VALUE ADDED TAX

VAT is an indirect tax on consumption, charged on value added to “taxable” goods and services, at
different stages in the chain of distribution. It is charged on both local supplies and imports.
Value Added Tax (VAT) was introduced in Uganda in July 1996 to replace Sales Tax and Commercial
Transactions Levy (CTL).
The law that introduced VAT was the VAT Statute No. 8 of 1996 and in 2001, the statute was changed
to VAT Act, chapter 349 of laws of Uganda.
Advantages
i. As compared to other taxes, there is a less chance of tax evasion. VAT minimises tax evasion
due to its catch-up effect or self policing mechanism
ii. VAT is simple to administer as compared to other indirect taxes
iii. VAT is transparent and has minimum burden to consumers as it is collected in small fragments
at various stages of production and distribution
iv. VAT is based on value added not the total price. So price doesn’t ordinarily increase because
of VAT
v. There is mass participation of tax payers thus widening the tax base
Disadvantages
i. It is costly to implement as it is based on full billing system. In order for tax payers to benefit
they have to provide tax invoices for all the supplies made and this adds an extra cost to the
business
ii. VAT is relatively complex to understand. The calculation of Value added in every stage is not
an easy task
iii. To implement the VAT successfully, customers need to be conscious otherwise tax evasion will
be widespread
Definition of Key Terms
Meaning of output and input VAT
VAT payable/(claimable) is determined by deducting input VAT from output VAT, That is, VAT
payable/(claimable) =Output VAT (X) — Input VAT (Y)
The understanding of VAT is, therefore, centred on the two terms Output VAT and Input VAT and how
they are computed.
Output VAT is VAT charged on taxable sales/supplies by taxable persons. VAT registered persons are
the only ones that can charge VAT on their supplies to customers. Taxable persons who are not VAT
registered cannot charge VAT but will be required to account for output VAT on their supplies, that is,
their supplies will be deemed to be VAT inclusive.
Input tax
Is VAT a person is charged on purchases and expenses on a business both in Uganda and imported.
A taxable person is a person registered for VAT from the time the registration takes effect and a
person who is not registered, but who is required to apply to be registered or to pay VAT who becomes
a taxable person from the beginning of the tax period immediately following the period in which the duty
to apply for registration or to pay tax arose.
Exempt supply
Is a supply of goods or services not subjected to tax as specified in the Second Schedule of the VAT
Act Cap 349. No tax is charged on exempt supplies and their value is disregarded in determining
whether the value of supplies made by a person exceeds the annual registration threshold.
The making of exempt supplies does not yield any revenue to the government (but does not require
refund of input tax) and will usually be restricted and any person who makes supplies cannot obtain
relief from VAT suffered on supplies made to him.
Taxable Supply
Is a supply of goods and, or services, other than an exempt supply, made by a taxable person for
consideration including a payment in cash or kind, as part of his /that person’s business activities.
Business activity excludes activities of a person carried on as a hobby or leisure.
A taxable supply is subject to VAT at the standard rate of 18 %, a Zero rated and 5% VAT on sale of
residential properties.
This cover,
 Every taxable supply in Uganda made by a taxable person
 Every import of gods other than an exempt import and
 The supply of any imported services by any person other than an exempt service.
Zero rated supply
Is a supply of goods or services which attract VAT at a zero rate as specified the Third Schedule of the
VAT Act Cap 349.
The value of zero-rated supplies will be taken into the computation to determine whether the supplier is
a taxable person who is required to be registered. Registered persons making zero rated supplies are
able to recover their input tax and usually find themselves in a refund position and Government earns
no revenue from zero rated supplies.
Standard rated supply
Is a supply of goods or services which is not exempt or zero rated supply. The VAT rate is 18%.
Exempt import
An import of goods and services is an exempt import if the goods are either exempt from customs duty
under the Fifth Schedule of the East African Community Customs Management Act 2004 or would be
exempt had they been supplied in Uganda.
Taxable value
It is the total consideration or price for a particular supply; this could be in cash or kind. This is therefore
the tax base upon which the VAT rate is applied to compute VAT.
VAT Fraction
This means the fraction calculated in accordance with the formula
r_
`r+100 in which formula “r” is the rate of tax applicable to the taxable supply.

Administration of VAT
VAT is currently handled by the domestic taxes department that administers both VAT and Income tax.
There are currently no specialised teams to handle VAT.
VAT REGISTRATION
VAT Registration is a process of getting eligible persons listed or recorded on the VAT Register of the
URA.
A person is require to apply to be registered
 within twenty days of the end of any period of three calendar months if during that period the
person made taxable supplies, the value of which exclusive of any tax exceeded one-quarter of
the annual registration threshold (37.5M). VAT Threshold refers to the minimum level of
taxable turnover above which a person is obliged to register for VAT. The annual threshold is
currently one hundred and fifty million Shillings shs.150 million. This may be determined on a
quarterly basis. i.e. shs.37.5 million in any three consecutive months.
 At the beginning of any period of the three calendar months where there are reasonable
grounds to expect that the total value excluding of any tax of taxable supplies to be made by
the person during that period will exceed one quarter of the annual registration threshold or
  At the beginning of any tax period of more than three calendar months where there are
reasonable grounds to expect that the total value exclusive of any tax of taxable supplies to be
made by the person will exceed the annual threshold.
Turnover:
Is the total taxable value (sales) of both goods and services excluding the VAT
Requirements for VAT registration:
 The applicant must have a fixed place of abode or business
 The applicant should be able to keep proper books of accounts
 The applicant should be able to submit regular and reliable tax returns
 The applicant should be a fit and proper person.
 The applicant must fill in an application form VAT 103 (Application for VAT Registration).
VOLUNTARY REGISTRATION:
Voluntary registration is permissible under the law if the person’s taxable turnover is below the
registration threshold/ doesn’t meet the requirements for mandatory VAT registration. One will however,
have to satisfy Uganda Revenue Authority that his/her activities constitute a business for VAT
purposes. Such a person must be compliant with all the VAT requirements and must remain on the
register for two years before they can be deregistered.
Benefits of Voluntary Registration
 Eligibility to claim input VAT
 Easy access to government contracts
 Increased business opportunities from VAT registered customers who would like to claim input
tax
Upon application for registration, the applicant will be entitled to:
 Certificate of registration
 Notification of refusal to be registered
 Input tax credit on both capital goods and trading stock at hand on the effective date of
registration provided they were purchased not more than six months.
 Notification of accepting registration
 VAT number
DEREGISTRATION
Cancellation of a registered person from the VAT register arises through two ways.
i. Upon application in writing by the taxpayer
ii. On the initiative by the Commissioner General even if the taxpayer does not apply.
