TAXATION HANDBOOK

A Guide to Taxation in Uganda

© Uganda Revenue Authority 2020
Second published 2017
First published 2011

All rights reserved. No part of this publication may be reprinted

or reproduced or utilized in any form or by any means, electronic,
mechanical or other means now known or hereafter invented,
including copying and recording, or in any information storage
or retrieval system, without permission in writing from Uganda
Revenue Authority.

Layout, design: ……….

ISBN 978-9970-02-977-8

DISCLAIMER

This Information is strictly for purposes of guidance to

our clientele and should not at any one time be used in
place of the substantive law; and is subject to change on
amendment of tax legislation and any other regulations
governing tax administration.
Table of contents
Foreword ........................................................................6

PART A .................................................7

Background to Taxation..................................................10
1.0 Introduction to Taxation.....................................................11
2.0 History of Taxation in East Africa.....................................11
3.0 Legality of Taxes collected by
the Central Government …………………….….........................12
4.0 Principles of Taxation..........................................................13
4.1 Equity/Fairness.....................................................................13
4.2 Convenience..........................................................................14
4.3 Certainty.................................................................................14
4.4 Economical............................................................................14
4.5 Simplicity...............................................................................15
4.6 Ability to Pay.........................................................................15
5.0 Characteristics of a good Tax System.............................15
5.1 Progressive Tax....................................................................15
5.2 Regressive Tax......................................................................15
5.3 Proportional Tax..................................................................15
6.0 Classification of Taxes.........................................................15
7.0 Role of Taxation....................................................................16
8.0 About Uganda Revenue Authority...................................17
8.15 Taxpayers’ Charter..............................................................23
8.15.1 Rights of the Taxpayer ………………………….........................24
8.15.2 Obligations of the Taxpayer..............................................25
9.0 Brief on E-Tax.......................................................................26
9.1 E – Registration....................................................................26
9.2 E – Filing................................................................................27
9.3 E – Payment..........................................................................28
10.0 Definition of Key Terms......................................................28
 Table of contents
11.0 Scope of Tax Liability………………….....…………………………..29
12.0 Sources of Income………......…………………………………………29
12.1 Business Income………......…………………………………………….29
12.2 Employment Income………......……………………………………..32
12.3 Property Income.…......………………………………………………...36
12.4 Exempt Income………..………………………………………………....36

PART B..................................................................37

Domestic Taxes…………………………………………................38
1.0 Tax Registration…………………………………………...................39
2.0 Return filing…………………………………………..........................44
3.0 Assessments………………………………………….........................48
4.0 Objections and Appeals………………………………………….....49
5.0 Payment and recovery of Tax……………………………………..52
6.0 Determination of Tax liability……………………………………..54
7.0 Persons Assessable to tax.…………………………………………55
7.1 Taxation of Small Business Taxpayers…………………….…55
7.2 Individual Income Tax…………………………………………………58
7.3 Corporation Tax…………………………………………………………..60
7.4 Pay As You Earn…………………………………………………..……..61
7.5 Withholding Tax…………………………………….……………………63
7.6 Rental Tax………………………………………………………………..….66
7.7 Value Added Tax…………………………………………………………71
8.0 Income Tax Clearance Certificate (TCC)……………........81
9.0 Tax stamps…………………………………………............................82
10.0 Non-Tax Revenue (NTR)…………………………………………....82

PART C…………………………………………..................85
Customs…………………………………………............................86
1.0 Introduction…………………………………………..........................87
Table of contents

2.0 Clearing Imports………………………………………….................88

3.0 Customs Clearing Agent…………………………………………...89
4.0 Declaration of Goods………………………………………….........99
5.0 Assessment of duties and taxes………………………………..99
6.0 Customs Valuation.……………………………………………………102
7.0 Payment of Customs taxes ………………….…………………..110
8.0 Objection and appeals…………………………………………......111
9.0 Clearance of Passengers and Baggage……………………113
10.0 Post parcel and courier…………………………………………....115
11.0 Warehousing of goods & motor vehicles on arrival..118
12.0 Groupage cargo clearance procedure……………………..120
13.0 Auction at customs warehouse.....................................123
14.0 Temporary Importation………………………………………….....124
15.0 Transit and Transshipment………………………………………..126
16.0 Export Procedure…………………………………………...............132
17.0 Prohibited and Restricted Goods……………………………..135
18.0 Clearence of Temporary Exports……………………………...137
19.0 Exports under a simplified regime………………………......138
20.0 Exemption Regime………………………………………….............139
21.0 Single Customs Territory…………………………………………...141
22.0 Automated System for Customs Data (ASYCUDA)...147
23.0 Customs Trade Facilitation Initiatives……………………...150
23.1 Security and Facilitation in a global
Environment (SAFE)........................................................150
23.2 Authorised Economics Operator (AEO).....................151
23.3 Regional Electronic Cargo Tracking System ………....156
23.4 Uganda Electronic Single Window (UESW) …………..160
23.5 Document Processing Center …………………………..….....165

PART D...............................................................166
1.0 Special Features of the Taxes Administered
by the URA........................................................................168
1.1 Payment of Tax…………………………………………...................168
 Table of contents

1.2 Regulations…………………………………………..........................168
1.3 Rulings…………………………………………..................................168
1.4 Remission of tax………………………………………………………...169
1.5 Double Taxation Treaties ………………………………………….169
Foreward

Fellow Citizens

We are glad to bring you the fourth

edition of the URA Taxation Handbook,
‘A Guide to Taxation in Uganda’.

From the various interactions we

have had with you, the need for more
en-gagements in taxpayer education to
equip you with more knowledge about
your rights and obligations is very clear.
On our part, we are committed to not
only listen to your concerns, but to
re-spond to your needs in a dynamic
and innovative way.

This handbook is one of the many ways we are equipping you with all
information related to tax, in a simplified manner to enable you be com-
plaint as you grow your businesses.

It is from a healthy business environment that we collect taxes for the

development of our country – which is a win-win for all of us.

In here you will find the overall summary of the structure of Uganda’s
tax system from tax policy issues, international trade and customs and
domestic taxes, recent tax amendments, examples from the small business
taxpayers, employment, and multinational operations that answer all of
the frequently asked tax challenges. The handbook also equips you with
astep-by-step taxpayer rights and obligations – all aimed at aiding you
to be tax alert and look at tax as part of a legitimate business expense
and not as a burden.

I encourage you to embrace this bank of tax knowledge as we move to-

gether in developing Uganda into an economically independent nation. If
you have any feedback on other ways we can support you, please do not
hesitate to contact us. Contact details are at the back of the handbook.

John Rujoki Musinguzi

Commissioner General – Uganda Revenue Authority
N IS FREE TIN IS FREE TIN IS FR
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. . . AND INSTANT
“URA has unveiled a simpler TIN
registration process”

e t yo u r fre e TIN today at

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www.ura.go.u

Call us on (Toll free): 0800 - 117000 or 0800 - 217000

WhatsApp: (256) - 772140000 | Email: info@ura.go.ug
PART A
BACKGROUND TO TAXATION
 Compulsory
Public Works

Gun and Hut

Tax

Graduated
Tax

Income Tax
and Customs
Duty

Uganda
Revenue
Authority
(1991)
 Background to Taxation

1.0 | Background to Taxaton

1.1 Introduction to Taxation

The evolution of taxation is attributed to the development of the modern

state, which called for increased expenditure for infrastructure and public
services.

1.2 Origin of Taxation

Tax is the price we pay for civilization, which goes hand in hand with an
organized society. For a society to be organized, it needs a well-financed
administrative structure. Therefore, taxation in its different forms has existed
as long as society had the minimum elements of government.

Tax is a monetary charge imposed by the government on persons, entities,

transactions or property to generate government revenue. Where payment
is not monetary, a wider embracing definition has been adopted as:

“Enforced proportional contributions from persons and property levied by

the State by virtue of its sovereignty for the support of government and
for all public needs”
- Thomas. M. Cooley: The Law of Taxation

One of the main characteristics of a tax is that the payer does not demand
something in return equivalent to the payment made to government. Taxes
are collected and used by government for a public good and not just for
those who make the payment.

2.0
2.0 | History
History ofof Taxation
Taxation inAfrica
in East East Africa
Taxation was introduced in East Africa by the early British colonial
administrators through the system of compulsory public works such as road
construction, building of administrative headquarters and schools, as well as
forest clearance and other similar works.

The first formal tax, the hut tax, was introduced in 1900. This is when the first
common tariff arrangements were established between Kenya and Uganda.
Through this, Ugandans started paying customs duty as an indirect tax, which
involved imposition of an ad valorem import duty at a rate of 5% on all goods
entering East Africa, through the port of Mombasa and destined for Uganda.

A similar arrangement was subsequently made with German East Africa

(Tanganyika) for goods destined for Uganda that entered East Africa through
Dar-es- Salaam and Tanga ports. This gave rise to revenue which was
remitted to Uganda.

A Guide to Taxation in Uganda | Fourth Edition 11

 Background to Taxation

The Protectorate government heavily relied on customs duties to fund

its programs. Most indigenous Africans were not engaging in activities
that would propel the growth of the monetary economy. Accordingly,
government introduced a flat rate Poll tax that was imposed on all male
adults. The requirement to pay tax forced the indigenous Ugandans to enter
the market sector of the economy through either selling their agricultural
produce or hiring out their services. The tax burden was later increased
by the introduction of an additional tax to finance local governments. This
culminated into the first tax legislation in 1919 under the Local Authorities’
Ordinance.
In 1953, following recommendations by a committee headed by Mr. C.A.G
Wallis, Graduated personal tax was introduced to finance local governments.

Income tax was introduced in Uganda in 1940 by a Protectorate ordinance. It

was mainly payable by the Europeans and Asians but was later on extended
to Africans. In 1952, the ordinances were replaced by the East African Income
Tax Management Act, which laid down the basic legal provisions found in
the current income tax law. The East African Income Tax Management Act of
1952 was repealed and replaced by the East African Income Tax Management
Act of 1958.

The administration of both income tax and customs duty was done by
departments of the East African Community (EAC) until its collapse. Under
the EAC dispensation, there were regional taxing statutes and uniform
administration but the national governments (or partner states, as they were
called) retained the right to define tax rates.

After the collapse of the EAC, the tax departments were transferred to
Ministry of Finance with the transfer of the Income Tax Department in
1974; followed by the Customs Department in 1977. In 1991, the function of
administering Central government taxes was shifted from the Ministry of
Finance to the Uganda Revenue Authority, a corporate body established by
an Act of Parliament.

The EAC was re-established in 1999 by Tanzania, Kenya and Uganda. Rwanda
and Burundi joined the EAC in 2007. The EAC in December 2004 enacted
the East African Community Customs Management Act 2004 (EAC-CMA).
This Act governs the administration of the EA Customs union, including the
legal, administrative issues and operations.

3.0 | TheThe
3.0 Legality
Legality ofofTaxes
Taxescollected
collected by
bythe
theCentral
CentralGovernment
Government
Articles 152 (1) of the Uganda Constitution provides that “No tax shall be
imposed except under the authority of an Act of Parliament”. Therefore, the
Uganda Revenue Authority Act.

12 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

Cap 196 was put in place to provide the administrative framework in which
taxes under various Acts are collected.
Uganda Revenue Authority administers the tax laws (Acts) on behalf of the
Ministry of Finance, Planning and Economic Development under the following
legislations:

i. Customs Tariff Act. Cap 337.

ii. East African Community Customs Management Act, 2004
iii. East African Excise Management Act Cap 28
iv. Excise Tariff Act Cap 338
v. Income Tax Act Cap 340
vi. Stamp Duty Act Cap 342
vii. The Finance Acts
viii. The Gaming and Pool Betting (Control and Taxation) Act Cap 292
ix. The Tax Procedures Code Act, 2014
x. Traffic and Road Safety Act Cap 361
xi. Value Added Tax Act Cap 349
xii. All other taxes and non-tax revenue as the Minister responsible for
Finance may prescribe.

4.04.0
| Principles
Principlesof
ofTaxation
Taxation

The principles of taxation are concepts that provide for guidelines towards a
good tax system. Since many view taxation as a necessary evil, it should be
administered in a way that creates minimum pain to the payer, just like the
proverbial honey bee which collects nectar from the flower without hurting
the flower.

Economists over time have laid down the principles that policy makers should
take into account when making tax laws; these principles are referred to as
the canons of taxation.
The following are the common canons of taxation:

4.1 Equity/Fairness

Tax should be levied fairly so that:

(i) The same amount of tax is paid by persons or entities that are
equal in earnings or wealth (horizontal equity).

Illustration
If B is a shopkeeper and makes a profit of Shs 10,000,000 in a year and is
taxed at 10%, which is equal to Shs 1,000,000, and C who is a cattle trader
makes a profit of Shs 10,000,000 in a year, he should also be taxed at 10%.
Likewise, any other person who earns an income of Shs 10, 000,000, should
pay the same tax.

A Guide to Taxation in Uganda | Fourth Edition 13

Background to Taxation

(ii) The contribution in tax should increase as the taxable income in-
creases (vertical equity). The principle behind vertical equity, which is most
applicable in income taxes, is that the burden among taxpayers should
be distributed fairly, taking into account individual income and personal
circumstances. Vertical equity is to be taxed proportionate to the income
one earns. The strongest shoulders should carry the heaviest burden.

Illustration

B and C in illustration 1 were taxed at 10% because they both earned

10,000,000; if D earned Shs 15,000,000 this person may be taxed at 15%.

4.2 Convenience

Under normal circumstances, a taxpayer should not undergo undue difficulty

to pay tax. Therefore, the place, medium, mode, manner and time of payment
should not be a burden to the taxpayer.

Illustration

A person doing business in Tororo should not be inconvenienced to travel

to Kampala to pay his/her taxes. An office should be created nearby to ease
the process.

4.3 Certainty

A good tax system is one where the taxes are well understood by both tax
payers and tax collectors. The time and reason of payment as well as the
amount to be paid by an individual should be well documented and certain
or known. The tax should be based on laws passed by parliament.

4.4 Economical

The administrative cost of collecting taxes should be kept as low as possible

to both the collecting agent and the taxpayer. The general principle is that
the cost of collection and administration of taxes to the collecting agent
should not exceed 5% of the tax revenue. Likewise, the cost of compliance
to the taxpayer should be as low as possible and must not be seen to hinder
voluntary compliance.

Illustration

URA collected about shillings 16Tn in the financial year 2018/19. By the prin-
ciple of Economy; the cost of collecting and administrating taxes should not
exceed 5% of shillings 16Tn.

14 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

4.5 Simplicity

The type of tax and the method of assessment and collection must be simple
enough to be understood by both the taxpayers and the collectors. Compli-
cated taxes lead to disputes, delays, corruption, avoidance and high costs of
collection in terms of time and resources.

4.6 Ability to Pay

The tax levied should not exceed the taxable income of a person. This is to
avoid discouraging the person’s performance or participation in the tax base.
Other canons of taxation include; Diversity, Productivity, and Elasticity.

5.0 |Characteristics
5.0 ofaagood
Characteristics of goodTax Tax System
System

In complying with the canons of taxation, taxes are characterized as propor-

tional, progressive or regressive.

5.1 Progressive Tax

This tax is structured in such a way that the tax rate increases as the person’s
income increases. Most income taxes are progressive so that higher incomes
are taxed at a higher rate. A progressive tax is based on the principle of vertical
equity.

5.2 Regressive Tax

This is a tax not based on the ability to pay. A regressive tax is structured that
the effective tax decreases as the income increases.

5.3 Proportional Tax

This is a tax whose rate remains fixed regardless of the amount of the tax base.
A proportional tax may be considered regressive despite its constant rate when
it is more burdensome for low income payers than to high income payers.

6.0
6.0 Classification of
|Classification of Taxes
Taxes
Taxes are classified as either direct or indirect.
Direct Taxes are imposed directly on a person’s income arising from business,
employment, property and the burden of the tax is borne by the individual or
business entity. Examples of direct taxes include Corporation tax, Presumptive
(Small business) tax, Individual Income Tax, such as Pay As You Earn, capital
gains tax and rental income tax.

A Guide to Taxation in Uganda | Fourth Edition 15

 Background to Taxation

Indirect Taxes are taxes levied on consumption of goods and services. The taxes
are collected by an agent and some of them include Value Added Taxes (VAT),
excise duty, import duty among others.

