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UGANDA: Proposed tax changes and the story behind the bills

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This is a long 29 page document that is available as a PDF file for those who want it via email MARTHA LEAH NANGALAMA or you can just read it online now.  The document was prepared by a law firm in Uganda.


As the current financial year draws to a close on 30th June 2018, the country waits with bated breath the budget
speech for the financial year 2018/19 to be read by 15th June 2018. The budget framework paper containing
government budget strategy and the recently published tax bills being deliberated by Parliament before passage
into law are giving some clues on what the final budget document may contain.

Government spending for the financial year 2018/19 will increase from 19 trillion to over 22 trillion with signifi-
cant outlay on public infrastructure and related interest payments. The country’s resource envelope must how-
ever rise to achieve this expenditure. Tax collections for the financial year 2018/19 are projected to increase from

14 trillion to 16 trillion. The projections notwithstanding, we would like to note that the actual tax collections for
the financial year 2017/2018 are underperforming.
The ratio of Uganda’s tax collections as a percentage of Gross Domestic Product (GDP) has stagnated at under
13% for the past 5 years against the International Monetary Fund (IMF) recommended benchmark of 24%.The
Government hopes to increase this ratio to 14% in the coming year but cynics have their doubts. Tax impositions
or increments in the past have not necessarily improved this ratio and a viewpoint is emerging that government
may have to invest in changing the structure of the economy. Though reforms in tax administration over the years
have been solid and lauded, they are yet to yield the expected results.
Draft bills with tax proposals aimed at increasing domestic tax revenues are now in the public domain. These are:
• The Value Added Tax ( Amendment) Bill, 2018;
• The Income Tax ( Amendment) Bill, 2018;
• The Excise Duty ( Amendment) Bill, 2018;
• The Lotteries and Gaming ( Amendment) Bill, 2018;
• The Stamp Duty ( Amendment) Bill, 2018;
• The Tax Appeals Tribunal ( Amendment) Bill, 2018;


• The Tax Procedures Code ( Amendment) Bill, 2018;
• The Traffic and Road Safety Act 1998 ( Amendment) Bill, 2018;
Proposed changes to the East African Community Customs Management Act, 2004 (EACCMA) are yet to be
finalized by the East African Community Secretariat. We will share these once they are available in the public
These bills will go through 3 stages of reading in Parliament before assent to by the President to have the force of
law. The commencement date for the proposed tax changes is 1st July 2018 though based on past experience the
legislative process of enacting tax laws usually goes past 1st July. We therefore anticipate that a Tax and Duties
(Provisional Collection) Order may be issued by 1st July 2018 in case the bills are not yet finalized dealing with the
transitional period. This order confers the authority of law on these bills for a period of 4 months until enactment.
It is also possible there could be some changes to the final Acts once passed.
This publication provides an expansive discussion of the proposed amendments affecting both direct and indirect
taxes for the financial year 2018/19 and where possible highlighting their implications. Though the introduction
of a ‘social media tax’ and the prohibition of importation of cars older than 8 years from the date of manufacture
have attracted greater public attention, there are other sweeping changes that these bills propose.

Uganda’s proposed tax changes for the year 2018_2019


—— AUTO – GENERATED; Published (Halifax Canada Time AST) on: May 04, 2018 at 08:56AM

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