The Commissioner General initiates deregistration of persons who don’t apply to be deregistered when
the Commissioner General is satisfied that they were not required to apply for registration.
Cancellation of Registration
Cancellation is immediate if one ceases to deal in taxable supplies.
In any other case say fall in turnover or just other challenges, it can only be considered after two years
from date of effective registration
The Commissioner General may initiate deregistration under the following circumstances:
a) When taxpayer has no fixed place of abode or business premises.
b) Taxpayer has no proper accounting / business records for the business carried on
c) Taxpayer does not submit regular and reliable tax returns.
d) Taxpayer is not fit and proper in the opinion of the Commissioner General
Cancellation of Compulsorily Registered Taxpayers
This can occur under two major ways;
(a) When one ceases to make taxable supplies.
 This may occur under the following circumstances.
Change of nature of business, from taxable supplies to exempt.
Re-categorization of supplies, from taxable to exempt e.g. Road construction works changed from
being taxable to exempt effective first July 2004.
(b) Decline in turnover.
This is a two way test. What is considered is the turnover in the last three months and last twelve
months.
A person therefore qualifies for de-registration if:
Taxable turnover excluding VAT in the last 3 months no longer exceeds 25% of the threshold (currently
37.5 million) And Taxable turnover excluding VAT in the last 12 months no longer exceeds 75% of the
threshold (currently 112.5 million).
Effective Date of Deregistration:
Cancellation of registration takes effect at the end of the period (month) in which the registration was
cancelled. E.g. if cancellation is made on 20th June 2007, cancellation would be effective 30th June
2007.
Outstanding Obligations at the date of Deregistration:
There are times when a person applies for deregistration but there are outstanding obligations.
Examples of such outstanding obligations may include;
a) Un-lodged tax returns, the person intending to deregister will be required to declare.
b) Unpaid tax (VAT arrears), the concerned taxpayer would have to clear them.
c) VAT liability on goods (both capital & stock) outstanding at the effective date of
deregistration, provided input tax on such goods had been claimed.
The value of such goods in (c) above is the fair market selling price.
SUPPLY OF GOODS AND SERVICES
Supply of Goods
This means;
a) An arrangement where the owner parts or will part with the possession of the goods. It includes
an agreement of sale or purchase i.e. irrespective of whether goods have changed hands or
not, or a lease.
b) The application of goods to own use. application to own use", in relation to goods or services,
means applying the goods or services to personal use, including personal use by a relative, or
any other non-business use;
Supply of Services
This refers to supply of anything which is not supply of a good or money. It includes the following:
a) Performance of services for another person. For example, Accounting, legal, architectural
designing, and other services performed by other professionals, consultants, brokers and
agents.
b) Availing of any facility or advantage. For example, facilities for hire (halls, tents, gardens, etc).
c) The toleration of any situation, or the refraining from the doing of anything. For example
surrender of any rights to stay (in/at), use or enjoy any facility or moment.
d) The provision of Electrical, Thermal energy, Heating, Gas, Refrigeration, Air conditioning or
water.
Exception:
Supply of services by an employee to an employer by reason of employment is not a supply of services
for VAT purposes.
Supply by an Agent.
There are two types of agents.
(a) Agents who are dependent on the principal. These are agents whose actions or operations are
dictated by the principal. These are mainly commission earners.
(b) Agents who are independent of the principal. These are persons who are entrusted with supplying
goods or services of another person but whose decisions are not dictated by the principal. These
usually benefit through discounts and not commission.
Supplies (goods or services) made by an agent on behalf of the principal (one who is dependent on the
principal), is a supply by the principal and not the agent. This refers mainly to commission agents.
However agency services provided by the agent to principal are counted on the agent. That is; the
agent will not be held accountable for goods or services sold on behalf of the principal but will be held
accountable for commission earned from the principal for the agency services.
Place of Supply
To be within the VAT system ,a supply must be made in Uganda. Supplies made outside Uganda are
outside the scope of VAT. Separate rules apply for determining the place of supply for goods and
services. These are;
(a) Goods;
A supply of goods shall take place in Uganda if the goods are delivered or made available in Uganda by
the supplier, or if the delivery or making available involves transportation, the goods are in Uganda
when the transportation commences. Supply takes place where the goods are delivered or made
available by the supplier.
b) Services: A supply of services shall take place in Uganda if the business of the supplier from which
the services are supplied is in Uganda. A supply of services shall take place in Uganda if the
recipient of the supply is not a taxable person and –
(a) the services are physically performed in Uganda by a person who is in Uganda at the time of supply;
(b) the services are in connection with immovable property in Uganda;
(c) the services are radio or television broadcasting services received at an address in Uganda;
(d) the services are electronic services delivered to a person in Uganda at the time of supply;
(e) the supply is a transfer, assignment, or grant of a right to use a copyright, patent, trademark or
similar right in Uganda; or
(f) the services are telecommunication services initiated by a person in Uganda other than a supply
initiated by –
(i) a supplier of telecommunications services; or
(ii) a person who is roaming while temporarily in Uganda. Takes place where the services are rendered.
The person who initiates a supply of telecommunications services shall be the person who first does
any of the following – the person who controls the commencement of the supply; pays for the services;
contracts for the supply; or the person to whom the invoice for the supply is sent.
A supply of thermal or electrical energy, heating, gas, refrigeration, air conditioning or water takes place
where the supply is received.
Imports. An import of goods takes place –
(a) where customs duty is payable, on the date on which the duty is payable; or
(b) in any other case, on the date the goods are brought into Uganda.
Time of Supply:
This refers to date on which a supply is deemed to have taken place. The purpose of time of supply is
to guide in determining the tax point. Tax point determines the VAT period in which output tax should
be accounted for and credit for input tax be taken.
Tax Point
This is the point at which the transaction becomes taxable which is at the time of delivery of the
excisable products.
There are different provisions for the different circumstances as detailed below.
No. Nature of Supply Time of supply
a. Goods / Services applied to own Date on which goods or services are first applied to own use
use
b. Supplies by way of gifts Goods: Date when ownership passes to the recipient.
Services: date when the performance of services is completed.
c. In case of Rental Agreements or The earlier of the following:
periodic payments e.g. rent and (i)Date when payment is due; and
monthly billed utilities (ii)Receipt of the payment for each successive payment.
d. Supply under Cash Basis Date when one receives cash to account for output or date when
one pays cash to account for input tax credit.
e. Ordinary (Usual) supply The earlier of the following:
invoice date
payment date
delivery date
F Import of goods For goods where import duty is payable, time of supply is the
date when the duty is payable.
Where duty is not applicable, time of supply is the date when
goods enter into the country.