Illustration

Shopkeeper B sells bread to K for Shs 2,000, on which VAT has been charged.
The VAT on the bread therefore is Shs 305 (18% of 2,000). The tax is remitted
to the Government by the seller. Although K has paid the Shs 305 on bread
that was priced at Shs 1,695, the tax is accounted to URA by B and K need not
follow up the transaction with URA.

| Role
7.0 7.0 of Taxation
Role of Taxation

a) To finance Government re-current and development expenditure,

i.e. paying salaries for civil servants and funding long term projects
such as construction of schools, hospitals and roads.
b) It can be used to regulate demand and supply in the economy
in times of inflation.
c) It encourages development of local industries with a view to
providing employment and saving foreign exchange, by imposing high
duties on competing imports. It encourages export of goods and
services by reducing or removing tax on the export in order to make
them more competitive in the world market.
d) It protects society from undesirable or harmful products and industries
by imposing high taxes on them, for instance excise duty on cigarettes
and beer as well as environmental levy on used vehicles.
e) To achieve greater equality in the distribution of wealth and income,
the government may impose a progressive tax on the incomes and
wealth of the rich. The revenue raised is then used to provide social
services for the benefit of the society.

16 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

8.08.0
| About Uganda
About Revenue
Uganda Revenue Authority
Authority

Uganda Revenue Authority (URA) is a Statutory Authority established by the

Uganda Revenue Authority Act, Cap 196 with the mandate of assessment,
collection and administration of taxes, fees and Non- Tax revenue in Uganda.

8.1 Vision

A transformational Revenue Service for Uganda’s Economic Independence

8.2 Mission

Mobilize revenue for National Development in a Transparent and Efficient

manner.

8.3 Core Values

• Patriotism
• Integrity
• Professionalism

8.4 Client Value Proposition

We promise excellent revenue services everywhere, all the time at the lowest
cost possible.

8.5 Tagline

Developing Uganda Together

8.6 How URA is organized to serve its clients

Uganda Revenue Authority is administered by a Board of Directors, which is

the policy making body entrusted with general oversight of the organisation.
The Management of URA is headed by the Commissioner General, who at
the same time is responsible for three divisions namely:
(i) Public and Corporate Affairs Management: This division manages
Uganda Revenue Authority’s interface with the Public through Client’s
Relations, Public Relations and Publicity, Corporate Brand Management and
Tax Education.

(ii) Staff Compliance: Handles staff behaviour and adherance to the URA
code of conduct
(iii) Executive Office: This division is entrusted with managing the

A Guide to Taxation in Uganda | Fourth Edition 17

Background to Taxation

Commissioner General’s office and duties of that office.

8.7 Departments in URA

Administratively, URA has Eight departments, as follows:

8.7.1 Legal Service and Board Affairs

The main role of the Department is to serve as an in- house legal firm to pro-
vide legal services on all issues that may arise in the day-to-day operation
of the organisation. The Department represents URA in the courts of law as
well as quasi courts.

8.7.2 Customs Services Department

This department is responsible for handling all customs issues including as-
sessing and collecting international trade revenues in accordance with the
relevant tax laws.

8.7.3 Domestic Taxes Department

This department is charged with the responsibility of administering all do-

mestic tax affairs; registration, receipt of returns, filing, auditing, assessments,
collections, and refunds. In addition to tax revenue, it also administers non-
tax revenue as mandated by Ministry of Finance, Planning and Economic
Development.

8.7.4 Corporate Services Department

This department is responsible for all the support service functions in the
organisation. These include; Finance, Administration, Information Technol-
ogy and Human Resources.

8.7.5 Internal Audit Department

This department offers audit assurance services to other departments on

the adequacy of internal control systems

8.7.6 Tax Investigations Department

This department is charged with monitoring and pursuing all cases of tax
crime and evasion-related activities.

18 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

8.7.7 Information Technology and Innovation

This department is charged with development, planning and im-
plementation of enterprise Information Technology systems.

8.8 Specified Targets

Uganda Revenue Authority receives annual revenue targets from its parent
Ministry, The Ministry of Finance, Planning and Economic Development. URA’s
long-term goal is to collect Revenue that will fully finance the Government
recurrent and Development expenditure.

8.9 Feedback management

URA values feedback and shall continue to inculcate a communication culture

through the following initiatives:
• Taxpayer outreach program
• Stakeholder engagements
• The Annual Taxpayers’ Appreciation Day
• The Annual Client Satisfaction Surveys and the Media

Other tools used to generate feedback from clients include:

• The URA Web portal
• The URA Toll Free line 0800117000/0800271000
• URA WhatsApp 0772140000
• Suggestion boxes
• The Client Feedback Form
• Email: services@ura.go.ug
• Social media e.g Facebook, Twitter, Instagram and YouTube
• The Taxman Blog
Feedback is invaluable to URA for the following reasons;
• It enables us to know how well we are performing against the
parameters put in place. Through this, we are constantly kept in a
position to determine our strategic direction
• It also provides a basis for the short term activities we must carry
out in order to satisfy our client
• URA is committed to placing the customer first and shall
undertake all possible measures to achieve this.

8.10 Managing Complaints

URA recognizes that managing feedback is a critical factor in Client Service

and is therefore committed to giving instant responses to all complaints
raised using established feedback tools.

A Guide to Taxation in Uganda | Fourth Edition 19

Background to Taxation

8.11 Accountability

Accountability is a primary tool of ensuring continuity in any relationship.

URA shall:
• Uphold zero tolerance to corruption e.g through the Integrity En-
hancement function that oversees integrity issues in URA
• Avail all the necessary information to all our stakeholders
• Be responsive to the environmental and societal needs of the
community in which we operate through comprehensive
Corporate Social Responsibility programs.
• Hold periodic press briefs to keep the public informed in regard to
tax and tax related issues
• Disseminate information to the public on demand through estab
lished channels
• Establish strong internal controls to check on the performance of
our procedures

8.12 Dissemination of information

Is key in the relationship between URA and the Public; and this will be
achieved through:
i. Appointed Regional Spokespersons who deal with all public
relations issues in a bid to improve information flow to all
stakeholders.
ii. Developed a Web portal to cater for our vast clientele. This is
aimed at giving our clients one quick access to handy material in
regard to URA, its processes and procedures.
iii. Profiled and segmented all sectors of the business community to
enable a focused approach
iv. Participate in Exhibitions where Tax Information Centers are
established to handle client issues.
v. Partner with the media to take the tax message to the grass roots.
vi. Hold periodic press briefings to enlighten the public on current
issues pertaining to the Authority or its dealings.
vii. Produce simplified tax materials to benefit its vast clientele.
viii. Translate simplified tax materials to local languages to empower
all the taxpayers with tax information.
ix. Implemented the Taxation course units in the Ugandan School
Curriculum

8.13 Monitoring and evaluating performance

URA shall continue to monitor and evaluate performance through a num-

ber of avenues. These include;

20 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

(i) Periodic client satisfaction surveys – Feedback from such surveys

will be used to improve on our service delivery.
(ii) The URA Client Service Standards. These Standards detail how URA
shall relate with all her stakeholders. They are an open commitment
on what the ‘customer’ should expect as the minimum service levels
from all URA staff.
Our stakeholders are encouraged to know the provisions therein and give
feedback relating to staff performance.

8.14 Performance improvement

URA has embraced several initiatives aimed at improving organizational

effectiveness and efficiency including the following:
1. Restructuring: URA reorganized itself to provide a leaner, more
efficient and focused institution with a highly motivated and
proactive workforce.
2. Attitude Change: URA shall uphold the Organizational Core Values
while undertaking Team Building Events and staff Training to achieve
positive behavioral change.
3. URA Client Service Standards: The standards will provide a bench
mark for the measurement of performance levels across the
organization
SERVICES STANDARDS

Physical Queues URA shall attend to taxpayers and/or its cleints

on a first come, first serve basis to give assistance
and/or clarification to taxpayers regarding their tax
obligations.

Acknowledge and URA services shall be available between

resolve complaints
8:00 am – 5:00 pm from Monday to Friday (except
public holidays), with the exception of the following
where URA Services shall be available between;

a) Twenty four hours/Seven days of the week

(24/7) for One Stop Border Posts

b) 8:00 am – 8:00 pm on Weekdays and 9:00

am – 3:00 pm on Weekends except on public holi-
days for URA call-center services.

A Guide to Taxation in Uganda | Fourth Edition 21

Background to Taxation

Duty drawbacks / • URA will endeavor to process duty drawbacks

refunds / refunds within the following stipulated time-
lines from the date of submission of requests for
refunds;

• Income Tax - 30 days

• VAT - 15 days

• Other Non Tax Revenue -10 days

Audits and URA will give the taxpayer at least ten (10) days’ no-
Assessments tice of its intention to conduct an audit. However, no
prior notice shall be given where an investigation is
to be conducted.

Objections decisions An objection notice will be served to the taxpayer

within 90 days from the date of receipt of the ob-
jection for Domestic Taxes.

An objection notice will be served to the taxpayer

within 30 days from the date of receipt of the ob-
jection for Customs Duties

Licensing of Tax and URA shall provide an updated list of licensed Tax
Clearing Agents and Clearing agents annually using available com-
munication channels.

TIN Registration After fulfilling all requirements and procedures as

per the existing law Tax Identification Number will
be processed within 2 business day

Processing of After fulfilling all requirements and procedures as

Exemptions per the existing law Tax Exemption Process will be
completed within 30 business days, subject to avail-
ability of all the relevant information.

Processing of Tax Tax Clearance Certificate processing shall be done

Clearance Certificate within 2 working days.

Approval and After fulfilling all requirements and procedures as

Cancellation per the existing law Approval and Cancellation of
Agency notice shall be processed within 24 busi-
ness days.

22 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

URA online systems URA online systems will be available twenty four
hours /seven days a week (24/7). Taxpayers will be
notified in the event of system intermittence.

Contact Person For all correspondences, we shall provide a contact

person and their direct telephone and official email
for the taxpayer to follow up.
Engagements For all routine engagements, taxpayers and stake-
holders shall be informed on the time and venue at
least one week in advance.

Inquiries and Inquiries and complaints lodged through URA’s

Complaint available platforms, will be responded to within 2
Management business days.

8.15 Taxpayers’ Charter

The URA Taxpayers’ Charter spells out the rights and obligations of the Taxpayer,
guides URA in upholding these rights and facilitates the Taxpayer to meet his
or her obligations.

It was launched in 2002 and first revised in April 2006 to accommodate the
developments in Uganda Revenue Authority (URA) and later in December 2006
to align it with the Public Service Client Charter then in June 2011 and the latest
revision in 2015.

The Charter derives authority from the various Tax laws and Regulations govern-
ing the administration of taxes in Uganda and clearly outlines the expectations
of both the Taxpayer and the Tax Authority.

It acts as a reference point for the Taxpayers in managing their interaction with
URA and provides the Tax body with the necessary benchmark for its Client
Service Standards. This is done by recognizing its clients as viable partners in
the administration and collection of taxes. The Taxpayers charter is therefore a
set of guidelines that guarantees a meaningful relationship between URA and
its various stakeholders.

A Guide to Taxation in Uganda | Fourth Edition 23

Background to Taxation

8.15.1 Rights of the Taxpayer

a) Right to fair treatment

Taxpayers have a right to be treated fairly in all their dealings with URA. Tax
laws and procedures shall be applied consistently to all taxpayers.

b) Right to finality

Taxpayers have the right to know the maximum amount of time required to
challenge URA’s tax related decisions, as well as the maximum amount of time
URA has to audit a particular tax year. Taxpayers have the right to know when
URA has finalized an audit

c) Right to Privacy

Taxpayers have the right to expect that any URA inquiries, examinations,
investigations or enforcement actions will comply with the law and be no
more intrusive than necessary and will respect all due process rights, in-
cluding search and seizure protections

d) Right to confidentiality
Taxpayers have the right to expect that any information they provide to
URA will not be disclosed unless authorized by the taxpayer or by law.
Taxpayers have the right to expect appropriate action to be taken against
URA employees who wrongfully use or disclose taxpayer information

e) Right to be informed
Taxpayers have the right to know what they need to do to comply
with the tax laws. They are entitled to clear explanations of the law and
URA procedures in all tax forms, instructions, publication, notices and
correspondences. They have the right to be informed of the URA
decisions about their tax accounts and to receive clear explanations of
the outcomes.

f) Right to timely, quality and professional services

Taxpayers have the right to receive prompt, courteous and professional
assistance in their dealings with URA and to receive clear and easily un-
derstandable communications from URA.

g) Right to representation
Taxpayer reserves the right to appoint and retain an authorised repre-
sentative such as a tax agent or clearing agent to represent them in their
dealings with URA.

24 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

h) Right to challenge and/or object

Taxpayers have the right to raise objections and provide additional doc-
umentation in response to tax decision and to expect that URA will
consider their objections promptly and fairly, and to receive a response
from URA within the period stipulated in the Law.

i) Right to appeal
Taxpayers have a right of appeal to an independent tax tribunal or courts
of law in accordance with the law on any matter

8.15.2 Obligations of the Taxpayer

a) Registration
All eligible taxpayers should voluntarily register with URA.

b) Refund Claims
Taxpayers have the obligation to submit their tax refund claims using
prescribed forms and attach required evidence to support the claim.

c) Keeping of proper records

The Taxpayer is obliged to keep accurate records of accounts, documents
and any other relevant information as prescribed under the law

d) File tax returns

Taxpayers are obliged to file accurate and timely tax returns, customs
entries or any information relating to their tax obligations

e) Payment of Taxes
Taxpayers are obliged to pay tax in accordance with the law.

f) Avoid Tax Evasion

Taxpayers should not indulge in any form of tax evasion and/or other
illegal practices that cause revenue leakages.

g) Compliance
Taxpayers must comply with their tax obligations as stipulated by the
relevant laws

Taxpayers must comply with all processes and procedures as stipulated

by law and administratively to facilitate revenue collection

h) Update personal information

Taxpayers are required to regularly update personal information and
payment details with URA.

A Guide to Taxation in Uganda | Fourth Edition 25

 Background to Taxation

i) Due diligence in tax matters

The taxpayer is solely responsible for managing his/her tax obligations
and affairs.

j) Be respectful to URA staff

The taxpayer is expected to behave respectfully at all times when dealing
with all URA staff.

k) Dealing with authorized staff

The taxpayer and/or his/her authorised agent(s) shall be expected to deal
and cooperate with URA’s authorized staff.

l) Quote your TIN

The Taxpayer must always quote their Taxpayer Identification Number (TIN)
for any dealings with URA.

m) The need for an interpreter

The Taxpayer shall inform URA of their need for an interpreter.
Response to tax notices and any other URA communication
The Taxpayer is obliged to respond to notices and information requests
received from URA in a time bound manner.

9.0 | Brief on E-Tax

9.1 E – Registration

URA, through its modernization process introduced an electronic/online

system (eTAX) to cater for registration of taxpayers, filing of returns,
assessments and payment of taxes. eTAX is a name given to an Integrated
Tax Administration System that provides online services to the taxpayer on a
24-hour basis.

eTAX enables taxpayers to lodge their applications online through the web por-
tal, from anywhere on the globe as long as they are connected to the internet.
Upon uploading the application on the web portal, the system will generate an
e – acknowledgement receipt with a reference number and search code that
you can use to track the status. Note; photocopies of any attachments have to
be delivered to a nearby URA office.

As the application is being processed, the applicant is contacted in case of any

query, interview or inspection. When the application is finally approved, the
applicant is issued a TIN with details displayed on the Certificate of Registration.
Where the application has been rejected, the taxpayer will be issued a rejection

26 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation
notice stating the reason(s) for rejection in their registered email address.

The taxpayer upon receipt of TIN is able to log onto the web portal and create
his / her own account for any further transactions, however this has changed,
on approval the notice goes with TIN and password.

Some of the benefits of e registration include: a streamlined and less time

wasting process, application easily done on the web portal. Besides registration,
the taxpayer is able to amend his / her registration details with URA in case of
any changes. Taxpayer will always receive feedbacks on the application and this
is possible especially when accurate email addresses and telephone numbers
(of the taxpayers) are indicated in the application.

9.2 E – Filing

A taxpayer registered with URA for any tax type other than PAYE has an
obligation to submit a return for the tax period defined by the respective
tax law. URA facilitated the taxpayer to fulfill this obligation by introducing
electronic filing in eTAX.

The taxpayer obtains a return from the web portal (http:// ura.go.ug), save
a template on any storage devise, take time to fill in the return and validate
the return before they finally upload it on the web portal. If the upload is
successful, the taxpayer will receive an auto generated e-acknowledgement
receipt which is evidence of submission. In case of any problems in filling
the respective returns, do not hesitate to send an email about the challenge
to URA on the email address; services@ura.go.ug or call the toll free lines.

