Makes a false or misleading statement in the information
return |
||
|
Omits from a statement made in the information return
|
| Particulars | Approved amendment |
|---|---|
|
Provide information leading to the identification of unassessed tax
or duty |
1% of the tax or duty assessed or Ush. 15,000,000 whichever is
less |
|
Provide information leading to the recovery of unassessed tax or
duty |
5% of the tax or duty or Ush. 100,000,000 whichever is less.
|