Mixed supplies
Section 12 of the VAT act defines mixed supplies to mean
(a) A supply of services incidental to the supply of goods is part of the supply of goods
(b) A supply of goods incidental to the supply of services is part of the supply of services
(c) A supply of services incidental to the import of goods is part of the import of goods
Taxable supplies
A taxable supply is a supply of goods or services, other than an exempt supply, made in Uganda by a
taxable person for consideration as part of his or her business activities.
Note:
• The business activities of an individual do not include activities carried on only as part of a
hobby or leisure activities.
• A supply is made for consideration if the supplier directly or indirectly receives payment for the
supply, including any payment wholly or partly in money or kind.
• Application to own use (applying goods or services to personal use including personal use by a
relative, or any other non-business use) by a taxable person of goods supplied for business
purposes is regarded as a supply for consideration — at market value.
• Where goods have been supplied to a taxable person for business activities, the supply of
those goods for reduced consideration is regarded as a supply for consideration unless the
goods are supplied or used only as trade samples.
• A supply is made for reduced consideration if the supply is made between associates for no
consideration or between associates for a consideration that is less than the fair market value
of the supply.
• A supply of services by a foreign person for consideration as part of the person’s business
activities is treated as a taxable supply if the services are considered as taking place in
Uganda.
• Sale or disposal of a business asset other than an exempt supply by taxable person is a
taxable supply.
Public International Organisations (First Schedule)
• African Development Bank (ADB)
• African Development Foundation (ADF)
• African Export – Import Bank
• African Trade Insurance Agency African Union (AU)
• Aga Khan Development Network, Uganda, and the following agencies:–
(i) Aga Khan Foundation, Uganda;
(ii) Aga Khan Education Service, Uganda;
(iii) Aga Khan Health Service, Uganda;
(iv) Aga Khan Trust for Culture; and
(v) Aga Khan University, Uganda.
• Austrian Development Agency (ADA)
• Belgian Technical Cooperation (BTC)
• Danish International Development Agency (DANIDA)
• Foreign, Commonwealth and Development Office (FCDO)"
• International Development Law Organisation (IDLO)
• Desert Locust Control Organisation for Eastern Africa (DLCOEA)
• Deutsche Geselleschaft fur Internationale Zusammenarbeit (GTZ)
• Common Market for East and Southern Africa (COMESA)
• East African Community, its Organs and Institutions
• East African Development Bank (EADB)
• Eastern and Southern Africa Management Institute (ESAMI)
• European Union (EU)
• Food and Agricultural Organisation (FAO)
• French Development Agency (Agence Française de Development) (FDA)
• Global Fund to fight AIDS, Malaria and Tuberculosis Icelandic
• International Development Agency (ICEADA) IGAD Regional HIV and AIDS Partnership
Programme (IRAPP)
• International Atomic Agency (IAA)
• International Civil Aviation Organisation (ICAO)
• International Committee of the Red Cross (ICRC)
• International Criminal Court (ICC)
• International Labour Organisation (ILO)
• International Monetary Fund (IMF)
• International Organisation for Migration (IOM)
• International Telecommunications Union (ITU)
• International Union for Conservation of Nature Islamic Development Bank
• Japan International Cooperation Agency (JICA)
• Korea International Cooperation Agency (KOICA)
• Kreditanstalt fur Wiederaufbau (KFW)
• Medical Research Council Netherlands Development Organisation (SNV)
• Nile Basin Initiative Norwegian Agency for Development Cooperation (NORAD)
• Swedish International Development Agency (SIDA)
 • Uganda Red Cross Society Union of National Radio and Television Organisations of Africa
(UNRTNA–PEC)
• United Nations African Institute for the Prevention of Crime and the Treatment of Offenders
(UNAFRI)
• United Nations Children’s Fund (UNICEF)
• United Nations Development Programme (UNDP)
• United Nations Fund for Population Activities (UNFPA)
• United Nations High Commission for Refugees (UNHCR)
• United Nations Entity for Gender Equality and the Empowerment of Women (UN Women)
• United States Agency for International Development (USAID)
• Universal Postal Union (UPU)
• World Bank
• World Food Programme (WFP)
• World Health Organisation (WHO)
• World Meteorological Organisation (WMO)

A taxable supply comprises both standard rated supplies which are supplies charged to VAT at the
standard rate of 18% and zero rated supplies which are supplies chargeable at 0% (in effect no tax is
charged). Zero rated supplies are listed in the Third Schedule of the VAT Act.
Zero rated supplies (Third Schedule)
i. Supply of goods or services where goods or services are exported from Uganda as part of the
supply.
ii. Supply of international transport of goods or passengers and tickets for their transport.
iii. Supply of drugs and medicines.
iv. the supply of educational materials including educational materials manufactured in
a Partner State of the East African Community";
v. The supply of seeds, fertilisers, pesticides, and hoes.
vi. Supply of cereals, where the cereals are grown and milled in Uganda;
vii. the supply of sanitary towels, menstrual cups, tampons and the inputs for their
manufacture;.
viii. Supply of leased aircraft, aircraft engines, spare engines, spare parts for aircrafts and aircraft
maintenance equipment.
ix. The supply of handling services provided by the National Medical Stores in respect of
medicines and other medical supplies, funded by donors
Interpretations
Goods or services are treated as exported from Uganda if:
• in case of goods, the goods are delivered to, or made available at, an address outside Uganda
as evidenced by documentary proof acceptable to the Commissioner General; or
• in the case of services, the services were supplied by a person engaged exclusively in handling
of goods at a port of exit o were supplied for use or consumption outside Uganda as evidenced
by documentary proof acceptable to the Commissioner General
Export of Goods Regulation 12
i) Where goods are supplied by a registered taxpayer to a person in another country and the goods are
delivered by a registered taxpayer to a port of exit for export, the goods may be invoiced at the zero
rate, provided the registered taxpayer obtains documentary proof set out in this section and the goods
are removed from Uganda within 30 days of delivery to a port of exit.
ii) For an export transaction to qualify for zero-rating, a registered taxpayer shall obtain and be able to
show as proof of export for every export transaction the following:
• a copy of the bill of entry or export certified by the Customs authorities;
• a copy of the invoice issued to the foreign purchaser with tax shown at the zero rate;
• evidence sufficient to satisfy the Commissioner General that the goods have been exported, in
the form of an order from, or signed contract with, a foreign purchaser, or transport
documentation which identify the goods such as:
- transit order or consignment note issued by the Uganda Railways Corporation for goods
exported by rail;
- copy of a bill of lading for goods exported by water;
- copy of an airway bill for goods exported by air; or
- copy of a transport document for goods exported by road.
Export of Service Regulation 13
Where services are supplied by a registered taxpayer to a person outside Uganda, the services shall
qualify for zero rating only if the taxpayer can show evidence that the services are used or consumed
outside Uganda, which evidence can be in the form of a contract with a foreign purchaser and shall
clearly specify the place of use or consumption of the service to be outside Uganda or that the service
is provided for a building or premises outside Uganda.