In case there are errors in the return detected by the system, the taxpayer is
given a chance to amend the errors when he/she is issued a Return Modified
Advice Notice.

The return must be submitted by the due date to avoid penalties for late
filing and it must also be submitted for each tax period to avoid estimated
assessments that arise out of non-submission of returns. In case the taxpayer
is unable to submit a return on time, he or she can apply for the extension
of time to submit a return late using an application form for late filing also
found on the web portal.

Some of the benefits accruing from e-filing are that the return process was
clearly separated from the payment process and the taxpayer can now file
returns before/ after making the payment, or make the payment before/
after filing the return.

NB: Both Payment and Return should be made on or before the deadline.

A Guide to Taxation in Uganda | Fourth Edition 27

 Background to Taxation

9.3 E – Payment

A taxpayer required to make payments to URA for any tax type can do so using
the e payment process. All the taxpayer needs to do is to go onto the URA
web portal (http://ura. go.ug), access the payment registration slip, register the
payment and go to the bank to make the actual payment over the counter. The
taxpayer in future may even not need to go to the bank as such facilities like,
mobile money, Payway, VISA Cards are enabled for use

Benefits accruing from e-payment are that the taxpayer can utilize the service
on a 24-hour basis, the taxpayer’s costs of movement between his/her premises
and URA or the bank are reduced; and thus saving time. Taxpayers can also
monitor the status of their payments online through the web portal.

10.0 |10.0
Definition
Definitionof
ofkey terms
Key Terms

A Person - Includes an individual, a partnership, a trust, a company, a

retirement fund, a government, a political subdivision of government, and a
listed institution.

Chargeable Income - is the gross income of a person for the year less total
deductions allowed under the Income Tax Act Cap 340 for the year.

Gross Income of a person for a year of income - is the total amount of

business income, employment income and property income other than
exempt income. In case of resident persons, Gross income is a person’s income
from all geographical sources; and in the case of non-resident persons, gross
income includes only the income derived from Uganda.

Residency for tax purposes is defined in relation to individual, partnership

and Company as follows:

A resident individual is a person who has a permanent home in Uganda; or is

present in Uganda: for a period of 183 days or more in any twelve (12) months
period that commences or ends during the year of income; or during the
year of income and in each of the two preceding years of income, for periods
averaging 122 days in each such year of income; or is an employee or official
of the government of Uganda posted abroad during the year of income.

A resident company is one which:

a) Is incorporated in Uganda under the laws of Uganda
b) Is managed or controlled in Uganda at any time during
the year of income.
A Guidec)
28 to TaxationUndertakes a majority
in Uganda | Fourth Edition of its operations in Uganda during
the year of income.
 Background to Taxation

A resident partnership - is one where any of the partners was a resident person
in Uganda during the year of income.

Year of Income - means the period of twelve months ending on June 30, and
includes a substituted year of income and a transitional year of income.

A substituted year of income - is a period of 12 months ending on a date other

than June 30.

A transitional year of income - is a period of less than 12 months that falls

between the person’s previous accounting date and a new accounting date.
This results from a change in a person’s accounting date.

11.0 | Scope of Tax Liability

The scope of liability to tax depends on a person’s residence status.

Income tax is imposed on Income from business, employment and property.
For a resident person, income tax is charged on gross income from all over
the world while for a non- resident person is only charged on income derived
from sources within Uganda.

Income tax is charged on every person who has chargeable income for each
year of income. Chargeable income is derived from three main sources of
income, namely; business, employment and property.

Income tax is administered under the Income Tax Act (1997) Cap 340
on chargeable income. As earlier noted, chargeable income is the gross
income of a person for the of income less total deductions allowed under
the income tax act.

12.0 | Sources of income

12.1 Business Income

Business is defined in the Income Tax Act to include any trade, profession,
vocation or adventure in the nature of trade.

Business income means any income derived by a person in carrying on a

business and includes the following amounts, whether of a revenue or
capital nature:

• The amount of Gains or losses from the disposal of business assets

such as land and buildings.

A Guide to Taxation in Uganda | Fourth Edition 29

Background to Taxation

• Any amount derived by a person as consideration for accepting a

restriction on the person’s capacity to carry on business.
For example, if Mama Rhoda gives Senkubuge Shs 100,000 to
relocate his shop to another area, the Shs 100,000 becomes business
income to Senkubuge.
• The gross proceeds derived by a person from the disposal of trading
stock, i.e. sales.
• The value of any gifts derived by a person in the course of, or by
virtue of, a past, present, or prospective business relationship.
• Interest derived by a person in respect of trade receivables or by a
person engaged in the business of banking or money lending.
• Rent derived by a person whose business is wholly or mainly the
holding or letting of property.

The definition of business is therefore inclusive rather than specific such that
there can be business which does not arise from trade, profession vocation
or adventure in the nature of trade.

12.1.1 Trade
Trade has the same meaning as commerce and it involves buying and selling
or bartering of goods. There are many exceptions to this general definition
but the following elements are crosscutting:
• The element of profit
• The regularity of the transactions.
• The arrangements and effort, and,
• Compliance with statutory obligations made to make the
transactions work.
Any of the above may determine whether a trade is carried out. However,
depending on the facts of each case, the existence of these conditions could
generally lead to the likelihood of a trade.

12.1.2 Adventure in the Nature of Trade

This refers to transactions where profits arise from activities such as gam-
bling, speculative dealings in commodities, single or one off transactions or
unconventional transaction e.g. smuggling.

The definition of an adventure of trade may appear sometimes to overlap

with trade, but if either is proved, the requirements for business definition
are satisfied.

The following characteristics may point to an adventure in the nature of trade.

• Profit seeking.

30 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

• The way in which the asset was acquired.

• The nature of the asset.
• Modification of the asset prior to sale or use.
• Interval between purchase and sale of the asset.
• Way in which the sale is effected.
• Number of transactions.
• Existence of trading interest in the same field.
• Method of financing the transaction.

12.1.3 Profession

This is a paid occupation especially one which requires advanced

education and training, e.g. architecture, accounting, law and medicine.

This is how one passes one’s life when earning a living. More often, it is referred
to as a special calling and qualification for a certain kind of work especially
for social or religious work. It can thus be used to bring within the scope of
income tax any form of regular and continuous profit earning, which does
not fall within the categories of trade, business, profession or employment.
Earnings from activities related to religion can fall in this category.

Business income is considered if it is ‘derived’ during the year of income. ‘De-

rive’ has been judicially determined to be equivalent to ‘accrue’ or ‘arising’,
which also relates to the source of income.

12.1.4 Capital Gains

Capital gains arise from the disposal of a business asset that is not a depre-
ciable asset, such as land and buildings. A disposal of an asset occurs when
an asset has been sold, exchanged, redeemed, distributed, transferred by
way of gift, destroyed or lost by the taxpayer. The Capital gain is the excess
of the consideration over the cost base of the asset. Conversely, there may
also be a loss when the cost base of the asset is higher than the consideration
received for the business asset.

Cost base of an asset is the amount paid or incurred by the taxpayer in respect
of the asset, including incidental expenditures of a capital nature incurred in
acquiring the asset, and includes the market value at the date of acquisition
of any consideration in kind given for the asset.

Capital gains are included in the gross income of the taxpayer and assessed
as a business income.
Calculation of capital gains tax

A Guide to Taxation in Uganda | Fourth Edition 31

Background to Taxation

In the calculation of capital gains tax, indexation is provided for in order to

account for inflation. This means that before determining Capital Gains tax
on a business asset, one will factor in inflation among others that influence
the asset value. However, indexation only applies where the asset is sold after
12 months from the date of purchase of that Asset.
The prescribed formula is:
CB x CPID/CPIA, where;
CB is the amount of an item of cost or expense incurred;

CPID is the Consumer Price Index number published for the calendar month
of sale; and

CPIA is the Consumer Price Index number published for the month imme-
diately prior to the date on which the relevant item of cost or expense was
incurred.

Illustration:
A piece of land was purchased in June 2015 for shs.10, 000,000 and sold
in January 2016 for shs.25, 000,000. The Consumer Price Index for 2015 is
153.25 and for 2016 is 181.67

In this case, the indexed cost of acquisition would be

10,000,000 x 181.67/153.25 = 11,854,486
Where CB=10,000,000
CPID=181.67
CPIA=153.25

So, the taxable capital gain would be 25,000,000 – 11,854,486 = 13,145,514

And tax at 30% would be Shs.3, 943,654.
If the land was purchased and sold within 12 months from the date of the
purchase, the capital gains would be computed by deducting the original
purchase price (cost base) from the selling price.
So, the taxable capital gain would be 25,000,000 – 10,000,000 = 15,000,000
and tax at 30% would be Shs.4, 500,000.
Therefore, indexation creates a tax saving of shs.556, 346.

12.2 Employment Income

Any income derived by an employee from any employment, whether past,
present or in future, including the value of any benefit, advantage or facility

32 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation

granted to an employee constitutes employment Income. An amount or benefit

is derived in respect of employment if it is provided in respect of past, present
or prospective employment. It also includes an amount or benefit provided by
a third party under an arrangement with an employer or an associate of the
employer; and it does not matter whether it is paid to the employee or to his
associates.

Employment is regarded to exist where there is a contractual relationship be-

tween master and a servant for a pay.
Employment refers to:

• Position of an individual in employment of another person.

• Directorship of a company.
• A position entitling the holder to a fixed or ascertainable
remuneration.
• Holding or acting in a public office.

It is important to distinguish between an employee and an indepen-

dent contractor. As a general rule, an individual who does not satisfy the
definition above automatically becomes an independent contractor.

Factors to consider when distinguishing between employees and contractors

• Who has control over hours of work?

• Who has control over location of place of work?
• Who has control over sequence of work?
• Who furnishes the tools, equipment and materials?
• Whether the work has a risk of profit or loss?
An employer means a person (individual or corporate) whoemploys/re-
munerates an individual while an employee is an individual engaged in
employment

12.2.1 Composition of Employment Income

According to the Income tax Act cap 340, Employment income includes:
• Wages, salary, leave pay, payment in lieu of leave, overtime pay, fees,
commission, gratuity, bonus, allowances (entertainment, duty, utility,
welfare, housing, medical, or any other allowances)
• The value of any benefits in kind provided by/on behalf of the
employer to the employee
• Amount of private/personal expenditure discharged or reimbursed
by the employer
A Guide to Taxation in Uganda | Fourth Edition 33
Background to Taxation

• Employment terminal and retirement benefits

• Insurance premiums paid by the employer for the employee and/or
his dependants
• Payments in respect of change of employment/contract terms
• Discounts in shares allotted to an employee and any gain derived on
disposal of a right or option to acquire shares under an employee share
acquisition scheme
Note: It should be noted that all or any of the above in combination
comprise employment income.

12.2.2 Benefits in Kind

A benefit in kind is the facilitation not by way of cash by an employer to
an employee as part of past, present or future employment terms. Such
benefits need not have been in the written employment terms. Taxable
non-cash employment benefits include:
• Private use of an official motor vehicle
• Provision of domestic servants and utilities
• Meals, refreshment, entertainment
• Relief of debt obligations/interest
• Provision of property by employer to employee (at no arm’s length
terms)
• Provision of residential accommodation
• Any other benefits as determined by the Commissioner General.

12.2.3 Valuation of Benefits in Kind

As a general rule, the value of a benefit in kind is the fair market value of
the benefit on the date it is taken into account for tax purposes less any
amount paid by the employee for the benefit.
1. Motor Vehicle – Where a benefit provided by an employer to an
employee consists of the use or availability for use of a motor vehicle wholly
or partly for the private purposes of the employee, the value of the benefit
is calculated according to the following formula: (20% × A × B/C) – D where,
A is the market value of the motor vehicle at the time when it was first
provided for the private use of the employee.
B is the number of days in the year of income in which the motor vehicle
was used or available for use for private purposes by the employee for all
or a part of the day.
C is the number of days in the year of income
D is any payment made by the employee for the benefit

34 A Guide to Taxation in Uganda | Fourth Edition

 Background to Taxation
2. Domestic Assistants (housekeeper, driver, gardener or other do-
mestic assistant) – The benefit is the total employment income paid to the
domestic assistants, reduced by any payment made by the employee for
the benefit.

3. Meals, refreshment or entertainment – The benefit is the cost of the

meals, etc. to the employer less any payment by the employee.

4. Utilities (Electricity, Water, Telephone, Internet) – The benefit is the

cost of the utility to the employer less any payment by the employee.
5. Low interest on loans exceeding one million shillings – The benefit is
the difference between the interest paid by the employee and the inteerest
payable using the statutory interest rate (Bank of Uganda discount rate at
commencement of the year of Income).

6. Debt waiver – The benefit is the amount of the debt waived.

7. Transfer or use of property or provision of services (Furniture and

transportation) – The benefit is the market value of the property or services
less any payments by the employee.
8. Accommodation or housing other than by way of reimbursement,
discharges or allowances – Where a benefit provided by an employer to
an employee consists of the provision of accommodation or housing, the
value of the benefit in kind is the lesser of:
(a) the market rent of the accommodation or housing
(b) reduced by any payment made by the employee for the benefit; or (b)
15% of the employment income, including the amount referred to in
paragraph (a), paid by the employer to the employee for the year of
income in which the accommodation or housing was provided.
9. Any other benefit – The benefit is the market value of the benefit
less any payments by the employee.

12.2.4 Employee’s Relief

This refers to gains or income that is not included in the chargeable income
of the employee and therefore not taxable on the employee:
a. The employee’s income that is below the taxable threshold, currently
at Shs 235,000 per month
b. Pension
c. Discharge or reimbursement of medical expenses actually incurred
by the employee
d. Life insurance premiums paid by a taxable employer (company
individual) for the benefit of the employee
e. Expenses incurred by the employee; discharge or reimbursement
for the employee on official duty of the employer
A Guide to Taxation in Uganda | Fourth Edition 35
Background to Taxation
f.
Meals and refreshments or value thereof provided to all employees at
equal terms
g. Employer’s contribution to a retirement fund for the benefit of the
employee
h. Any non-cash benefits whose value is less than Shs 10,000 a month
i. Relief of 25% on terminal benefits for employees who have served the
employer for at least 10 years
j. Passage costs
k. The employment income of an expatriate employee in a listed Institution,
under a technical assistance agreement subject to the Minister’s
approval
l. Official employment income of persons employed in the armed forces,
Uganda Police Force and Uganda Prisons. It however excludes persons
serving there in civilian capacity
m. Employment income of Ugandans posted to work in Ugandan
diplomatic missions abroad
n. Employment income of persons employed by East African Development
Bank (EADB)

12.3 Property Income

Property Income is defined in the Income Tax Act as;
a) Any dividends, interest, natural resource payments, rents, royalties
and any other payments derived by a person from the provision,
use or exploitation of property
b) The value of any gifts derived by a person in connection with the
provision, use or exploitation of property
c) The total amount of any contribution made to a retirement fund
during a year of income by a tax exempt employer
d) Any other income derived by a person but does not include an
amount which is business, employment, or exempt income
e) Any amount included in business income of the person under any
other section of the Income Tax Act
Note: Rent is classified under business income if it’s derived by a per-
son whose business is wholly or mainly the holding or letting of property.
However, if rent is derived by the person whose business is not wholly or
mainly the holding or letting of property, then it is classified under property
income. For example if a company receives rent from its properties, then it
is classified as property income because it is not in the business of holding
or letting of property.

12.4 Exempt Income

Certain incomes by law are not taxed and they are referred to as exempt
income. Exempt income is listed in section 21 of the Income Tax Act.
36 A Guide to Taxation in Uganda | Fourth Edition
 Background to Taxation

PART B
DOMESTIC TAXES

A Guide to Taxation in Uganda | Fourth Edition 37

 Background to Taxation

SKIP
THE
QUEUE
“URA has unveiled a simpler
TIN registration process”

Get your free TIN now via

www.ura.go.ug

WhatsApp: (256) 772 - 140000

38 A Guide to Taxation in Uganda | Fourth Edition

 Domestic Taxes

1.0 | Tax Registration

URA, through its modernization process improved the registration process
through providing online services on a 24-hour basis. The registration process
enables taxpayers to obtain a Taxpayer Identification Number (TIN). Any
person engaging in any business generating income in Uganda is required
to have a TIN.

