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PRESENTATION ON INCOME TAX AMMENDEMENTS AND TAX COMPLIANCE TO
COFFEE TRADING COMMUNITY /COFFEE EXPORTERS AT UCDA ON 26th June 2015.
INTRODUCTION
• The budget for the year 2015/2016 was read after it was accordingly approved by parliament on 30/May 2015 in harmony with section 14 of the Public Finance and Management Act 2015.
• The speech include among others, tax amendments that were approved .
• The effect cut across Tin registration requirement, Changes in threshold, Income tax, VAT among others.
TIN Requirement
• To provide professional services where a license or permit is required (doctors, pharmacies, engineers, architects, lawyers, etc) • To get a trading license•Movement permit (e.g. of cattle from one location to
another)• Owning or transferring a vehicle / boda-boda• NOTE: to supply government / local government you need a
TIN but not VAT registration. • Any taxpayer receiving goods and services above Shs5M will
be required to provide a TIN of the supplier before they can claim a deduction.
Transport Sector
•Advance Income Tax for Passenger and Freight Transport i.e. Improve compliance in the transport sector by levying a flat fee of tax i.e. 50,000/= per ton for goods vehicles and 20,000/= per passenger per year for PSVs. •For example:•Commercial vehicles; Multiply tonnage by 50,000 for commercial vehicles and make an advance payment. E.g. If a Gross weight of a lorry per logbook reading is 7 tones , the income tax there on is (7*50,000=350,000)•Passenger vehicles; Multiply the passenger caring capacity per logbook reading by 20,000 and make an advance payment. E.g. If an Omnibus is a 14 seater, the income tax there on is (14*20,000 = 280,000).• 4
Under Income Tax- Presumptive Tax
•The threshold for presumptive tax payers increased from UGX 50M to 150M .•Introduced the Rates of tax payable by Presumptive tax Payers whose turnover is below UGX 50M depending on location and nature of business.•Presumptive Tax rates reduced from 3% to 1.5%.•This is to simplify procedures, reduce costs of
doing business, ensure that the threshold is in line with the VAT threshold, make it easy to work with Local Governments and to curb the growth of the informal sector.
PRESUMPTIVE RATES FOR KAMPALA CITY AND DIVISIONS OF KAMPALA
General trade 500,000 400,000 250,000
Carpentry/metal works 500,000 400,000 250,000
Garages/metal vehicle repair
550,000 450,000 300,000
Hair and beauty saloons 550,000 450,000 300,000
Restaurants and/or bars 550,000 450,000 300,000
Clinics 550,000 450,000 300,000
Drug shops 500,000 400,000 250,000
Others 450,000 300,000 200,000
PRESUMPTIVE RATES FOR MUNICIPALITIES
Business trade With turn over between(UGX 35,000,000-50,000,000)
With turn over between(UGX 20,000,000-35,000,000)
With turn over between(UGX 10,000,000-20,000,000)
General trade 400,000 300,000 150,000
Carpentry/metal works 400,000 300,000 150,000
Garages/metal vehicle repair
450,000 350,000 200,000
Hair and beauty saloons 450,000 350,000 200,000
Restaurants and/or bars 450,000 350,000 200,000
Clinics 450,000 350,000 200,000
Drug shops 400,000 300,000 150,000
Others 400,000 350,000 150,000
PRESUMPTIVE RATES FOR TOWNS AND TRADING CENTRES
Business trade With turn over between(UGX 35,000,000-50,000,000)
With turn over between(UGX 20,000,000-35,000,000)
With turn over between(UGX 10,000,000-20,000,000)
General trade 300,000 200,000 100,000
Carpentry/metal works 300,000 200,000 100,000
Garages (metal vehicle repair)
350,000 250,000 100,000
Hair and beauty/salons 350,000 250,000 100,000
Restaurants and/or bars 350,000 250,000 100,000
Clinics 350,000 250,000 100,000
Drug shops 300,000 200,000 100,000
Others 300,000 250,000 100,000
Part I Gross Turnover Between 50M to 150MThe amount of tax payable for purposes of section 4(5) is—
Where the gross turnover of the taxpayer exceeds Shs. 50 million but does not exceed Shs. 75 million per annum
Shs. 937,500 or 1.5% of the gross turnover, whichever is lower
Where the gross turnover of the taxpayer exceeds Shs. 75 million, but does not exceed Shs. 100 million per annum
Shs. 1,312,500 or 1.5% of the gross turn over, whichever is lower
Where the gross turnover of the taxpayer exceeds Shs. 100 million but does not exceed Shs. 125 million per annum
Shs. 1,687,500 or 1.5% of the gross turn over,whichever is lower
Where the gross turnover of the taxpayer exceeds Shs. 125 million but does not exceed Shs. 150 million per annum
Shs. 2,062,500 or 1.5% of the gross turnover, whichever is lower
Gross Turnover Between 50M to 150M Cont ……
• . The tax payable by a taxpayer under section 4(5) is reduced by—• (a) any credit allowed under section 128(3) for withholdingtax 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 grossturnover of the taxpayer
ON VAT
•The VAT registration threshold increased from UGX 50M to UGX 150M.•Objective :
To reduce the cost of compliance to the T/payers,
To minimize the cost of administration To harmonize with the region.
•The implication is that those below turn over 150m are to be de-registered from VAT and notification shall be sent to the public to this effect.
ON VAT cont…….
•Voluntary registration is still an option but must meet the criteria like before amendment.
•Taxpayers de-registered due to threshold shall fall into presumptive category.
Rights• Facilitation on tax compliance• Equitable treatment on tax
matters• Confidentiality of information• Objection and appeal• Prior notice on inspection &
audit • Tax refunds• Customer care• Processing returns, customs
entries• Accountability for payments
made to URA
Obligations• To Register for Taxes • To Make correct and
accurate declarations (returns, customs entries)
• To Pay your taxes promptly • To Cooperation with the
authority• To Maintain proper records
and avail them for inspection by the Commissioner
Tax Payer Rights and Obligations
Taxes applicable to coffee trading community (farmers,traders and exporters).
Tax Type Taxed On Who Pays Due Date
WITHHOLDING TAX Advance Tax Collected by listed agents
Service/goods suppliers/importers
By 15th Of Following Month
PAYE Staff emoluments Using PAYE rates
Employees of the agent or dealer
By 15th Of Following Month
VAT Multi-stage Tax Collected by Registered agents.
Final Consumers By 15th Of Following Month
INCOME TAX Tax on Profit derived from Business Income, Rental Income, any other incomes other than presumptive tax with fixed rates.
Trader / person/company in business
Provisional, 30th June/31st Dec.Final Return, 30th June/31st Dec.
Costs of Non Compliance•No license•High taxes due to Fines,
Penalties & Interest•High estimated
assessments•Enforcement action
through Agency Notices etc•Shame list•Reputation Loss•Prosecution
Tips on being tax complaint• Register for the tax, get a TIN
• Prepare and keep records of your transactions
• Make Correct declarations
• Pay the right tax by the due date
• Seek guidance from URA through various channels like email, telephone,nearest office, etc
It pays to comply
• Acquisition of license from Government bodies.
• Tax Clearances
• Awards and Recognition
• Reputation
•WHT Exemption
• National development
WAY FORWARD
18
Developing Uganda Together
Website: ura.go.ug. URApage
@uraugandaEmail: [email protected] Centre: 0800117000/ 0417444602/3Our nearest URA Service Office
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Saturday, April 15, 2023