International transport occurs where goods or passengers are transported by road, rail, water or air:
i) from a place outside Uganda to another place outside Uganda where the transport or part
of the transport is across the territory of Uganda;
ii) from a place outside Uganda to a place in Uganda;
iii) from a place in Uganda to a place outside Uganda.
Educational materials mean materials, whether printed or audio suitable for use only in public libraries
and educational establishments providing educational services.
Pesticides means insecticides, rodenticides, fungicides and herbicides but does not include pesticides
packaged for personal or domestic use.
c) Identification of taxable supplies
Supplies that are not listed as exempt supplies are ordinarily taxable supplies. Exempt supplies are
supplies of goods or services on which VAT is not chargeable at either the standard or zero rate. The
VAT Act specifies exempt supplies under second schedule. A person dealing in only exempt supplies
cannot be registered for VAT.
It is, therefore, important to know exempt supplies that are not subject to VAT and zero rated supplies
that are subject to VAT at a 0%, in order to identify standard rated supplies that are subject to VAT at
18%. In effect output, VAT is charged on standard rated supplies and these are supplies that are
neither exempt nor zero rated.
Exempt supplies include:
• the supply of livestock, unprocessed foodstuffs and unprocessed agricultural products except
wheat grain;
• the supply of postage stamps;
• the supply of financial services;
• the supply of:
- health insurance services (wef 1 July 2014)
- life insurance services (wef 1 July 2014)
- micro insurance services (wef 1 November 2014)
- re insurance services (wef 1 November 2014)
• the supply of unimproved land;
• a supply by way of sale, lease or letting of immovable property, other than:
- a sale, lease or letting of commercial premises;
- a sale, lease or letting of hotel or holiday accommodation;
- a sale, lease or letting for periods not exceeding three months;
- a sale, lease or letting of parking or storing cars or other vehicles; or
- a sale, lease of letting of service apartments
• the supply of educational services
• the supply of veterinary, medical, dental and nursing services
• the supply of social welfare services
• the supply of betting, lotteries, and games of chance;
• the supply of goods as part of the transfer of a business as a going concern by one taxable
person to another taxable person;
• the supply of burial and cremation services;
• the supply of precious metals and other valuables to the Bank of Uganda for the State
Treasury;
• the supply of passenger transportation services (other than Tour and Travel operators);
• the supply of petroleum fuels, subject to excise duty, (motor spirit, kerosene and gas oil), spirit
type jet fuel and kerosene type jet fuel and residual oils for use in thermal power generation to
the national grid;
• the supply of dental, medical and veterinary goods and for purposes of this paragraph goods
means:
- dental, medical and veterinary equipment;
- ambulances;
- contraceptives of all forms;
- maternity kits (mama kits);
- medical examination gloves;
- medicated cotton wool;
- mosquito nets, acaricides, insecticides, mosquito repelling devices; and :
- diapers.
-
• The supply of animal feeds and premixes
• The supply of raw materials and inputs for the manufacture of the following;
- disposable medical face masks or reusable face masks made of fabric
- medical boots
- medical impermeable aprons/overall suits
- cap, surgical, bouffant, non-woven;
- goggles, protective, indirect side ventilation
- infra – red thermometers
- motorized fumigation pumps
- oxygen cylinder or oxygen for medical use
- body bags
- biohazard bags
- container, used sharps, leak proof
- disinfectants
 - medical plastics or rubber gloves
- gas masks with mechanical parts
- disposable hair nets and
- paper bed-sheets
-
• the supply of machinery, tools and implements suitable for use only in agriculture, and for the
purposes of this sub paragraph “machinery, tools and implements” means:
- knapsack sprayers;
- ox ploughs;
- drinkers and feeders for chicken;
- agricultural tractors (including walking tractors);
- disk harrows;
- cultivators;
- ploughs;
- weeders;
- seeders;
- planters;
- subsoilers;
- seed drills;
- threshers;
- bale wrappers;
- milking machinery;
- Milk coolers;
- Maize mills;
- Wheat flour mills;
- Homogenisers;
- dairy machinery;
- grain cleaners and sorters;
- feed grinders, hatcheries; and
- implements used for artificial insemination in animals.
- Hullers
- Oil press
- Tillers
- Grain dryers
- Manure spreaders
- Fertilizer distributor
- Transplanters
- Juice presses and crushers
- Seed and grain shellers
- Silage chopper machines
- Color sorters for coffee
- Coffee roasters
• the supply of photosensitive semiconductor devices, including photovoltaic devices, whether or
not assembled in modules or made into panels, light emitting diodes, solar water heaters, solar
refrigerators and solar cookers;
• the supply of crop extension services;
• the supply of irrigation works, sprinklers and ready for use drip lines
• the supply of menstrual cups
• the supply of agricultural insurance premium or policy
• the supply of lifejackets, lifesaving gear, headgear and speed governors;
• the supply of bibles and Qu’rans and text books
• the supply of movie production
• the supply of services to conduct a feasibility study, design and construction; the
supply of locally produced materials for the construction of premises and other
infrastructure, machinery and equipment or furnishings and fittings to a hospital
facility developer whose investment capital is at least five million United States
Dollars and who develops a hospital with capacity to provide specialised medical care
• the supply of wet processing operations and garmenting, cotton lint, artificial fibres
for blending; polyster staple fibre, viscose rayon fibre yam other than cotton yam,
textile dyes and chemicals garment accessories, textile machinery spare parts,
industrial consumables for textile production, textile manufacturing machinery and
equipment;
• the supply of fabrics and garments made in Uganda by vertically integrated textile
mills that operate spinning, weaving/knitting, wet processing operations and
garmenting;
• The supply of all production inputs into iron ore smelting into billets and the supply
of billets for further value addition in Uganda;
• The supply of all production inputs necessary for processing of hides and skins into
finished leather products in Uganda and the supply of leather products wholly made in
Uganda;
• the supply of services to conduct a feasibility study, design and construction, the
supply of locally produced materials for the construction of premises and other
infrastructure, machinery and equipment or furnishings or fittings for technical or
vocational institute operators whose investment capital is at least ten million United
States Dollars in the case of a foreigner or one million United States Dollars in the
case of a citizen;
• the supply of imported drugs, medicines and medical sundries;
• the supply of imported mathematical sets and geometry sets used in educational
services; (ccc) the supply of woodworking machines;
• the supply of welding machines and sewing machines;
• supply of imported crayons, colored pencils, lead pencils, rulers, erasers, stencils,
technical drawing sets, educational computer tablets, educational computer
applications or laboratory chemicals for teaching science subjects used in educational
services.