1.1 Taxpayer Identification Number (TIN)

A TIN is an identifying number used for tax purposes in Uganda; t is one’s

personal account with URA and it can be obtained through any of the fol-
lowing processes;

Through the URA Web portal:

i. Visit the URA web portal - https//ura.go.ug

ii. Download the appropriate registration form (Individual or
Non Individual),
iii. Complete the form by filling in the mandatory fields (boxes)
iv. Upload and submit online the completed form
v. Print a copy of the form and sign it off and together with the
necessary attachments submit to the nearest URA office.
vi. Receive an acknowledgment notice of approval of TIN

Visiting a URA designated office

In case a tax payer cannot register online, he or she can walk into any of the
URA offices or One Stop Centre located in any of the Municipality or KCCA
division and assistance shall be provided to complete the registration process.
Ensure that you move along with the necessary attachments as listed above.

In case of failure to do any of the above, call the Contact Centre: 0800117000
(Toll free)/ 0417444602 or send an email to services@ura.go.ug.

On approval of the application, the taxpayer will receive a notice containing

the TIN and a default password to enable him/her log into their URA Account
on the web portal. This will enable him/her create his/her own password.

All taxpayers should jealously protect details about their TIN account since
they are responsible for all the transactions conducted through their TIN
account.

A Guide to Taxation in Uganda | Fourth Edition 39

Domestic Taxes

1.2 General Registration requirements

These depend on the registration Category i.e. as an individual or non-indi-

vidual (E.g. Company).
• An active email address and mobile telephone.
• For an Individual, TIN registration requires a National ID or any other
two of the following valid identification documents; Village ID,
Employment ID, Passport, Driving permit, Voter’s card, recent Bank
statement, Work permit, financial card, Visa, NSSF card etc.
• For a non-individual, TIN registration requires Certificate of
Incorporation/certificate of registration, Company Form 20 showing
the Directors of the company, the TINs of the directors or any other
persons with legal capacity to bind the entity, and any other legal
documents that confirms existence.
1.3 Business type identification criteria
A business type is identified basing on the mode of operation and the ac-
tivities involved. In case it involves more than one business activity (a mixed
business); it is categorized depending on the core activities that generate
more revenue i.e. the principal business that contributes the largest portion
of the total Business Income.

1.4 Taxes imposed on registration

1.4.1 Income Tax
Income Tax (IT) is tax imposed on a person’s taxable income atspecific rates
and is charged for each year of income. Taxable income is derived from three
main sources of income as explained in part (A) of this book
Income Tax may be categorized into:

• Individual Income Tax that is imposed on all individuals engaging in

income generating activities/businesses.
• Corporation Tax that is imposed on all corporate entities engaging
in income generating activities/businesses.
• Pay As You Earn (PAYE) that is charged on employees
(earning monthly income above 235,000) by employers and then
remitted to URA on behalf of the employees.
• Withholding Tax (WHT) that is withheld at source. This tax is an
advance tax and as such the taxpayer needs to clearly declare it in
the applicable tax return such that it reduces the tax liability of the
period it relates to.
• Rental Tax that is imposed on the total amount of rent derived by
a person for the year of income from the lease of immovable
property (land and/or buildings) in Uganda.

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 Domestic Taxes

Note that ground rent and property fees charged by local authorities do not
affect rental tax for individuals; however, where applicable they are allowed
as expenses for non-individuals when computing their rental tax.

1.4.2 Value Added Tax (VAT)

This is a tax imposed on the supply of taxable goods and services made by a
taxable person and imports of taxable goods or services other than exempt
goods or services as listed in section 19 and 20 of the VAT Act Cap 349.
All persons dealing in taxable supplies with a gross turn over above 150 million
are required to register for VAT.

General Requirements for VAT Registration include;

• The applicant must be already in business of supplying taxable goods
or services
• 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 re
turns
• The applicant should be a fit and a proper person in the opinion of
the Commissioner General

1.4.3 Local Excise Duty (LED)

This is a tax charged on specific goods and services (excisable goods and
services) manufactured locally or imported using the rates listed in schedule
2 of the Excise duty Act 2014. (see appendix)
“Excisable goods and services” are listed in schedule 2 of the Excise duty
Act 2014.

All persons dealing in excisable goods and services must obtain a license
from URA for the purpose of local excise management and regulation. This
license is valid for one year and thus should be renewed annually.
Note:
• A manufacturer of excisable goods becomes liable to pay excise duty
when the goods are removed from his premises.
• A person providing an excisable service becomes liable to pay excise
duty on the date of provision of the service
• An importer of excisable goods pays excise duty on importation of
the goods

1.4.4 Gaming Tax

This a tax imposed on every promoter of gaming and pools promoted within
Uganda and on every principal agent of every promoter of gaming and pools
promoted outside Uganda.
Note that the commissioner can register a person for an additional tax type when
satisfied that he/she fulfills the registration requirements therein.

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Domestic Taxes

1.5 Benefits of acquiring a TIN

i. Obtaining a TIN enables you to:

• Import or export goods within and outside Uganda
• Claim tax benefits that accrue to you e.g. tax refunds etc
• Access bank loans
• Acquire a trading license from Local Government / KCCA to
undertake business in their jurisdiction.
• Register your Motor Vehicle
• Process stamp duty on land transactions above 50 Million
Shillings. etc

ii. A TIN acts as a security measure on transactions regarding some

assets e.g. motor vehicles, land or any other property since a
notification is sent to the owner using their TIN whenever a
transaction occurs in regard to the same asset

Note:
• In case a taxpayer is not in position to effectively handle his tax
matters, he can appoint a tax agent to transact with URA on his/
her behalf
• In case a taxpayer temporary closes business with the intention
of resuming, he can deactivate his TIN and later on reactivate it
when the business resumes
• In case the commissioner is convinced that a taxpayer no
longer satisfies the registration conditions, he can always
deregister that person

1.6 Tax Agents

A tax agent is a person licensed by the Tax Agents Registration

Committee (TARC) to handle tax related issues on behalf of the tax payer.
An agent can be an individual, partnership, or company.

Tax related issues may include;

• Preparation, certification and filing of tax returns and reports
required by the authority.
• Preparation of requests for ruling and correspondences with the
Authority.
• Attending meetings and hearings on behalf of the taxpayer.

A Tax Agents Registration Committee (TARC) is a committee that han-

dles registration, renewal and cancellation of the registrations of tax
agents and it comprises of 5 members and these are;

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 Domestic Taxes

• The commissioner General of Uganda Revenue Authority.

• A representative from the accountancy profession nominated
by the institute of Certified Public Accountants
(ICPAU)
• A representative from the legal profession appointed by the
Uganda Law Society
• 2 members from the private sector

1.7 Accounts and record keeping

• All taxpayers are required to keep proper records of all business

transactions in English language such that they can easily de-
termine their tax liability. It is recommended that records should
be kept for at least 5 years from the end of the tax period to which
they relate and for future reference.
• Where a record is not kept in English, the taxpayer will be required
to meet the cost of translation into English by atranslator ap-
proved by the Commissioner. However, the tax returns and other
correspondences with the Commissioner must be in English.

1.8 Changes in registration details

All registered tax payers are required to update their registration details
using their accounts on the URA website (or through submission of signed
manual amendment forms to any nearest URA office if they fail to access
their account online) as soon as an amendment is made in the registration
details. This will enable timely and accurate dissemination of correct infor-
mation to the parties concerned regarding the taxes whenever need arises.

Some of the registration amendment indicators include;

• Errors in registration details.
• Changes in ownership/directorship of the business.
• Changes in location or nature of business.
• Changes in business contact or contact person details.
• Changes in registered tax types. etc.
1.9 Penalties and Offences under registration

• he penalty for a person who fails to apply for registration, cancel a

T
registration or notify the Commissioner of a change in registration
or circumstances is;
• A fine not exceeding Shs. 3,000,000 or imprisonment not exceeding
six years or both on conviction if the failure/act was done knowingly
or recklessly.

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Domestic Taxes

• A fine not exceeding Shs. 1,000,000 or imprisonment not exceeding

two years or both on conviction in any other case.
• A person who uses a false TIN on a tax return or other document
prescribed or used for the purposes of a tax law, knowingly or reck-
lessly or not, commits an offence and is liable on conviction to a fine
not exceeding Shs. 3,000,000 or imprisonment not exceeding six
years or both.
• The penalty for knowingly or recklessly or not failing to maintain
records as required under any tax law is a fine not exceeding Shs.
2,000,000 or imprisonment not exceeding six years or both on con-
viction.

Note that Taxpayers will always receive feedback on their applications

through accurate email addresses and telephone numbers indicated in
the applications.

2.0 | Return filing

• A tax return is a declaration in a form prescribed by the
Commissioner, on which a taxpayer reports his or her income for the
tax period as a way of self-assessment for taxation purposes.
• A tax period is the duration for which a return is required i.e. a year,
month or week.
• A due date is the deadline for filing a return beyond which a person
is required to pay a penalty.

2.1 Furnishing of returns

A taxpayer registered with URA for any tax type other than Pay
as you earn (PAYE) has an obligation to submit a return for the tax
period fined by the respective tax law. URA has facilitated the
taxpayers to fulfill this obligation by introducing electronic filing of
tax returns.

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Return type Due date and filing remarks

Income tax • Every tax payer is required to furnish a return of
provisional tax estimate
(i) On or before the last day of the third, sixth, ninth
and twelfth months of the year of income in respect
of an individual taxpayer’s liability; for a period of
three, six, nine or twelve months; and
(ii) On or before the last day of the sixth and twelfth
months of the year of income in respect of a
taxpayer’s liability other than an individual; for a
period of six or twelve months.
• All tax payers are required to submit final Income
tax returns (including rental income returns where
applicable) for each year of income not later than
the sixth month after the end of the year of income.

Those with an annual turnover above 500 million shillings

must file their income tax returns with audited financial
statements prepared by an accountant registered by the
Institute of Certified Public Accountant of Uganda.
VAT • All VAT registered taxpayers are required to submit
Value Added Tax returns (VAT) for each month by
the 15th day of the following month.
PAYE • All PAYE registered taxpayers are required to submit
Pay As You Earn (PAYE) tax returns for each month
by the 15th day of the following month.
Excise duty • All taxpayers registered for Excise duty are required
to file Excise duty returns for each month by the 15th
day of the following month.
Gaming Tax • All tax payers registered under Gaming and Pool
Betting are required to submit their weekly returns
by Wednesday of the following week.
Others • In case of any return required to be submitted un-
der the tax law, it must be done within the specified
period in the notice

Note that all tax returns must be submitted in the prescribed format and
the commissioner can appoint any other person to assist a taxpayer who
fails to file at his/her cost.

Note The law provides for a separate quarterly return for non-resident
suppliers of services deemed to be supplied in Uganda when made to
non-taxable persons

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A taxable person who is providing services to a non-taxable person in Uganda

and is engaged in providing services in connection to.
• Immovable property in Uganda;
• Radio or television broadcasting services received at an address in
Uganda;
• Electronic Services delivered to a person in Uganda;
• Transfer, assignment, or grant of a right to use a copyright, patent,
trademark, or similar right in Uganda;
• Telecommunication services other than those by a supplier of tele
communication services or services to a person who is roaming while
temporarily in Uganda

These shall be required to file returns within 15 days after the end of the three
consecutive calendar months.

2.2 Certification of tax returns

All tax agents are required to provide the taxpayers with a signed certificate
stating the documents used in preparation of their returns and must certify
that all documents have been examined and thus reflect the correct data
and transactions for the return period.

Note that;
• Tax agents who do not provide the certificate will be required to
write to the taxpayer clearly explaining the reasons.
• Tax agents who prepare or assist in the preparation of tax returns
are required to make a declaration in the taxpayer’s return stating
whether a certificate or a statement has been provided to the
taxpayer and he may be requested to provide a copy.
• Tax agents are required to keep copies of certificates and
statements provided to taxpayers for a period of five years from
the date of filing the related tax return.

2.3 Advance returns

The commissioner may by notice in writing at any time during the tax period
require a tax payer to file a return for the stated tax period by the date
specified in the notice (the date may be before the end of the tax period)
if there is proof that;
• A taxpayer has died,
• A taxpayer has become bankrupt or gone into liquidation,
• A taxpayer is about to leave Uganda permanently or any other
reason the Commissioner considers appropriate.
Note that the taxpayer is also required to pay any tax due under the return
by the stated date in the notice.

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2.4 Extension of Return Filing date

If a taxpayer is not able to file a return by the required date, he can apply
for an extension to file his return providing reasons justifying the extension.
Note that;
• The extension if granted will not exceed 90 days and does
not change the due date for payment of the tax due. Interest
will therefore accrue on any outstanding tax liability.
• Multiple extension applications are allowed provided the number
of days does not exceed 90 days in aggregate.
• If the taxpayer is dissatisfied with the Commissioner’s decision
about the extension, he may challenge it under the objection and
appeals procedure.

2.5 Offences and penalties on returns

• The penalty for failure to furnish a tax return by the due date or
within a further time allowed by the Commissioner is a fine not exceeding
Shs. 1,000,000 and failure to furnish the return within the time prescribed
by court is a fine not exceeding Shs. 2,000,000 on conviction.
• If you understate provisional chargeable income by more than 10%
of actual chargeable income, the penalty is 20% of the difference in tax
on the taxpayer’s estimate and 90% of the actual chargeable income.

• The penalty for knowingly or recklessly making false or misleading

statements or omitting from a statement to a tax officer, a matter
or thing is a fine not exceeding two hundred currency points that is
Shs. 4,000,000 or imprisonment not exceeding ten years or both on
conviction.
2.6 Return filing procedure

Returns can be filed online when you visit the URA web portal (https://
www.ura.go.ug), click on download online forms to access the respective
return forms, Fill the form to generate an upload file, log into your account
to upload and submit. If the upload is successful, the taxpayer will receive an
auto generated e-acknowledgement receipt which is evidence of submission.

In case of any challenges in filling the respective returns, send an email about
the challenge to the official email address services@ura.go.ug or call the toll
free line 0800117000/0800217000.

NB: Both Payment and Return should be made by the filing due date.

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2.7 Return Ammendments

A taxpayer may amend the tax return on condition the return is not under
investigation and amendment is done within 3 years from the date on which
the original return was lodged by the taxpayer.

3.0 | Assessments

An assessment is a tax form showing the estimated taxable income generated

and the tax payable on it including any penalty.

3.1 Self-Assessment
This is a tax form prepared by the tax payer showing the taxable income
generated and the tax payable on it.
Note;
• If a tax payer has submitted a self-assessment for a tax period,
he is treated as having declared the amount of tax payable for the
period. This is done through return filing.
• If a tax payer declares a loss for a return period, he is treated as
having made an assessment of the amount of the loss for that year,
being that amount in his return.

3.2 Default Assessment

This is a tax form showing the estimated taxable income generated and
the tax payable on it issued by the Commissioner due to failure to furnish a
self-assessment by the required date.

The taxpayer will receive a notice in writing showing the amount of tax as-
sessed, and any penal tax and interest payable in respect of the amount as-
sessed, assessed period, the due date for payment and the objection criteria.

3.3 Additional Assessment

This is an amendment of an original tax assessment issued by the commis-

sioner for any tax period to ensure that the correct tax liability is obtained.

It is issued at any time, if fraud or any willful neglect has been committed
by, or on behalf of the taxpayer or new information has been discovered in
relation to the tax payable for a tax period.

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Note:
• All self-assessment returns filed before 1st July 2016 can be amended
within a three year period form the filing date while those filed after
1st July 2016 can only be amended within a twelve months period
from the filing date provided the return is not under investigation.
• An additional assessment notice will show the amount of tax assessed,
and any penal tax and interest payable in respect of the amount
assessed, the assessed period, the due date for payment and the
objection criteria.

Note that the service of a notice of an additional assessment does not change
the due date for payment of the tax payable under the assessment and thus
the penal tax and interest is payable based on the original due date.

4.0 | Objections
5.0 and Appeals
Objections and Appeals

4.1 Objections

The Objections and Appeals procedure is a procedure for challenging an as-

sessment or any other matter based on discretion by the Commissioner and is
provided for under; The Tax Procedures Code Act - Sections 24 & 25

• A person dissatisfied with a tax decision for example an assessment,

may within 45 days after receiving notice of tax decision, lodge an
objection with the Commissioner.
• The objection should be in a prescribed form and state precisely
the grounds upon which it is made. There should be sufficient
evidence to support the objection.
• Where a taxpayer has lodged an objection to a tax assessment for
the tax period, the Commissioner may consider the objection if
the taxpayer;

1. Has filed the return to which the assessment relates in the case
of a default or advance assessment;
2. Has paid the tax due under the return to which the assessment
relates together with any penalty or interest due

• A taxpayer may apply in writing to the Commissioner for an

extension of time to lodge an objection.
• The Commissioner may, if satisfied with the grounds upon which the
application is made, grant an extension for such period as the
Commissioner determines.
• The Commissioner may make a decision on an objection;
1. To a tax assessment affirming, reducing, increasing or otherwise
varying the assessment to which the objection relates; OR

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2. To any other decision affirming, varying or setting aside the

decision.