• supply of cotton seed cake;
• the supply of the following services—
 (i) software and equipment installation services to manufacturers;
(ii) services incidental to tele-medical services; and
(iii) royalties paid in respect of agricultural technologies;
 the supply of accommodation in tourist hotels and lodges located up-country
 the supply of processed milk;
 the supply of locally developed computer software, its maintenance and software
licenses;
 the supply of services to conduct a feasibility study, design and construction; the
supply of locally produced materials for construction of premises, infrastructure,
machinery and equipment or furnishings and fittings which are not available on the
local market to a hotel or tourism facility developer whose investment capital is eight
million United States Dollars with a room capacity not exceeding 30 rooms; or to a
meetings, incentives, conferences and exhibitions facility developer whose investment
capital is not less than one million United States Dollars;
 the supply of liquefied gas and denatured fuel ethanol from cassava;
 the supply of assistive devices for persons with disability;
 the supply of airport user services charged by the Civil Aviation Authority".
• The list is not exhaustive and not numbered according to the act.
Interpretation
Education services means education provided by:
i. a pre-primary, primary, or secondary school;
ii. a technical college or university;
iii. an institution established for the promotion of adult education, vocational training, technical
education, or the education or training of physically or mentally handicapped persons.
Financial services means:
i) granting, negotiating, and dealing with loans, credit, credit guarantees and any security for
money, including management of loans, credit or credit guarantees by the granter
ii) transactions concerning deposit end current accounts, payments. transfers, debts, foreign
currency sales and purchases, cheques, and negotiable instruments, other than debt
collection and factoring;
iii) transactions relating to shares, stocks, bonds, and other securities, other than custody
services; and/or
iv) management of investment funds; but does not include provision of credit facilities under a
hire purchase or finance lease agreement.
Passenger transportation services means the transportation of fare-paying passengers, and their
personal effects by road, rail, water, or air, but does not include passenger transport services provided
by a registered tour operator.
Social welfare services means:
• care for the elderly, sick, and disabled, including care in a hospital, aged person’s home, and
similar establishments; or
• care and welfare services provided for the benefit of minors.
Transfer of a going concern includes the disposal of any part of a business which is capable of
separate operation.
The term “unprocessed” shall include low value added activity such as sorting, drying, salting, filleting,
deboning, freezing, chilling, or bulk packaging, provided where, except in the case of packaging, the
value added does not exceed 5% of the total value of the supply.
Taxation of rice
According to URA/VAT/PN2/I4 rice does not fall under unprocessed foodstuffs as it is usually
processed ready for human consumption and the processing value exceeds 5% of the value of the
supply. Also imported rice is standard rated.
Exempt Import Sec 20
An import of goods is an exempt import if the goods:
i) are exempt from customs duty under the Fifth Schedule of the East African Community
Customs Management Act, 2004; or
ii) would be exempt had they been supplied in Uganda.
d) Taxable Value of a Taxable Supply Sec 21
Taxable value of a taxable supply is the total consideration paid in money or in kind by all persons for
that supply.
The taxable value of goods by way of an application to own use and supply for reduced consideration is
the fair market value of the goods and services at the time of supply.
Where a taxable supply is made without separate amount of the consideration being identified as a
payment of tax, the taxable value of the supply is the total amount of the consideration paid excluding
tax. Use VAT fraction to get the tax component and amount exclusive of VAT.
The taxable value of a taxable supply of goods or services where the Government has provided a
subsidy is the consideration paid in money or in kind by all persons for that supply less the subsidy.
Taxable Value of an Import of Goods (Sec 23>
The taxable value of an import of goods is the sum of:
• the value of the goods ascertained for the purposes of customs duty under the laws relating to
customs (CIF);
• the amount of customs duty, excise tax, and any other fiscal charge other than tax payable on
those goods; and
• the value of any incidental services
Calculation of output VAT
Tax payable on a taxable transaction is calculated by applying the rate of tax (18%) to the taxable value
of the transaction.
VAT Formula
AxB
Where A is the taxable value of the supply
B is the VAT fraction
If amount is inclusive of VAT, a VAT fraction - 18/118 is used.
3. Treatment of input VAT
Input VAT is VAT paid on taxable business purchases both local and imports. The term purchases’ is
given a broader perspective and it covers expenditure on raw materials, capital goods, overheads,
goods bought for re-sale (stock) and other business expenditure. Only VAT registered persons are
entitled to claim VAT paid on their business purchases.
Output VAT charged by the taxable person (seller) to another taxable person (buyer) becomes input
VAT of the buyer.
Input VAT claim at the time of registration (Sec 28(3))
A taxable person on becoming registered for VAT is allowed credit for input VAT in respect of goods,
including capital assets, and all imports of goods including capital assets, made to the person prior to
becoming registered, where the supply or import was for use in the business of the taxable person,
provided the goods are on hand at the date of registration and the supply or import occurred not more
than six months prior to the date of registration.
Tax paid on Capital Goods and Stock on Hand (Regulation 3)
Where after the 1st July 1996, a person being registered has in stock plant and machinery and other
goods on which tax was paid prior to being registered, that person shall be entitled to claim a credit of
the tax on the goods which were purchased within four months before the date of registration, and in
the case of plant and machinery, within six months before the date of registration.
The six month period as provided for in the VAT Act is favourable to the taxpayer and should be
considered for all goods at hand at the time of registration.
Input tax credit (Sec 28)
The total amount of VAT paid on purchases which is allowable to the VAT registered person is included
in the relevant box in the monthly VAT r returns.
It is important to note the following:
The VAT credit will depend on the method of accounting used; under invoice basis, VAT credit is on all
invoices received in respect of all business supplies and imports while under cash basis it is on VAT
paid in respect of business supplies and imports.
A proper record of input tax is necessary to keep track of input tax claimed. The following documents
are required for one to claim input VAT credit:
- original tax invoice or simplified tax invoice, where applicable. The tax invoice must fulfill the
requirements as required under the Sec 29 VAT Act and not a receipt, proforma invoice or cash
sale; and
- certified Customs Bill of Entry or other document prescribed under the East African Customs
Management Act 2004, or URA receipt to substantiate a VAT paid at importation.
Where VAT has been paid and there are no proper support documents as highlighted above, no input
credit can be claimed unless the Commissioner General is satisfied that:
- the taxable person took all reasonable steps to acquire a tax invoice;
- the failure to acquire a tax invoice was not the fault of the taxable person; and
- the amount of input tax claimed by the taxable person is correct.
Where all of the taxable person’s supplies for that period are taxable supplies, the whole of the input tax
is claimed.
Where only part of the taxable persons supplies for that period are taxable supplies, input VAT amount
claimable is apportioned.
Tax Invoices Sec 29
A VAT registered supplier making a taxable supply to any person is required to provide to that other
person, at the time of supply, with an original tax invoice. The supplier shall retain one copy of the tax
invoice. Where a supplied person loses the original tax invoice, the supplier may provide a duplicate
copy clearly marked ‘COPY’. A tax invoice is an invoice containing the particulars as follows:
- the words ‘tax invoice” written in a prominent place;
- the commercial name, address, place of business, and the tax identification number of the
taxable person making the supply;
- the commercial name, address, place of business, and the tax identification number of the
recipient of the taxable supply;
- the individualized serial number and the date on which the tax invoice is issued;
- a description of the goods or services supplied and the date on which the supply is made;
- the quantity or volume of the goods or services supplied;
- the rate of tax for each category of goods and services described in the invoice; and either:
• the total amount of the tax charged, the consideration for the supply exclusive of tax and the
consideration inclusive of tax; or
 • the consideration for the supply, a statement that it includes a charge in respect of the tax and
the rate at which the toy: was charged
Simplified tax invoices
Notwithstanding the basic requirements in respect of tax invoices, as specified above, registered
persons with a taxable turnover below 100 million shillings per annum may issue a simplified tax invoice
for taxable supplies made to another registered person, provided the value of any individual item on the
invoice does not exceed 50,0001= and the total invoice does not exceed 100,000.
A simplified tax invoice shall contain the following particulars:
• the commercial name, address, tax identification number and registration number of the person
making the supply;
• the date the invoice is issued;
• the description of the goods;
• the quantity of the goods; and
• the value of the supply inclusive of tax and a statement that tax is included in the price.
Zero-rated supplies and exempt supplies shall not be included on a simplified tax invoice.
Non-allowable input VAT
A taxable person shall not qualify for input tax credit in respect of a taxable supply or import of:
• A passenger automobile, (a road vehicle designed solely for the transport of sitting persons
like station wagons — Pajeros, land cruisers and saloon cars) and the repair and maintenance
of that automobile, including spare parts, unless the automobile is acquired by the taxable
person exclusively for the purpose of making a taxable supply of that automobile in the ordinary
course of a continuous and regular business of selling or dealing in the or hiring of passenger
automobiles,
• Entertainment (provision of food, beverages, tobacco, accommodation, amusement,
recreation or hospitality of any kind, (such as provided by hotels) unless the taxable person:
- is in the business of providing entertainment: or
- supplies meals or refreshments to his or her employees in premises operated him or or on his
behalf, solely for the benefit of his or her employees.
• Telephone services - to the extent of 10% of the input tax on those services. The 10 %
applies to the VAT component and not the total value of the bill. When the amount relating to
telephone are VAT inclusive in computing the VAT component using the VAT fraction, there is
need to remove excise duty. Mobile phones are subject to excise duty at 12% (hence, use
18/130) and land lines are subject to excise duty at 5% (hence, use 18/123). Internet bills are
not restricted.
• Nonbusiness use - where a taxable supply or import by a taxable person is partly for business
use and partly for another use, input tax allowed is that part of input VAT that relates to
business use. For example, where security guards are hired to provide security at a company
and premises as well as MD’s home only input VAT relating to company premises can be
claimed.
a) Treatment of unclaimed VAT and disallowed VAT
• Input VAT can only be claimed by VAT registered persons and only on allowable expenditure.
Where input VAT is claimed, it does not form part of the expenditure, be it an asset acquisition
or a revenue expense.
• For entities that are not VAT registered, VAT on all purchases will be expensed as part of the
relevant expense or capitalised as part of cost of the relevant asset.
 • The same treatment applies for items where VAT cannot be claimed because it is prohibited,
for example, for passenger automobile, where there are no proper support documents, input
tax is apportioned and for any other reason.
• Where input VAT that was claimed by a taxable person is disallowed, the amount disallowed is
expensed and becomes an allowable expense for corporation tax purposes.
b) VAT on imported services
VAT Act imposes VAT on the supply of imported services, other than an exempt service, by any
person. VAT in case of a supply of imported services, other than an exempt service, is to be paid by the
person receiving the supply. Imported services are not defined but an import of services ordinarily
occurs where s person receives a supply of services from a foreign supplier.
A person who receives imported services other than an exempt service shall account for the tax due on
the supply, and the taxpayer shall account for that service when performance of the service is
completed, or when payment for the service is made, or when the invoice is received from the foreign
supplier, whichever is the earliest.
The value for calculating the amount of tax payable shall be the taxable value of the supply determined
under section 21 of the VAT act and the person receiving the services shall apply the tax rate to the
taxable value to calculate the tax due; and he shall enter both the value and the tax calculated in his
Tax Return.
The above, therefore, makes VAT on imported services output VAT in the person’s return, This is
irrespective of whether one is a VAT registered person. Effective 1 July 2011 there is no corresponding
input VAT on imported services.
If a taxable person is undertaking business both in Uganda and outside Uganda and there is internal
provision of services from the part outside Uganda to the part in Uganda:
• The part of business carried outside Uganda is treated as if it were carried on by a person
(overseas person) separate from the taxable person.
• The overseas person is not a taxable person.
• The internal provision of services is treated as a supply of services made outside Uganda by
the overseas person to the taxable person for reduced consideration.
Supplies made for reduced consideration are deemed to be made at market value and are taxable. So,
in his case internal provision of services by the overseas person becomes imported services to the part
in Uganda.
Method of accounting for VAT
Invoice Basis Accounting (Sec 26)
Normal accounting method for VAT or the default method is invoice basis (related to accruals
accounting). Under this method, Output VAT is accounted for on the basis of tax invoices issued and
input tax is claimed on the basis of tax invoices received irrespective of whether payment has been
made or not.
Advantage of invoice basis accounting
 A taxpayer can claim input tax before payment is made which improves the person’s cash flow
position.
Disadvantages of invoice basis accounting
 Output tax payable before payment is received from customers resulting in cash flow problems.
 Even in cases where customers fail to pay and the amount becomes a bad debt, VAT is payable/paid
to URA yet payment has not been received
 It takes time to get a relief for VAT on bad debts written off, that is, available after two years and on
application to the CG
 Where the VAT relief on bad debts is not granted by URA, the tax payer would suffer a bigger loss
because on top of the bad debt written off, the VAT component would have been paid to URA

Cash Basis Accounting

This applies to a taxable person, the annual value of whose taxable supplies does not exceed five
hundred million shillings; or a supplier who supplies goods or services to Government." (effective
1/July/2022).
Cash basis method of accounting for VAT is only used on application to CG if annual turnover- does not
exceed UShs 500 million (effective 1 July 2015). Formerly the amount was UShs 200m. Under this
method, Output VAT is accounted for on the basis of sales receipts and input tax is claimed on the
basis of tax invoices that have been paid.