• The Commissioner shall within 90 days from the date of receipt of

the objection, serve notice of an objection decision.
• Where an objection decision has not been served within 90 days,
the person objecting may, by notice in writing to the Commissioner,
elect to treat the Commissioner as having made a decision to allow
the objection.
• Where a person makes an election, the person is treated as
having been served with a notice of objection decision on the date
the person’s election was lodged with the Commissioner.

Note that this time limit for making an objection decision is waived where a
review of the taxpayer’s records is necessary for settlement of the objection
and the taxpayer is notified.

• Where the Commissioner reviews the taxpayer records, the

Commissioner shall with in ninety days, notify the taxpayer of the
review.
• A person dissatisfied with an objection decision may, within 30 days
after being served with a notice of the objection decision;
a) May apply to the Commissioner to resolve the dispute using alternative
dispute resolution procedures that may be prescribed by the Minister
through regulations. This may present other avenues for taxpayers who
would like to review tax decisions issued by URA without necessarily lodging
an appeal to the Tax Appeals Tribunal.

4.2 Appeals

4.2.1 Tax Appeals Tribunal (TAT)

A person dissatisfied with the decision of the Commissioner may appeal to
the Tax Appeals Tribunal

A person intending to lodge an appeal against the decision of the

Commissioner shall do so within 45 days after being served with the decision
and shall serve a copy of the appeal on the Commissioner.

4.2.2 High court

A person dissatisfied with a decision of the Tribunal may, within 30 days
after being served with a notice of the decision, lodge an application with
the High Court for review of the decision.

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4.2.3 Court of Appeal

• A person dissatisfied with a decision of the High Court, arising from
appeals to the TAT, may, within 30 days after being served with a notice
of the decision or within further time as the Court of Appeal may allow,
lodge an application with the Court of Appeal for review of the
decision. This appeal will be on questions of law only.
• The Court of appeal shall inquire and determine the appeal
expeditiously and shall declare its findings not later than 60 days from
the date of filing the appeal.

4.2.4 Supreme Court

• An appeal to the Supreme Court may be lodged with a certificate of
the court of appeal that the matter raises questions of law of great
public importance or if the Supreme Court in its overall duty to see that
justice is done, considers that the appeal should be heard.
• The Supreme Court shall inquire and determine the appeal expeditiously
and shall declare its findings not later than 30 days from the date of
filing the appeal.”
• Where the decision maker is required to refund an amount of tax to a
person as a result of a decision of a reviewing body, the tax shall be
repaid with interest at the rate specified in the relevant law on the
amount of the refund for the period commencing from the date the
person paid the tax refunded and ending on the last day of the month
in which the refund is made.

Reviewing body means the Tribunal, the High Court, the Court of Appeal
and the Supreme Court.

4.3 Burden of proof

• For any objection to a tax assessment, the burden is on the taxpayer

to prove that the assessment is incorrect.
• For any other tax decision, the burden is on the person objecting to
the decision.

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5.0 | Payment and Recovery of Tax

5.1 Payment of Tax
All taxpayers are required to pay their tax liabilities by the due dates of filing
the respective returns to avoid accumulation of interest. Thus any tax payable
is a debt to the Government of Uganda.

A taxpayer can apply in writing to the Commissioner for an extension to pay

tax at a later date but this does not change the payment due date and thus
interest will be charged on any outstanding liability from the date when the
payment was due.

5.1.1 Procedure for paying tax;

• Taxes are paid through registering a payment online or using the
Askura App (downloadable from google store) and then effecting
the payment either in the Bank, through Mobile Money or Payway
services.
• To register a tax payment online, visit the web portal (ura.go.ug),Click
on eservices, select Payment Registration under Payments.
• Select the tax head, go to details of Tax Type and select the
appropriate tax head from the drop down and input the tax amount.
• Fill in the details of the Taxpayer and bank, enter the text from given
image (Please note that the letters are case sensitive and there is no
space between values)
• Click Accept and Register button and print out the Payment
Registration Slip that appears on submission of payment details.
• Take the printed form to the bank to effect payment or use the
payment registration number on the form to effect the payment
through Mobile money, Payway or Visa/ Master Card Services.
Note:
• Any unpaid tax shall be collected by the Commissioner through
serving a notice of demand on the person liable and he will be
given at least 28 days from the notice date within which to pay any
outstanding amount specified in the demand notice.

• If a taxpayer has an outstanding liability and pays any amount, the

amount paid will be allocated in the order of Principal tax liability
first, Penal tax and Interest due (PPI).

• If a taxpayer has tax liabilities from more than one tax period at
the time a payment is made, the amount will be used to clear the
oldest liability first in the same order above. (PPI).

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• If there is evidence that a taxpayer may leave Uganda permanently

without paying tax that is due, the Commissioner may request the
immigration control officer to prevent that person from leaving
Uganda until a full payment of the tax is made or a financial bond
is executed guaranteeing payment of the tax liability.

• Provisional tax by a company is paid in two installments on or before

the last day of the sixth and twelfth months of the year of income.

• Provisional tax for an individual is payable in four installments on or

before the last day of the third, sixth, ninth and twelfth months of
the year of income.

Using these 24 hour services, the taxpayer’s costs of movement between

his/her premises and URA or the bank are reduced and thus saving time
and money. Taxpayers can also monitor the status of their payments online
through the web portal.

5.2 Recovery of tax

In case a tax payer fails to pay the tax due, the tax liability may be collected
using any of the methods applicable below;
• Distress proceedings: i.e. Goods on which the assessed person has
a claim may be sold in order to recover tax.
• Through Agency Notices: Whereby a person who has money or
other liabilities of the assessed person is required to pay the held
amount directly to URA.
• Temporary closure of business premises; i.e. the commissioner may
temporarily close part or whole of the taxpayer’s business
premises for a period not exceeding 14 days.
• Charge over immovable property: i.e. the Commissioner may in
form the Registrar of titles that the land or buildings in the notice
are the subject of a security for unpaid tax. If the tax is not paid
within twelve months, distress proceedings may commence.
• Seizure of goods; i.e. a tax officer may seize goods in case there is
proof that the taxes due have not been paid in respect of the
supply or import of the goods.
• Security for unpaid tax: i.e. a taxpayer may be requested to
provide security by bond, deposit, or proof of the payment of tax
that may become payable, if there is reason to believe that;
a taxpayer establishing a business in Uganda intends to carry on
the business for a limited time only; or may not pay tax when it
becomes payable.

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6.0 | Determination of Tax liablity

The basis for determination of Income tax liability for resident persons is the
gross income of the person reduced by allowable deductions and any foreign
income tax paid on foreign income included in the gross income referred to
as a foreign tax credit, not exceeding the Ugandan income tax payable on the
foreign source income for that year. Allowable deductions are expenditures and
losses incurred when deriving chargeable income.

The general rule is that for expenditure to be allowed it must have been incurred
to produce the income that has been declared as gross income. Where the
expenditure is only partly incurred in the production of income included in the
gross income, the Income Tax Act provides for apportionment such that the
deduction allowed is only to the extent to which it was so incurred.

Accordingly, the general features of deductions are:

a) There must be an expenditure or loss
b) The expenditure or loss must be incurred by a person during the year
of income
c) The expenditure or loss must be incurred in the production of income
included in gross income.

The Income Tax Act lists, under sections 22 – 38, a number of expenditures and
loses that are allowable deductions. For instance, Interests, bad debts, repairs,
depreciation, initial allowances, startup costs, meals, etc. Capital expenditure
e.g. purchase of a motor vehicle is not in itself an allowable deduction but it is
allowed capital deduction for its depreciation. Likewise all depreciable assets
are allowed a deduction as specified in the Sixth schedule of the Income tax Act.

Capital allowances are thus treated as operating expenses and deducted in

arriving at chargeable income or profits chargeable to tax. Deductions allowed
on capital expenditure include the following categories:

1. Depreciable assets — varies as per 6th Schedule of the Act

2. Industrial building — 5% straight line depreciation allowance
3. Startup costs — 25% per year for four years
4. Costs of intangible assets — actual cost
5. Farm works deductions — 20% for five years
6. Deductions on mineral exploration expenditure — all capital expenditure

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Capital allowances are calculated for a year of Income and are granted as a
deduction when the capital asset is put to use.

7.0
7.0 | Persons assessable
Persons assessable to tax to Tax

7.1 Taxation of Small Business Taxpayers (Presumptive Tax)

The concept of small businesses in taxation was developed to accommodate
low income taxpayers who would ordinarily find it difficult to prepare formal ac-
counts. The preparation of these accounts would usually require engagement of
a professional accountant which is costly. In order to address this challenge, the
Income Tax Act provides for an arrangement of taxing small businesses based on
gross turnover or total sales. This is commonly referred to as presumptive tax.

7.1.1 Who is a Small Business Taxpayer?

For income tax purposes, a small business taxpayer is a resident taxpayer whose
gross turnover from all businesses owned by such a person in a year is more
than five million shillings but does not exceed ONE HUNDRED FIFTY MILLION
SHILLINGS. The term TURNOVER refers to one’s total sales in a year. However,
persons in the following business activities are excluded from presumptive tax:

• Medical practice • Dental practice

• Architectural service • Engineering service
• Accounting and audit practices • Public entertainment services
• Legal practice • Public utility service
• Any other professional services • Construction service

Note: Persons outside the presumptive scheme are required by law to file
provisional and final income tax returns and be assessed to tax based on charge-
able income for the year.

7.1.2 Determination of sales for a Small Business Taxpayer

A taxpayer ought to keep records of his or her daily sales which is the basis for
determining the tax bracket under which he or she falls.

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Domestic Taxes
Daily sales may be recorded as follows:

Keeping this kind of record of daily sales helps a presumptive taxpayer

in ascertaining the monthly, quarterly and annual total sales on which tax
payable would be based. This record will also assist the trader during inspec
tion by URA staff to determine a correct tax payable.

Schedule for the computation of “presumptive” income tax for small businesses

Gross turnover per annum With records Without records

Not exceeding UGX 10 million NIL NIL

Exceeding UGX 10 million 0.4% of annual turn- UGX 80,000
but does not exceed UGX 30 over in excess of 10
million million
Exceeding UGX 30 million UGX 80,000 plus 0.5% UGX 200,000
but does not exceed UGX 50 of annual turnover
million in excess of UGX 30
million
Exceeding UGX 50 million UGX 180,000 plus 0.6% UGX 400,000
but does not exceed UGX 80 of annual turnover
million in excess of UGX 50
million
Exceeding UGX 80 million UGX 360,000 plus UGX 900,000
but does not exceed UGX 150 0.7% of annual turnover
million in excess of UGX 80
million
Illustration
Mukasa owns two businesses. One is a shop located in Mpigi and while another
is a carpentry located in Wakiso. Every year, he derives 60 million from the shop
in Mpigi and 65 million from the workshop in Wakiso. Mukasa is not good at
keeping records but has a counter book where he records daily sales.
Question: Calculate Mukasa’s tax payable every year

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Solution:
Total chargeable income = Income from Mpigi + Income from Masaka
= 60,000,000 + 65,000,000
= 125,000,000
Tax payable = 360,000 + 0.7% of (125,000,000 – 80, 000,000)
= 360,000 + 0.75X 45,000,000
= 360,000 + 315,000
= 675,000

Note: No deductions are allowed in respect of any expenditure or losses and

the assessed tax is final for presumptive tax payers, however one has an option
of filing returns

7.1.4 Key features of the presumptive tax regime

• The tax is computed on the basis of a GROSS TURNOVER; and is a

final tax.
• No deductions are allowed in respect of any expenditure or losses.
• No tax credit is allowed to be offset against the final tax except in
the following cases:

1. A tax credit arising out of withholding on receipt included in the

gross turnover of the taxpayer
2. Any provisional tax paid against the taxpayer’s gross turnover during
the year of Income
Note: No deductions are allowed in respect of any expenditure or losses and
the assessed tax is final for presumptive tax payers, however one has an option
of filing returns

7.1.5 Election (Option) not to be under Presumptive Tax

A taxpayer who would ordinarily fall under the presumptive tax regime may
opt out by notifying the Commissioner in writing to be assessed on chargeable
income. The chargeable income method involves the preparation of financial
statements by the taxpayer. Such a taxpayer is required to submit the election
notice together with their Annual Income Tax Return for that year by the due
date of filing such return of income.

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7.2 Individual Income Tax

This is imposed on income from business, employment and/or property. For

a resident person, income tax is charged on gross income from all over the
world where as for a non- resident person, it is only charged on income de-
rived from sources within Uganda.

Taxpayers, whose turnover is above sh150m, must file annual Income Tax
returns such that the tax is computed on their net profits as illustrated below:
Rates for resident individuals
Chargeable income Rate of tax

Not exceeding Ushs 2,820,000 NIL

Exceeding Ushs. 2,820,000 but 10% of the amount by which chargeable
not exceeding Ushs. 4,020,000 income exceeds Ushs. 2,820,000
Exceeding Ushs. 4,020,000 but Ushs. 120,000 plus 20% of the amount by
not exceeding Ushs. 4,920,000 which chargeable income exceeds Ushs.
4,020,000
Exceeding Ushs. 4,920,000 (a) Ushs. 300,000 plus 30% of the
amount by which chargeable income ex-
ceeds Ushs. 4,920,000
(b) Where the chargeable income of
an individual exceeds Ushs 120,000,000.
An additional 10% charged on the amount
by which chargeable income exceeds
120,000,000
Rates for non-resident individuals
Chargeable income Rate of tax

Not exceeding Ushs 4,020,000 10%

Exceeding Ushs. 4,020,000but Ushs. 402,000 plus 20% of the amount by
not exceeding Ushs. 4,920,000 which chargeable income exceeds Ushs.
4,020,000
Exceeding Ushs. 4,920,000 (a) Ushs. 582,000 plus 30% of the
amount by which chargeable income ex-
ceeds Ushs. 4,920,000
(b) Where the chargeable income of
an individual exceeds Ushs 120,000,000.
An additional 10% charged on the amount
by which chargeable income exceeds
120,000,000
Note: The basis for determination of Income tax liability for traders is the gross
income generated reduced by allowable deductions and any income tax paid
or withheld at source on the gross Income for that year.
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 Domestic Taxes

Illustration
Mr Mbayo received 135m from the supply of his products to Kira Investments
in Mpigi during 2014/2015 of which 8.1m (6% on 135m) was withheld by Kira
Investments.
From the beginning of the year, he incurred the following costs.
i. Production costs……………………………………………………………….……………….22m
ii. Direct costs (e.g Transportation of products)……………………………..…5m
iii. Administration costs (including
Annual salary for 2 employees……………………………………….……….………24m
Annual rent for store……………………………………………………………………….…..8m
Fuel expenses………….………………………………………………………………..………...14m
iv. Annual staff party………………………………………………………………………………...9m

Calculate his Income Tax Liability for 2014/2015.

Solution
Gross Income from sales………………………………………………………………...135m
Less
Production costs…………………………………………………………………………..…….22m
Direct costs……………………………………………………………………………………………5m

Gross Profit……………………….......................................................................108 m
Less Allowable deductions
Annual salary for 2 employees…………………………………………………….….24m
Annual rent for store……………………………………………………………………………8m
Fuel expenses………………………………………………………………………………….….1.4m
Chargeable Income…………………………………………………………………….….….62m

Income Tax Liability
Since his chargeable income falls in the fourth category, then
Tax Liability = (62,000,000-4,920,000)*30% + 300,000..……………….17.424m
Less withholding Tax at source……………………………………………………………..….......8.1m
Net tax liability (Income Tax – Withholding tax)……………………………………..324m

Note that the expense incurred for the annual staff party (9m) does not account
for the allowable expenses in the generation of his gross income.
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Domestic Taxes

7.3 Corporation Tax

A company is defined as a body of persons corporate or unincorporate,
whether created or recognised under the law in force in Uganda or elsewhere
and includes a unit trust, but does not include any other trust or partnership.
Accordingly, limited liability companies, companies limited by guarantees,
associations and Non-Government Organisations among others are taxed
under the company taxation regime.
Based on the above definition, even non-resident companies are assessable
(subject) to tax in Uganda on their income that is derived from Uganda while
resident companies are subject to tax on their worldwide income. Income tax
paid by companies is referred to as corporation tax.
Income tax on companies is imposed under the Income Tax Act on every
person who has chargeable income for any year of income. The current rate
of tax applicable to companies is 30% charged on the profits from business
(Chargeable Income). The chargeable income for both resident and
non-resident companies is taxed at this rate.
7.3.1 Determination of the Tax liability for companies (Non- individuals)

Sale of goods (clothes, shoes,

Poultry, Timber, beans) 200,000,000
Add Other income
(eg subletting of space for rent) 39,000,000
Total revenue from trading 239,000,000
Less: Costs of goods sold
Purchases 15,000,000
Direct labor- (sales girl, planting,
weeding, feeds) 14,000,000
Cost of direct overheads (direct
power, water, etc.) 5,000,000
Total Production Costs 34,000,000
Other costs:
Less Administrative costs
(Worker salaries, office power,
Water, rent, etc.) 16,000,000
Total costs 50,000,000
Net Profit/Loss(Chargeable Income) 189,000,000

Tax at 30% 56,700,000

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 Domestic Taxes

7.4 Pay As You Earn (PAYE)

This is a tax levied on the Gross salary on employees (earning income above
235,000) by employers and then remitted to URA on behalf of the employees.
If you have employees who earn a monthly income above shs 235000/=, you
are required to withhold and remit monthly PAYE by the 15th of the month
following one in which tax is withheld as per the PAYE rates below.

7.4.1 Rate of tax for resident individuals

Monthly emoluments Tax Rate (Bracket)

Not exceeding Shs 235,000 Nil
10% of the amount by which
Exceeding Shs 235,000 but not
chargeable income exceeds Shs
exceeding Shs 335,000
235,000.
Shs 10,000 plus 20% of the amount by
Exceeding Shs 335,000 but not
which chargeable income exceeds Shs
exceeding Shs 410,000
335,000
(a) Shs.25,000 plus 30% of the amount
by which chargeable income exceeds
Shs.410,000
(b) Where the chargeable income of an
Exceeding Shs 410,000
individual exceeds Shs. 10,000,000 an
additional 10% charged on the amount
by which chargeable income exceeds
Shs. 10,000,000.
7.4.2 Rate of tax for non-resident individuals

Monthly emoluments Tax Rate (Bracket)

Not exceeding Shs 335,000 10%
Shs. 33,500 plus 20% of the amount
Exceeding Shs. 335,000 but not
by which chargeable income exceeds
exceeding Ushs. 410,000
Ushs. 335,000
a) Shs. 48,500 plus 30% of the
amount by which chargeable income
exceeds Ushs. 410,000

Exceeding Shs. 410,000 b) Where the chargeable income of an

individual exceeds Ushs 10,000,000 an
additional 10% charged on the amount
by which chargeable income exceeds
10,000,000

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Illustration

Acul Ocolo is employed as a security guard in Karacen (U) Ltd. He earns a

monthly salary of Shs 225,000.

Required: Is Karacen (U) Ltd obliged to deduct PAYE tax from Acul Ocolo?

Solution: No, because Acul Ocolo’s monthly salary is less than the threshold
so his salary does not attract PAYE.

Illustration

Alech earns a monthly consolidated which includes a monthly salary of

200,000, transport allowance of Shs 75,000 and medical allowance of Shs
95,000, the amount of Pay as You Earn to be deducted is calculated as below:

Gross Employment Income:

Salary ...................................................................................... 200,000

Transport allowance ............................................................. 75,000

Medical allowance ..................................................................95,000

Total ...........................................................................................370,000

His gross employment income lies in category three and thus we shall use
the rates in the third bracket, i.e.

Exceeding Shs 335, 000 but less than 410,000 (10000 + 20% of the amount
by which chargeable income exceeds Shs 335, 000)

Chargeable income = Shs (370,000 - 335,000) = 35,000

PAYE to be deducted =shs 10,000 + 20% × 35,000 = 17,000

7.4.3 Employer’s Obligation

• Withhold tax from employment income: to deduct the correct tax
from the employee’s total employment income at the time of
effecting payment to every liable employee
• Payment: to pay to URA the total tax by the 15th day of the month
immediately following the month in which employment Income
was paid
• Accountability: to account for the tax deducted from every
employee on a monthly basis to Uganda Revenue Authority.
Maintenance of Employees’ Records: to maintain records and keep
them for inspection by URA on demand for at least five years

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 Domestic Taxes

7.4.4 Employee’s Obligation

Employees deriving income from more than one source are required to complete
an end of year return to declare:
• Total income from all sources, including business income
• Total taxes paid at source such as PAYE and withholding tax or pro-
visional tax. This excludes presumptive tax and rental tax paid by
such employee
• Tax payable

7.4.5 Employee’s Rights

An employee:
• Is not required to furnish a PAYE return if tax is fully deducted and
paid at source
• Is entitled to claim refund of over-paid tax where applicable
• Is entitled to accountability for all taxes deducted and paid at source
by the employer.
7.4.6 What happens if tax is not paid?

An employer who fails to withhold and pay the tax as required by law is per-
sonally liable to pay the tax together with any penal tax and interest thereon.
He may however recover it from the employee.

7.5 Withholding Tax (WHT) System

The Income Tax Act Cap 340 specifies the persons who are required to with-
hold tax as well as those upon whom the tax should be imposed, depending
on the nature of the transaction. This tax is deducted at source by a with-
holding agent upon making payment to another person.

A withholding agent is the person making payment and obliged to withhold

tax; and the recipient of the payment is the payee.

Withholding tax modules include;

• Employment income: Tax is deducted by the employer from the em-

ployment income of every liable employee on a monthly basis under the
PAYE system.

• Payments on professional fees: A resident person who pays

management or professional fees to a resident professional is required
to withhold tax at 6% of the gross amount of payment. Excluded from
this provision are professionals whom the Commissioner is satisfied have
regularly complied with the obligations imposed by the Income Tax Act,
and those professionals ordinarily engaged as payroll employees.

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Domestic Taxes
• Withholding tax on payments to foreign entertainers and sports
persons: Tax is charged at a rate of 15% on payments to nonresident
entertainers, sports persons or theatrical, musical or other group of
nonresident entertainers or sports persons who derive income from any
performance in Uganda. The obligation to withhold the tax is placed
with the person making the payment e.g. promoter, agent, or such
similar person.

• Withholding tax on Interest: A resident person who pays interest to

another resident person is required to withhold tax at 15% of the gross
amount of the interest paid. Withholding tax is, however, not applicable
where interest is paid by a natural person (individual), paid to a financial
institution, paid by a company to an associated company or exempt
from tax in the hands of the recipient. Where tax is withheld on payment
of interest by a financial institution to an individual, the tax withheld is
a final tax on the income.

• Payments to non-resident contractors or professionals: Tax is imposed

on every non-resident person deriving income under a Ugandan source
service contract. The tax is charged at 15% of the gross amount of
payment and the person making the payment should withhold the
relevant tax before effecting the payment.

Note: A Ugandan source service contract is a contract under which the

principle purpose is the performance of services which gives rise to income
sourced in Uganda, and any goods supplied under the contract are only
incidental to the purpose. A Ugandan-sourced service contract excludes
an employment contract.

• Payments on dividends: A resident company which pays a dividend to

a resident shareholder is required to withhold tax at 15% of the gross
amount of the dividend paid, except where the dividend income is
exempt from tax in the hands of the shareholder. However, where the
dividend is paid by a company listed on the stock exchange to a resident
shareholder, the rate is 10% on the gross amount.

• Payment for Goods and services: Any payment of amounts in total

exceeding Shs 1,000,000 to any person in Uganda for the supply of
goods, materials of any kind or services, is required to withhold 6% of
the gross amount. The threshold of Shs 1,000,000 is in respect of the
total contract value, implying that separate supplies which constitute
one contract are subject to the 6% withholding tax regardless of the
fact that the amount paid per a single supply or transaction is less than
the threshold value.

• International payments: Tax is imposed on every non-resident person

who derives any dividend, interest, royalty, natural resource payment or
management charge from sources in Uganda. The tax is withheld by the
payer at the rate of 15% on the gross amount before payment.

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 Domestic Taxes

• Payment on imports: Every person who imports goods into Uganda is

liable to pay withholding tax at 6% based on Customs Value in Uganda,
at the time of importation. This provision, however, does not apply to a
supplier or importer who is exempted from withholding tax.

• ithholding tax on commissions to insurance agents: A person paying

W
commission to an insurance agent or advertising agent shall withhold
tax at a rate of 10%.

• Gaming and pool betting: A person who makes payment for winnings of
betting or gaming shall withhold tax on the gross amount of the payment
at a rate of 15 %.

• Commission paid to telecom service providers on airtime distribution and

mobile money: A telecommunication service provider who makes a pay-ment
of commission for airtime distribution or provision of mobile money
services shall withhold on the gross amount of the payment at a rate of 10%.

7.5.1 Accountability for Withholding tax

• The withholding agent is required by the Income Tax Act to pay to URA
the tax withheld (or that should have been withheld), within 15 days
after the end of the month in which the payment was made. In the case
of a person about to leave Uganda, the tax should be withheld and paid
before the payee leaves.

• The agent is further required to maintain and avail for inspection by

URA, records of all payments to the payee(s) and the corresponding
tax withheld for five years after the end of the year of income to which
such records relate. Except where it is a final tax, tax withheld is a credit
against the tax assessed on the payee for the year of income in which
the payment is made.

• Upon withholding the tax, the withholding agent is required to issue a

withholding tax credit certificate to the payee; and then pay the tax to
URA.

7.5.2 Failure to withhold and/or remit the Tax

A withholding agent who fails to withhold tax is personally liable to pay

to URA the tax which has not been withheld and/or remitted. The agent,
however, is entitled to recover the amount from the payee thereafter. URA is
mandated to recover the tax from the agent as though it were tax due from
such agent together with the accrued interest.

Note that the amount withheld on any payment is part of your annual Tax
payment and thus reduces on your annual tax liability

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Domestic Taxes

Illustration

If Kato supplies agricultural products worth 100m to POKOT Supplies, he will

receive a net of 94 million and the 6 million (6% of 100m) will be Withheld
and remitted to URA by POKOT supplies on his behalf.

• Payments on professional fees: A resident person who pays management

or professional fees to a resident professional is required to withhold tax
at 6% of the gross amount of payment.

• Payment on imports: Every person who imports goods into Uganda is

liable to pay withholding tax at 6% based on Customs Value in Uganda,
at the time of importation. This does not apply to a supplier or importer
who is exempted from tax and exempt organizations.

Note:

• The person withholding the tax is required to issue a withholding tax

credit certificate to the payee and then pay the amount withheld to URA.

• The person withholding is required to maintain and avail for inspection

by URA, records of all payments to the payee(s) and the corresponding
tax withheld for five years after the end of the year of income to which
such records relate.

• A person who fails to withhold tax is liable to pay to URA the tax which
has not been withheld and/or remitted. He is however entitled to recover
the amount from the payee thereafter.

• A withholding tax agent who makes payment, is required to furnish a

return of withholding tax no later than 15 days after the end of every
month to which the tax relates. This is not only for PAYE but also all other
Withholding taxes.

7.6 Rental Tax

This is tax levied on income earned by a person from letting out immovable
property (land and buildings) in Uganda. For income tax purposes, it does not
matter whether the building is let out as a residence or for commercial use.
Property is let out by a landlord or landlady to another person also known
as a tenant for a consideration.

A person (landlord or landlady) may take the form of an individual e.g Robert
Wamala, a corporate body e.g., RORA Properties Ltd, Government e.g Lu-

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 Domestic Taxes

wero District Administration, an institution e.g. Makerere University, or a listed

institution such as Deposit Protection Fund of Uganda.

Taxation of Rental Income is provided for under S. 5 of the Income Tax Act. This
is rent earned by persons and is segregated and taxed separately as though it
were the only source of income for the taxpayer.
The rental income of a resident person for the year of income is charged to
tax at the rate of 30% of the chargeable income after deducting the allowable
expenses.
The rental income of a resident person for the year of income is charged to
tax at the rate of 30% of the chargeable income after deducting the allowable
expenses.

7.6.1 Computation of Rental Income Tax

Note:
• In determining the tax due, individuals may claim up to 75% of the gross
annual rental income as allowable expenses.
• In determining the tax due, a company may claim expenses in excess of
75% of the annual rental income.
• Individuals may claim interest on a mortgage from a financial institution as
expenditure over and above the 75% allowable deduction.
• The claimed expenses shall be subject to verification by Uganda Revenue
Authority, therefore only expenses that have been incurred in the genera-
tion of rental income can be claimed by individuals and non-individuals in
determining the chargeable rental income.
• Tax is charged at a rate of 30% of the chargeable rental income for the year
for both individuals and non- individuals. However for non-resident indi-
viduals, tax is charged at the rate of 15% of the gross annual rental income.

7.6.2 Individual Rental Income Tax

In computing individual rental tax for a resident individual, the following steps
are considered:
Step I:
Determine the total annual gross rent from all sources of the individual; say R;
Step II:
Deduct up to 75 percent allowance for expenses i.e. R – 75%, therefore charge-
able rental income = 25%R

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Domestic Taxes
Step III:
Deduct interest on mortgage for that property. (I.R)
Step IV:
Determine rental income tax at 30% i.e. 30 %( 25%R –I.R).
Illustration
Acul Ocolo earned annual rent of: Shs 3,500,000 from a house in Kitintale, Shs
900,000 from a house in Kabale and Shs 600,000 from a house in Ly-antonde.
He is charged an annual interest of 500,000 on a mortgage he got from the
bank to build the houses. Acul Ocolo incurred Shs. 4,000,000 as expenses in
generating the rental income.
Question: Determine the Rental tax payable
Solution: The rental tax is computed as follows:
Step I:
Determine the total annual gross rents from all sources of the individual
Gross rental income = 3,500,000 + 900,000 + 600,000 = 5,000,000
Step II:
Deduct 75 percent allowance for expenses = 75%X 5,000,000 =3,750,000 So
5,000,000 – 3,750,000 = 1,250,000
Note: Only Shs. 3,750,000 is claimed as expenses and not the Shs.4, 000,000
because Individuals are only allowed to claim expenses up to 75% of the annual
gross rental income.
Step III:
Deduct interest on mortgage for that property. (I.R)
So 1,250,000 – 500,000 = 750,000
Step IV:
Determine income tax at 30%
So 30% X 750,000 = 225,000
Rental tax payable = Shs. 225,000

7.6.3 Rental tax for partnerships

Rental tax for Partnerships is assessed on individual partners according to their
respective sharing rates using the following steps
Step I: Determine the total annual gross rent of individual partners; say R;
Step II: Deduct up to 75 percent allowance for expenses i.e R – 75%, therefore
chargeable rental = 25%R

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 Domestic Taxes
Step III: Deduct interest on mortgage for that property. (I.R)
Step IV: Determine rental income tax at 30% i.e. 30% (25%R – I.R).
Tax payable by each partner is in proportion to their partnership stake in the
partnership. For example if Partner A and B have a stake of 3:2 in a partnership,
and the rental tax payable is Shs. 500,000.
Partner A will pay 3/5X 500,000 = Shs. 300,000 while Partner B will pay
2/5X500, 000= Shs. 200,000

7.6.4 Rental Income Tax for companies and corporations

In computing rental tax for companies/corporations, the following steps are
considered:
Step I: Determine the total annual gross rent from all sources of the company;
say R
Step II: Deduct expenses (E); therefore chargeable rental income= R-E
Step III: Determine rental income tax at 30% i.e. 30% (R-E).
Illustration
RORA Properties Ltd earns Shs 25 million from its commercial building lo-cated
in Kampala, Shs. 10 million from the apartment it lets out to MTN Jinja branch
and Shs. 5 million from its building that houses a Micro Finance office in Muko-
no. Out of this Shs.1, 500,000 was incurred as interest on mortgage from the
bank and Shs. 5,000,000 as expenses in generating the annual rental income.
Question: Calculate the rental tax payable
Solution:
Step I: Determine the total annual gross rents from all sources of the company
Annual Gross rents = 25,000,000 + 10,000,000 + 5,000,000 = 40,000,000
Step II: Deduct expenses = 1,500,000+5,000,000 =6,500,000
So 40,000,000 – 6,500,000 = 33,500,000
Step III: Determine rental income tax at 30%
So 30% X 33,500,000 = 10,050,000
Rental tax payable=Shs.10, 050,000

7.6.5 Taxpayer’s obligationA taxpayer is required to:

• Complete a return of rental income for a year of income with supporting
agreements where available or rental receipts issued to tenants(s) during
the year
• Declare ALL sources of rental income in FULL for a given year of income.
The normal year of income is from July to June

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Domestic Taxes

• Submit (furnish) the provisional and annual return to Uganda Revenue

Authority, through the web portal
• or individuals, a provisional return is filed within three months from the
F
start of the year of year of income i.e. not later than 31st September; and
a final return is filed within six months after the end of the relevant year of
income, i.e. not later than 31st Decembe
• For corporates, a provisional return is filed within six months from the start
of the year of year of income i.e. not later than 31st December; and a final
return is filed within six months after the end of the relevant year of income,
i.e. not later than 31st December
• Where a provisional return has been filed, an individual should pay quar-
terly the provisional rental income tax estimate while a company should
pay every six months during the year of income

Entitlement To Tax Credit

The taxpayer is entitled to a tax credit in respect of any rental tax paid pro-
visionally or in advance during the year of Income. This however can only be
offset against rental tax liability since the source is taxed separately.