A taxable person who has made an election to account for VAT on a cash basis determines the tax
payable for a tax period according to the formula S – T = output tax – input tax
S is the total output tax received by the taxable person during the tax period in respect of taxable
supplies made by the person; and
T is the total input tax credit allowed to the taxable person in the tax period.
An election made remains in force until
 Withdrawn by the taxable person by notice in writing to the CG or
 The CG by notice in writing to the taxable person
Advantages of Cash basin accounting,
 Output tax is payable only on cash sales/ receipts hence the taxpayer will not experience cash
flow problems.
 In cases where customers fail to pay, the customer never pays the output tax to URA.
Disadvantages of cash basis accounting
 Input tax is not claimed until the taxpayer makes payment for the purchases.

VAT RETURN AND PAYMENT OF TAX

VAT RETURN:
A taxable person shall lodge a tax return with the Commissioner General for each tax period within
fifteen days after the end of the period.
A tax return shall be in the form prescribed by the Commissioner General and shall state the amount of
tax payable for the period, the amount of input tax credit refund claimed, and such other matters as
may be prescribed.
In addition to any return required, the Commissioner General may require any person, whether a
taxable person or not, to lodge (whether on that person's own behalf or as agent or trustee of another
person) with the Commissioner General such further or other return in the prescribed form as and when
required by the Commissioner General for the purposes of VAT Act.
Upon application in writing by a taxable person, the Commissioner General may, where good cause is
shown by the taxable person, extend the period in which a tax return is to be lodged.
Amended return
Where a person is not satisfied with a return lodged by that person, that person may apply to the
commissioner to make an addition or alteration to the return. This is called the amended return. An
application to amend the return shall be in writing and shall specify in details the grounds upon which it
is made and shall be made within three years after the date on which the turn was lodged by the person
Assessments
 Where –
(a) a person fails to lodge a return;
(b) the Commissioner General is not satisfied with a return lodged by a person; or
(c) the Commissioner General has reasonable grounds to believe that a person will become liable to
pay tax but is unlikely to pay the amount due,
the Commissioner General may make an assessment of the amount of tax payable by that person.
 An assessment where fraud, or gross or wilful neglect has been committed by, or on behalf of,
the person, may be made at any time; or in any other case, shall be made within 5 years after
the date on which the return was lodged by the person.
 The Commissioner General may, based on the best information available, estimate the tax
payable by a person for the purposes of making an assessment
 Where a person is not satisfied with a return lodged by that person under the VAT Act, that
person may apply to the Commissioner General to make any addition or alteration to the return.
An application shall be in writing and shall specify in detail the grounds upon which it is made
and shall be made within three years after the date on which the return was lodged by the
person. After considering an application, the Commissioner General shall make an assessment
of the amount that, in the Commissioner General’s opinion, is the amount of tax payable.
 Where an assessment has been made, the Commissioner General shall serve notice of the
assessment on the person assessed, which notice shall state –
(a) the tax payable;
(b) the date the tax is due and payable;
(c) an explanation of the assessment; and
(d) the time, place, and manner of objecting to the assessment.

The Commissioner General may, within the time limits set, amend an assessment as the Commissioner
General considers necessary, and the Commissioner General shall serve notice of the amended
assessment on the person assessed.
The time limit for amending an assessment is –
(a) where fraud, or gross or wilful neglect has been committed by, or on behalf of, the person
assessed in respect of the period of assessment, any time; and
(b) in any other case, within 3 years after service of the notice of assessment.
An amended assessment is treated in all respects as an assessment
Powers and duties of the commissioner
The commissioner or any officer authorised in writing by the CG
i. shall have at all times during the working hours and without any prior notice to any person,
full and free access to any premises, place, book, record or computer
ii. may make an extract or copy from any book, record, or computer stored information to
which access is obtained under i.
iii. may seize any book or record that, in his or her opinion affords evidence that may be
material in dertermining the liability of any person
iv. may retain any such book or record for as long as is required for determining the persons
liability or for any proceeding under the act
v. may where a hard copy or computer disk of information stored on a computer is not
provided, seize and retain the computer for as long as is necessary to copy the information
required.
The commissioner may by notice in writing require any person whether or not liable for tax to;
• furnish any information that may be required by the notice, or
• attend at the time and place designated in the notice for the purpose of being examined on
oath by the CG or by an officer authorised by the CG concerning tax affairs of the person
or any other person and for that purpose the CG or authorised officer may require the
 person examined to produce any book, record or computer stored information in the control
of the person
Tax Period
The period covered by the return is called a tax period and is normally one calendar month.
Payment of Tax:
Tax is paid by either cheque, cash or credit transfer to designated banks. It is paid for a VAT return on
the date the return any other must be lodged, in case of an assessment on the date specified in the
notice of assessment and in case the date the taxable transaction occurs. Date of payment can be
extended if a taxable person makes an application, to URA giving proper reasons and provides proper
arrangements to pay the tax. Tax not paid is a debt due to government.
Tax Refund and offsets:
There are circumstances where tax (VAT) is refunded to tax payers. These are:
(a) When input tax is greater than output tax. For example if for a given period the input tax is
Shs.500,000 and output tax is Shs.300,000, then the difference of Shs.200,000 would be
refunded to the tax payer. If, for any tax period, a taxable person's input tax credit exceeds his
or her liability for tax for that period, the Commissioner General shall refund him or her the
excess within one month of the due date for the return for the tax period to which the excess
relates, or within one month of the date when the return was made if the return was not made
by the due date.

(b) When a tax payer pays more than what was supposed to be paid. The excess is refunded.
For example if one pays Shs.1,000,000 and it is discovered that the true tax was supposed to
be Shs.900,000, then the excess of Shs.100,000 is refunded. A person may claim a refund of
any output tax paid in excess of the amount of tax due for a tax period. A claim for a refund
shall be made in a return within three years after the end of the tax period in which tax was
overpaid. Where a person has claimed a refund and the Commissioner General is satisfied that
the person has paid an amount of tax in excess of the amount of tax due, the Commissioner
General shall refund immediately the excess to the taxable person.
(c) When there is a proven bad debt. A bad debt for VAT refund considers the following; Should
have been outstanding for a period of at least two years. There should be proof that all
necessary steps were taken to recover the money to no avail. Where a taxable person has
supplied goods or services for a consideration in money, and has – paid the full tax on the
supply to the Commissioner General, but has not within two years after the supply received
payment, in whole or in part from the person to whom the goods or services are supplied; and
taken all reasonable steps to the satisfaction of the Commissioner General, to pursue payment
and he or she reasonably believes that he or she will not be paid, that person may seek a
refund of that portion of the tax paid for which he or she has not received payment. If a refund
is taken and the taxable person later receives payment in whole or in part, in respect of the
debt, he or she shall remit to the Commissioner General, with his or her next tax return, a sum
equal to the portion of the payment that represents the tax refunded. A registered supplier who
fails to remit the tax in his or her next return, commits an offence and is liable on conviction to a
fine not exceeding five hundred thousand shillings, in addition to the payment of the full amount
of the undeclared tax plus a penal tax on that outstanding tax calculated at the rate specified in
the Fifth Schedule.