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 Domestic Taxes

7.7 Value Added Tax (VAT)

It is a tax on consumption charged on value added to “taxable” goods and
services, at different stages in the chain of distribution and is charged at a
rate of 18%. However if the seller is registered for VAT, he can claim for his
Input tax when selling the product/service.

7.7.1 Definition of key terms

• A taxable person is one who is either registered for VAT or not yet reg-
istered but is required to be registered. All persons dealing in taxable
supplies with a gross turn over above 150 million are required to register
for VAT. Such person may be an individual, partnership, company, trust,
Government as well as public or local authority.
• Output Tax is the VAT a taxable person charges upon making taxable
supplies i.e. tax charged upon selling taxable goods and services.
• Input Tax is the VAT a taxable person is charged on taxable purchases
and expenses incurred for business purposes. The purchases may be
from local sources or imported.
Conditions for granting Input Tax Credit
To claim input tax, there should be documentary evidence to show
• For local purchases/expenses, there should be an original tax invoice
• For imports, there should be the customs bill of entry, URA tax receipt
or other forms of evidence for proof of payment, airway bill/bill of lading
and other documents prescribed under the Customs Management Act
• The purchases (Inputs) must be for business purposes
Exception: Input tax credit may be allowed where the failure to acquire a tax
invoice is not the fault of the taxpayer and the amount claimed is correct. Also
if the original tax invoice is lost, one can use a certified copy from the supplier.

Period for claiming input tax

The law allows a period of six (6) months from the date of issue of the invoice
within which a person can apply for an input tax credit.
Issuance of e-invoices or e-receipts by all vat registered taxpayers
It is mandatory for all VAT registered taxpayers to issue e-invoices or e-re-
ceipts as no tax credit is allowed or claimable on purchases unless they are
supported by e-invoices or e-receipts.

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Domestic Taxes

VAT Payable vs Refundable

• When output tax is greater than input tax, the taxpayer pays the difference
and when output tax is less than the input tax, the taxpayer claims for a
refund of the difference.
For example: If output tax = 100,000 and input tax = 77,000 then
VAT payable = 100,000 – 77,000 = 23,000
• A VAT cash refund is applicable when the amount claimable is greater
than Shs. 5 million otherwise the credit will be carried forward and used
to offset the subsequent VAT liability
For example: If output tax = 100,000 and input tax = 140,000 then
VAT claimable = 140,000 – 100,000 = 40,000
Illustration
Nyero cotton farmers sold 10 tons of cotton to Brad ginnery at shs. 7,000,000.
Brad a cotton ginnery sold 10 tons of lint cotton to Nyanza textiles at shs.10,
000,000. Nyanza textiles produced bed sheets out of the cotton and sold
them to Kiyembe Ltd (a retailer) at shs 17,500,000. Kiyembe Ltd sold all the
bed sheets to various customers and total sales were shs. 22,500,000.
Note: All figures are exclusive of VAT and VAT rate applicable is 18%.
Determine the total VAT payable through the process.
• Taxable Supply is a supply of goods and/or services other than an exempt
supply, by a taxable person for a consideration. VAT is charged on a taxable
supply at either zero rate or standard rate.
• Taxable Value is the total consideration or price for a particular supply.
This could be in money or in kind. It is the tax base upon which the VAT
rate is applied to compute VAT.
• Consideration is the total amount paid or payable in money or in kind or
both for a supply of goods or services.
• Exempt Supply is a non-taxable supply of goods or services that does not
attract VAT i.e. neither at zero rate nor at standard rate. These supplies are
specifiedd in the Second Schedule of the VAT Act Cap 349.
• Zero-rated Supply is a taxable supply of goods or services that attracts
VAT at 0%. These supplies are specified in the Third Schedule of the VAT
Act Cap 349.
• Exempt Import is an import that is either exempt from customs duty under
the Fifth Schedule of the East African Community Customs Management
Act (EAC-CMA), or would be exempt had they been supplied locally in
Uganda .i.e. as specified under Second schedule of the VAT Act Cap 349.

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 Domestic Taxes

7.7.2 Scope of VAT

VAT is chargeable on both local and imported taxable supplies (goods or
services). It is applied on three categories namely:
• Taxable supply of goods or services made by a taxable person within
Uganda. The person liable to tax is the taxable person making the supply.
• Import of goods other than those classified by the VAT Act as exempt.
The person liable to tax is the person making the importation.
• Imported services. The person liable is the receiver of the imported
service.

7.7.3 VAT Registration

VAT registration is the process of getting eligible persons put or recorded on
the VAT Register. Two key terms are normally applied in VAT registration ie
• VAT Threshold: This refers to the minimum level of taxable turnover
above which a person is required to register for VAT. The current annual
threshold is Shs.150million. However for registration purposes, this is
determined on a quarterly basis currently being Shs. 37.5 million in any
three consecutive calendar months
• Turnover: This is the total value of taxable sales of both goods and
services.

7.7.4 Persons required/eligible to register for VAT

Registration for VAT can be done either compulsorily or voluntarily.

7.7.4.1 Compulsory Registration

There are two categories of persons that are required to compulsorily register
for VAT under the VAT Act. These are:
• Persons who make taxable supplies (turnover) in excess of 37.5 million
in any 3 consecutive calendar months.
• Public bodies that engage in business activities. These include
Government Ministries, departments, parastatals, Town Councils and
District Administrations among others. These bodies should apply for
registration on the date they start dealing in business activities. The
business activities include hall hire, tendering of services, markets, street
parking, toilet management services, street bill board adverts and disposal
of assets, among others.

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7.7.4.2 Voluntary Registration

Persons whose taxable turnover is below the VAT threshold are eligible to regis-
ter if they wish to do so provided they meet the following general requirements
• 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 a proper person in the opinion of the
Commissioner

7.7.5 VAT Registration Processes

7.7.5.1 Application for Registration
Under compulsory basis
• Historical test: A Person who makes taxable supplies that exceed the VAT
threshold is required to register for VAT. The person shall apply to register
within 20 days after a period of three consecutive calendar months if in
that period the person’s taxable supplies exceeded a quarter of the annual
threshold (currently Shs. 37.5 million). For example, if one’s taxable sales
in the months of July to September 2019 exceed Shs. 3 7. 5 million, that
person must apply for registration in the first 20 days of October 2019.
• Future test: Where a person expects to make taxable supplies of more
than a quarter of the annual threshold (Shs.37.5 million) in the next three
months, that person is required to apply for registration at the beginning
of that period of the projected three consecutive calendar months. This
is especially common with contractual jobs where one would be certain
of what to earn and when. For example if at the beginning of October
one projects that he/she will make taxable sales over shs.37,500,000 in
the next three months (from October 2019 to December 2019), then that
person is required to apply for registration on 1st October 2019.
Furthermore, in case the Commissioner General finds reasonable grounds to
believe that the person is required to apply to registration but has failed to
register, he/she shall register such person and registration shall take effect
as he/she deems.
Compulsory registration for Public Bodies
Public Bodies should apply for registration on the date they start engaging
in any business activity.
Application under Voluntary Registration
The date of application is as per the taxpayer’s choice.

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7.7.6 Inspection / Notification

This exercise is conducted to confirm the correctness of the information pro-
vided in the application form by the taxpayer. It is on the basis of the findings
that the decision whether or not to register that person is made and the tax-
payer notified accordingly.

7.7.7 Effective date of registration

In the case of compulsory registration, the effective date of registration is
the first day of the month following the month in which the application was
required to be made. For instance, if due date to apply for registration fell in
the month of April 2019, effective date of registration would be 1st May 2019.
In the case of voluntary registration, the effective date of registration is the
first day of the month following the month in which the application was made.
For instance, if the application was in the month of January, 2015, effective
date of registration would be 1st Feb. 2015.

7.7.8 VAT Registration entitlements

Upon being registered the person will be entitled to 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 prior to effective
date of registration except for the case of manufacturers where the period
was extended to 12 months effective 1st July 2020.

7.7.9 Penalty for late registration

A person who fails to apply for registration by the due date is liable to a
penalty of double the tax due from the date the person ought to have been
registered to when he is registered.

7.7.10 Deregistration
This is the process of removing or cancelling a registered person from the
VAT register.

Conditions for deregistration

• When one ceases to make taxable supplies: This may occur when one
changes the nature of business from taxable to exempt supplies or through
legal re-categorisation of supplies, from taxable to exempt e.g. road
construction works changed from being taxable to exempt effective 1st
July 2004. It can also be through winding up of business.

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Domestic Taxes

• Decline in turnover: This is a two-way test involving:

1. axable turnover excluding VAT in the last 3 months no longer
T
exceeds 25% of the threshold (currently Shs. 37.5 million); and
2. Taxable turnover excluding VAT in the last 12 months no longer
exceeds 75% of the threshold (currently Shs.112.5 million.

The Commissioner General may initiate deregistration under the following

circumstances:
• When the taxpayer has no fixed place of abode or business
premises.
• The taxpayer has no proper accounting/ business records for the
business carried on.
• The taxpayer does not submit regular and reliable tax returns.
The taxpayer is not fit and proper in the opinion of the Commissioner
General.
Note: In the case of a taxpayer registered voluntarily, deregistration can only
be effected after 2 years from the date of registration.

Process of Deregistration
Application for deregistration arises in two ways
• Upon application in writing by the taxpayer.
• On the Commissioner General initiative if (s) he is satisfied that the
taxpayer was not required to apply for registration. This happens
even if the taxpayer does not apply for it.

Effective date of deregistration

Cancellation of registration takes effect at the end of the period (month) in
which the de-registration decision is made e.g. if the decision to deregister
is on 20th March 2019, deregistration will be effective on 31st March 2016.

Obligations at date of Deregistration

Where input tax has been claimed on goods in stock, including capital goods,
the deregistered person is liable to VAT on the market value of such goods
still in stock.

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7.7.11 Place of Supply

For a supply of goods to attract VAT, the supply must be made in Uganda. In
the case of goods, the supply takes place where the goods are delivered or
made available in Uganda by the supplier or where it involves transportation,
the goods are in Uganda when transportation commences in Uganda if the
businesses supplier is in Uganda. In the case of services, the supply takes place
where the services are rendered.

• However the following should be observed:

• The supply of services is physically performed in Uganda.
• The supply of services is in connection with unmovable property.
• The supply of services are radio, television broadcasting services received
at an address in Uganda
• The supply of electronic services in Uganda
• Transfer, assignment or grant of a right to use a copyright, patent,
trademark right in Uganda.
• Telecommunication Services initiated by a person in Uganda but not a
supplier of telecommunication services for a person roaming temporarily
in Uganda.

7.7.12 Time of Supply

This refers to the 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 into consideration. There are different provisions
for the different circumstances as detailed below.

SN Nature of supply Time of supply

Goods/Services for own Date on which goods or use services are
1
use first applied to own use
Goods: Date when ownership passes to the
recipient
2 Supplies by way of gifts
Services: Date when the performance of
services is completed.
The earlier of the following
In case of rental agree-
• Date when payment is due
3 ments or periodic pay-
• Date of receipt of payment for each
ments
successive payment
Date when one received cash to account
4 Supply under cash basis for output or date when one pays cash to
account for input tax credit

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SN Nature of supply Time of supply

The earlier of the following:

5 Ordinary (usual) supply • Invoice date.

• Payment date.
• Delivery date.
For goods where import duty is payable,
time of supply is the date when the duty is
payable.
6 Import of goods.
Where duty is not applicable, time of sup-
ply is the date when goods enter into the
country.

7.7.13 Mixed Supplies

Under the VAT regime, supplies are categorized as either goods or services.
There are times when a supply of a good involves a supply of a service; or
vice versa. This type of supply where one is incidental to the other is referred
to as a mixed supply.

7.7.14 Computation of VAT

Computation of VAT occurs at two levels:
• VAT on a transaction i.e. a sale or a purchase
• VAT payable or claimable by the taxpayer other way put is VAT collectable
or refundable by URA

Key terms in VAT Computations

Tax rate: This is the percentage that is applied to the consideration for a
transaction or taxable value, so as to determine the VAT amount.

For example: if the consideration or taxable value is Shs. 20, 000 and the VAT
rate is 18% (18/100), then VAT = 20,000 x18/100 = Shs. 3,600

Tax Fraction: This refers to the ratio used to determine the amount of VAT
where the consideration is inclusive of VAT. The fraction is given by the formula:
__r_____
r + 100 where r is the VAT rate.

If the rate of tax (r) = 18% then the tax fraction = 18/ (18+100) = 18/118.
For example if the consideration (VAT inclusive) is Shs. 20,000, then VAT =
20,000 × 18/118 = Shs. 3051.

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7.7.15 Apportionment of Input Tax Credit

For a taxable person that deals in both taxable and nontaxable supplies, input
tax credit is apportioned and claim only that part or percentage that relates
to taxable supplies/ sales using the formula:

Input tax credit = A × B/C

Where:
A is the total input tax in the period
B is the total taxable sales in the period.
C is total sales (both taxable + exempt).

7.7.16 Standard Alternative Method (SAM)

Another method of apportionment called SAM is used when disadvantaged

by the above method. It is used when a taxable person obtains an approval
from URA upon application.
Under this method, input tax credit is determined as follows
• Claim all input tax that is directly attributable to taxable supplies.
• Disallow all input tax that is directly attributable to exempt supplies.
• Apportion all input tax that is not directly attributable to either taxable
or exempt supplies using the above formula A × B/C.

7.8.17 Non-Allowable Input Tax Credit

The general rule is that input tax incurred for business purposes should be
allowed or credited to the taxpayer. However, the VAT Act disallows some
input tax credits.
The following input tax credit is not allowed though incurred in respect to
business activities.

• Passenger automobiles. VAT incurred on purchase or importation of

passenger automobiles is not credited to the taxpayer. This includes
purchase of spare parts, repairs and maintenance of Passenger
automobiles.
Exception: Input tax is allowed for purchase of passenger vehicles as stock for
resale in a business activity and carrying on the business of tour operations.

• Entertainment. VAT incurred on entertainment is not allowed.

Entertainment includes food, drinks, tobacco, accommodation, amuse-
ment, recreation, or any other form of hospitality.

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Domestic Taxes

Exception:
1. This can be allowed if the taxpayer is in the business of providing enter-
tainment itself.
2. It can also be allowed if supplies were meals or refreshments to the tax-
payer’s employees in premises operated by the taxpayer or on behalf of
the taxpayer solely for the benefit of the taxpayer’s employees.

• Telephone services. Ten per cent (10%) of input tax on telephone services
is not allowed.

Exception: If at the hotel a client was charged output VAT for using the tele-
phone, the corresponding input tax charged to the hotel owner is allowed.

7.7.18 Tax Invoice

This is a document that is required to be issued by a taxable person upon
making a taxable supply. A tax invoice must include the following:
• 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 individualised 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.
• Either -
1. The total amount of the tax charged, the consideration for the supply
exclusive of tax and the consideration inclusive of tax; or
2. Where the amount of tax charged is calculated under section 24 (2),
the consideration for the supply, a statement that it includes a charge
in respect of the tax and the rate at which the tax was charged.