(d) When one loses the stock through fire, burglary and any other proven methods. If for any tax
period taxable supplies in stock or stock in transit are lost due to theft, fire, accident, or force
majeure and input tax has been paid on those goods, the Commissioner General may grant a
refund or allow credit for the input tax paid on those goods if there is evidence that the goods
are destroyed or lost and cannot be recovered.
The refund is supposed to be paid within thirty (30) days beyond which interest accrues.
The law provides for automatic offsets for shillings five (5) million and below. The Commissioner
General – shall, where the taxable person’s input credit exceeds his or her liability for tax for that period
by less than five million shillings, except in the case of a licensee or person providing mainly zero rated
supplies, offset that amount against the future liability of the taxable person; and may, with consent of
the taxable person, where the taxable person’s input credit exceeds his or her liability for tax for that
period by five million shillings or more, offset that amount against the future liability of the taxable
person, or apply the excess in reduction of any other tax not in dispute due from the taxpayer.
Where a person claiming a refund is required by the Commissioner General to provide accounts or
records to substantiate the claim and fails to do so in a manner satisfactory to the Commissioner
General within seven days of being requested, the time period for making the refund shall not be
binding on the Commissioner General. The Commissioner General shall serve on a person claiming a
refund a notice in writing of a decision in respect of the claim.
No refund shall be made in relation to a taxable supply that has been made to a person who is not a
taxable person, unless the Commissioner General is satisfied that the amount of the excess tax has
been repaid by the taxable person to the recipient, whether in cash or as a credit against an amount
owing to the taxable person by the recipient

PENALTIES
Penal tax under VAT (Sec 65)
a) Failure to apply for VAT registration ( Sec 65(1))
A person who fails to apply for registration as required by the VAT Act is liable to pay a penal tax equal
to double the amount of tax payable during the period commencing on the last day of the application
period until either the person files an application for registration with the Commissioner General or the
Commissioner General registers the person.
b) Failure to Lodge or file a VAT return (Sec 65(2))
A person who fails to lodge a return within the required time under the VAT Act is liable to pay a penal
tax amounting to whichever is the greater of the following:
(i) two hundred thousand shillings; or
(ii) an interest charge for the period the return is outstanding calculated according to the
formula specified in the Fifth Schedule.
According to the fifth schedule, VAT Act, the rate of interest chargeable as penalty is 2% per
month, compounded.
c) Failure to pay tax under VAT Act (Sec 65(3))
A person who fails to pay tax imposed under the VAT Act on or before the due date is liable to pay a
penal tax on the unpaid tax at a rate specified in the Fifth Schedule for the tax which is outstanding. –
2% per month compounded. If a person pays a penal tax and the tax to which it relates is found not to
have been due and payable by the person and is refunded, then the penal tax, or so much of the penal
tax as relates to the amount of the refund, shall also be refunded to that person.
d) Failure to maintain proper records (sec 65(5))
A person who fails to maintain proper records in a tax period in accordance with the requirements of the
VAT Act is liable to pay a penal tax equal to double the amount of tax payable by the person for the tax
period.
e) Misleading statement or Declaration (Sec 65(6))
Where a person knowingly or recklessly makes a statement or declaration to an official of the Uganda
Revenue Authority that is false or misleading in a material particular; or omits from a statement made
to an official of the Uganda Revenue Authority any matter or thing without which the statement is
misleading in a material particular, and
(i) the tax properly payable by the person exceeds the tax that was assessed as payable
based on the false or misleading information;
(ii) the amount of the refund claimed was false; or
(iii) the person submitted a return with an incorrect offset claim, that person is liable to pay
penal tax equal to double the amount of the excess tax, refund or claim.
Rights of the Taxpayer
• You have a right to equity. Tax laws and procedures shall be applied consistently to you. All
your tax affairs handled with impartiality. You and your agent(s) shall be presumed honest until
proven otherwise You shall always pay the correct tax
 • Your tax affairs shall be kept secret and tax information in our possession shall be used in
accordance with the law.
• You and your authorized agent(s) shall be provided with clear, precise and timely information
• You will receive courteous and professional services at all times
• You will receive timely, clear and accurate responses to your enquiries ,complaints/requests.
• To be availed with reasons for decisions taken
• To be sensitized about your tax obligations.
• Your tax objections shall be attended to in accordance with the relevant laws& procedures.
• You shall be facilitated to exercise your right(s) of appeal both within the organization and to
an independent tax tribunal in accordance with the law.
• You shall given prior notice whenever your premise(s) are to be subjected to routine
inspection or if an audit is to be conducted.
• Your tax account shall be promptly updated for the tax paid.
• We shall maintain an updated database of your tax records.
• Where a tax refund is due to you, we shall process it within the prescribed time limits under
the laws subject to budget refund limits.
• We shall process your tax returns, entries and other documents relating to your tax affairs as
stipulated under the relevant laws.
• We shall offer you Excellent customer care by; Being courteous to you Offering ourselves for
constructive criticism and advice from you at all times
• Receiving and acting promptly on all complaints made against our officers in accordance with
the URA staff code of conduct.
Taxpayer Obligations
• Ensure that you voluntarily register with Uganda Revenue Authority as a Taxpayer.
• File correct Tax Returns, Customs Entries or any forms relating to taxes and other revenue.
• Pay the correct tax at the right time and place as required by the relevant laws.
• In handling your tax matters, you and or your appointed agent(s) shall be expected to deal and
cooperate only with the Authority's authorised staff.
• Be honest with URA.
• Treat URA staff fairly and with courtesy.
• Let URA know if you need an interpreter.
• Quote your Taxpayer Identification Number(TIN) for all dealings with URA.
• Comply with all the taxation requirements and regulations.
• Make full disclosure of information and correct declaration of all transactions at all times.
• Do not indulge in any form of tax evasion and other illegal practices.
• When you are importing or exporting cargo you may wish to use the services of a licensed
customs agent to complete Customs entries and related clearance formalities.
• When you are travelling ensure that you have accurately completed all the necessary forms
before you reach the arrival/departure processing point.
• Be ware of and comply with customs quarantine, wildlife, currency and passenger concession
requirements.
• Declare your goods on arrival and have them ready for inspection.