Illustration
Nyero cotton farmers sold 10 tons of cotton to Brad ginnery at shs.
7,000,000. Brad a cotton ginnery sold 10 tons of lint cotton to Nyanza
textiles at shs.10, 000,000. Nyanza textiles produced bed sheets out of
the cotton and sold them to Kiyembe Ltd (a retailer) at shs 17,500,000.
Kiyembe Ltd sold all the bed sheets to various customers and total sales
were shs. 22,500,000. All figures are exclusive of VAT and VAT rate appli-
cable is 18%. Determine the total VAT payable through the process.

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 Domestic Taxes

Illustration
Stage / dealer Cost Price Selling Price Input Tax Output Tax URA Account
IT OT
(C.P) (S.P) (OT - IT)
(18% * C.P) (18% * S.P)
Nyero farm 7,000,000 - -
Brad ginnery 7,000,000 10,000,000 - 1,800,000 1,800,000
Nyanza textiles 10,000,000 17,500,000 1,800,000 3,150,000 1,350,000
Kiyembe Ltd 17,500,000 22,500,000 3,150,000 4,050,000 900,000
Final Consumer 22,500,000 - 4,050,000 - -
TOTAL VAT TO 4,050,000
URA

Note that Nyero cotton Farmers do not have any VAT to remit to URA
since they sell raw cotton (unprocessed) to the ginnery, however the VAT
component starts at the ginnery when the seeds are being removed from the
cotton (Lint cotton) up to the Kiyembe limited selling to the final consumers.
The total VAT is remitted to URA by the players in the value chain.

8.0 | Income
8.0 Tax Clearance Certificate (TCC)
Income Tax Clearance Certi

A Tax Clearance Certificate – TCC is a document issued by the Commissioner

on request by the taxpayer, certifying that the taxpayer is compliant with
his tax obligations. It is only given to taxpayers who have consistently been
compliant with their tax obligations.

A TCC is normally required by:

• A taxpayer providing passenger transport services; or a freight

transport service where the goods vehicle used has a load
capacity of more than 2 tons.
All tax payers in this category must have paid their advance Income tax in
accordance with the laws in order to obtain a tax clearance such that they
can renew their Operator’s licences. Advance Income tax is paid using the
schedule: i.e. A tax of Ugx. 50,000 per ton for goods vehicles with a loading
capacity of more than 2 tons and a tax of Ugx 20,000 per passenger per
year for passenger service vehicles (PSVs) or Public Omnibuses (PMOs). This
tax when paid shall be the final tax for this category in that year of income.
• A taxpayer supplying goods or services to the Government.
• A tax payer providing warehousing or clearing and forwarding services.
• Any person transferring funds abroad above shs 50 million.

Note that any person who requires a tax clearance certificate shall apply to
the Commissioner for the certificate as proof of tax compliance.

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9.0 | Tax Stamps

9.0 Tax stamps
A person dealing in goods, whether locally manufactured or imported is
required to attach a tax stamp on goods manufactured or imported. The
Minister prescribes, by statutory instrument, the locally manufactured or
imported goods on which tax stamps shall be affixed.
The commissioner of URA recommends the manner in which a tax stamp is
to be affixed to goods.
Penal tax relating to tax stamps
• A taxpayer who fails to affix a tax stamp on goods prescribed above
is liable to pay a penal tax equivalent to double the tax due on goods
or fifty million shillings, whichever is higher.
• A person who prints over or defaces a tax stamp affixed on goods
prescribed above is liable to pay a penal tax equivalent to double
the tax due on the goods or twenty million shillings, whichever is
higher.
• A person found in possession of goods prescribed above on which a
tax stamp is not affixed, is liable to pay a penal tax equivalent to
double the tax due on the goods or fifty million shillings, whichever
is higher.
• A person who attempts to acquire or who acquires or sells a tax
stamp without the authority of the Commissioner commits an of
fence and on conviction, is liable on conviction to a penalty equivalent
to double the tax due on the goods or ten million shillings, whichever
is higher.
•
10.0 | Non-Tax Revenue (NTR)

This refers to duties, fees, and levies that are charged by Government for the
provision of specific services and penalties for specified offences. Non-Tax
Revenues (NTR) are imposed by specific Acts of Parliament and administered
by government Ministries, Departments and Agencies (MDAs).
The NTR directly administered by URA includes stamp duty and motor vehicle
transaction fees these include: registration fees, change of ownership fees,
duplicate fees, alteration fees, re-registration fees, OTV fees, cancellation
and endorsement fees, search and certification.

However, URA collects Other Non-Tax revenue (ONTR) on behalf of gov-

ernment ministries, departments and agencies (MDAs). The most common
examples include:
• Passport fees

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 Domestic Taxes

• Work permit fees

• Court fees and fines
• Traffic Express penalties
• Land transfer fees
• Royalties
• Business and Company registration fees
• Tender fees
• Permit fees
Any person can register a payment for non-tax revenue on the URA website
if he is aware of the Ministry, department and Agency to which the payment
relates and the corresponding Payment fees category.

10.1 Stamp Duty

This is a duty charged on any instrument listed in schedule 2 of the Stamp

Duty Act, 2014 as amended which is executed in or outside Uganda relating
to a property or transaction made in Uganda.

An instrument is a document that confers any right or liability upon being

created, transferred, limited, extended, extinguished or recorded.

Note that stamp duty only applies to instruments listed in schedule 2 of the
Stamp Duty Act, 2014 as amended. The rates of stamp duty payable are either
fixed or ad valorem depending on the instrument.

A fixed duty rate does not vary with the value of the document while an Ad
valorem rate varies with the amount or value or the consideration paid, or
obligation incurred, or the value of the property affected by the document in
question.

Transactions involving instruments listed in schedule 2 of the Stamp Duty

Act, 2014 are not legally binding if stamp duty is not paid where applicable.
The stakeholders who assist URA in drawing, executing and implementing the
various instruments for stamp duty include the following;
• Banks / Financial Institutions
• Insurance Companies
• Registrar General’s office
• Registrar of Titles
• Commissioners of Oaths
• Administrator General
• Hire Purchase Companies
• Bonded Ware Houses e.t.c

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Domestic Taxes

10.2 Motor Vehicle Related fees

This consists of fees charged on various motor vehicle transactions that are
collectable under the Traffic and Road Safety Act Cap 361. Some of the ser-
vices offered in relation to the fees paid include;
• Motor vehicle registration
• Change of Ownership of a Motor Vehicle
• Duplicate Number plate and Registration Book
• Owners Transport Vehicle (OTV)
• Dealers /Garage plate ownership
• Alterations of particulars
• De-registration of motor vehicles
• Endorsements of third-party Interests and cancelation
• Search and Certification.

Note that the fees applicable are attached in the appendix in this handbook.

10.3 Driver’s Permit fees

A driving permit is a legal document that permits one to drive a motor vehicle
on the Road. It is issued to an applicant who is 18 years and above and for
specific classes of vehicles. The mandate of processing driving permits was
solely handed over to Ministry of Works. URA‘s mandate is to collect the due
fees that may be applicable.

Categories of Permit fees include:

• Learner/provisional permit fees

• Full driving permit fees
• Foreign Exchange permits fees.
• Renewal of driving permit fees
• Extension of driving permit class fees
• Test fees
• Duplicate Driving Permit fees
Note:
• Application for driving permit renewal should be made within 5 years
from the date of issue or 2 years from the expiry date; or else the
validity of the permit lapses and a new permit must be applied for.
• International Driving Permits are inadmissible for exchange. Only Na-
tional driving permits issued by the respective countries’ national traffic
authorities are accepted.
• The fees applicable are attached in the appendix in this handbook

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PART C
CUSTOMS

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 Customs

1.0 | Introduction
Customs Department is one of the 7 Departments that form the Uganda Rev-
enue Authority (URA) with a core mandate to facilitate international trade.

Its core functions are;

• Collect Revenue Collection for national development.

• Monitor the movement of goods into, out, and through the country
• Protect Society against harmful imports.
• Protection of domestic industries against unfair competition.
• Collection and dissemination of International trade Statistics

Figure 1: Map of Uganda Showing Customs Stations

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 Customs

2.0 | Clearing
2.0 Imports
Clearing Imports
Importation of Goods
For Customs Purposes, the clearance of goods is regulated under the East
African Community Customs Management Act, 2004 (As Amended), Uganda
being a member of the E.A Customs Union
Importation of goods means to bring or cause to be brought into the Partner
States (East African Community) from a foreign Country.
Please note that the movement of goods from one partner state directly or
indirectly to another partner state with exception of goods in transit, goods
for transshipment or goods for warehousing in a bonded warehouse, is called
transfer not importation.

Goods may be brought into the country upon making a customs entry or
declaration either for;
a) Home consumption
b) Warehousing
c) Transshipment
d) Transit
e) Export processing zones/Free zones

• Goods for home use are those that are imported solely for the purpose
of sale or use within Uganda.
• Transit goods are those that are intended to be consumed in another
country (other than the Partner States) so they just go through the
Partner States before they reach their final destination.
Goods up to the value of United states dollars Five Hundred ($500) imported
by a person/traveler who has been outside Uganda for a period in excess of
twenty-four (24) hours shall be allowed a baggage allowance (tax exemption)
provided the said goods are in the travelers accompanied baggage and are
declared to customs.
All goods imported/brought into Uganda must be declared to customs using
the services of a licensed clearing agent for that respective year. Note how-
ever that, the following goods may be brought into Uganda and be released
without necessarily making an entry/declaration;
a) Mail bags and postal articles;

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 Customs

b) Goods which are bonafide personal baggage of the passenger;

c) Human remains;
d) Diplomatic bags;
e) Subject to an undertaking being given by an owner to customs to
furnish the necessary entry/declaration within 48hrs of the time of delivery,
the loading and delivery to the owner of any bullion, currency notes, coin, or
perishable goods may be permitted without any entry/declaration
Note. Any person who does not comply with the requirements as provided
under e above commits an offence and shall be liable to a fine.

3.0 | Customs Clearing Agents

3.1 Definition
A Customs agent is a person who has been appointed by the Commissioner of
Customs to transact business relating to Customs on behalf of other people.
3.2 Dealing with clearing agents and not importers
Because, it is a requirement by law under sections 146 and 147 of the East Af-
rican Community Customs Management Act (EACCMA). Clearing agents are
mandated to provide professional services of tax declaration to importers and
exporters.
The Uganda Revenue Authority [URA] deals with licensed clearing firms repre-
sented by agents. However, even though you must have a clearing agent assist
in this function; do not be ignorant of your tax affairs.
The URA web portal is a useful resource with free tax material. When you log
on, look out for the section ‘Information library’ and select the appropriate tax
information required. You can also find updated circulars and notifications and
the exchange rates for tax purposes.
3.3 Expectations of a clearing agent
There are many expectations, including:
• Acquire an authorization letter from the owner of goods.
• Obtain import/export documents (e.g. original import documents – bill
of lading, invoice or parking list or any other documents that relate
to the importation or exportation of goods).
• Go to the bonded warehouse or the border stations where the goods
are and process transit or import documents for final clearance.
• Provide, whenever required by customs administration, an authorization

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Customs

form from the firms or persons by whom he is employed to act as their

customs agent;
• Represent a client in any matter related to customs;
• Advise a client against non-compliance to customs laws.
• Exercise due diligence to ascertain the correctness of any information
which he imparts to a client with reference to any customs operations.
• Not withhold information relating to customs operations from a client
who is entitled to such information.
• Together with the importer, promptly pay government any duties,
taxes or other debts and promptly account to his clients for any money
received for them from government.
Please note carefully, that importers should never hand over the payment
obligation for taxes exclusively to the clearing agents. Payments should either
be made by cheque to URA or cash deposits to the bank.
Clearing agents are also expected to:
• Not attempt to influence the conduct of any officer of customs in any
matter pending before customs by the use of threat, false accusation,
duress or the offer of any special inducement or promise of advantage,
or of any gift.
• Not procure or attempt to procure, directly or indirectly, information
from customs records or other government sources of any kind to
which access is not granted.
• Inform the customs administration of any change of address before
such a change is effected.

3.4 Importance of a clearing agent

An agent, authorized by the owner to act on their behalf in writing, will be
responsible for preparing and presenting the declarations to Customs. The
agent may also sign any other documents on behalf of his client on request
if authorized by the Customs Act. The agent will ensure that all taxes due are
paid as required on the consignments he/she handles on behalf of the owner.
3.5 Finding a genuine clearing agent
Clearing agents are licensed for each calendar year and licence expires on the
31st day of December each calendar year. Please look out for the licence for
that respective year.

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 Customs

Additionally, the importer should check out the licensed agents list on the URA
web portal to ascertain authenticity of any agent seeking business.
The importer or client should insist on identification and also visit the office of
the firm where the agent works or visit any URA Customs office and inquire
before appointing the agent.
3.6 Licensing customs clearing agents
Customs agents must be licensed by the Commissioner before they can be
involved in the clearance of goods through Customs. An application on Form
C20 must be made and presented to the Commissioner for consideration. An
application fee of US$ 50 and an annual license fee of US$ 400.00 is payable
for the license.
The Commissioner can only license people/companies who are registered,
knowledgeable about Customs clearance and have an office with equipment
like computers. Licenses will not be issued or renewed if the licensee or applicant
has a criminal record, is involved in dishonest activities or any other wrong doing.
The validity period of a Customs Agent license is 1 calendar year. Licenses
obtained in the course of the year all expire on the 31st December of every year.
Renewal of license is not automatic. It is subject to the Commissioners approval
based on considerations like: all queries have been answered and no major
offenses have been committed.
3.7 Agent involvement in illicit activities
If the agent is involved in illicit activities, the owner of goods being cleared
through Customs is responsible for what the authorized agent does during the
period he/she is acting on his/her behalf. Both the owner and the agent will be
prosecuted for any unlawful acts done by the agent acting on his/her behalf.
3.8 Obligations of the client to the agent
The client must provide the agent the relevant documents in unaltered state
and equip the agent with a true and correct position to avoid misrepresentation.
3.9 Requirements and conditions for Licensing of Customs Agents
a) Submission of duly completed application form (C.20) after payment
of application fee of US$ 50 (Fifty dollars);
b) Must have an office with sufficient equipment with the following
ASYCUDA World System End User Specifications;
c) The physical location/address must be indicated in the application
form or verification;
d) Certificate of Incorporation, company Form 7 or Form 20,
Memorandum and articles of association should be attached on
the application.

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Customs

Category Specification Requirement

PC Minimum Require- 2 GB RAM Evidence of ownership

ment 2 GHZ Dual Core of computers and
250+ GB Free Disk associated equipment
Space such as scanners
Adobe PDF reader will be required.
installed
Java 6 or higher
Presence of an Anti-vi-
rus software

Network Minimum 128 Kbps network speed Contract with internet

requirement Dedicated and non-in- service provider
termittent should be attached

e) The applicant must be tax compliant in all tax heads, i.e.

corporation tax, VAT and income tax for the company itself, the
directors, shareholders and employees; a tax clearance certificate
is required;
f) The applicant must provide a sample of the original company/firm
headed letter and stamp impression;
g) Shareholders, Directors and employees must not have an interest
in more than one clearing company/firm;
h) Particulars of the bank account/s must be indicated on the
application form;
i) Recent passport sized photographs of directors and staff duly
certified by a Notary Public or a Commissioner for Oaths should
be attached;
j) A minimum of two employees in charge of clearing of goods in
Customs should be in possession of a diploma or
certificate in customsclearing & forwarding from a recognized
institute/EACFFPC for purposes of transacting business;
Evidence of their employment contract and compliance with all s
tatutory obligations is required
k) Proof of affiliation or membership of a RECOGNIZED clearing & for
warding association;
l) A valid tenancy agreement with stamp duty duly paid, for suitable
office accommodation valid up to 31st December 2018 or proof of
ownership of office accommodation;
m) Payment of license fee of US $400 (four hundred dollars) on
approval of application;

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 Customs

n) There will be no handling of transit (inward, outward and transit

through) unless after presentation of a bank guarantee and
demonstration of the companies’ financial capability to handle
such consignments at entry/exit points;
o) Practical and written competence assessments will be conducted
for the declaration staff of the company on Customs matters;
Passwords will be issued to those who successfully pass the
assessments. Companies whose declarants fail the Competence
assessments will not be licensed.
p) All licensed companies shall be subjected to performance
measurement (KPIs) to assess efficiency in service delivery
and compliance to Customs laws on a monthly basis. Annual
performance rewards shall be granted to the best performing firms
and those who fall below minimum expectations will be relegated.
q) Any Company involved in any fraudulent Act against Customs Laws
and Procedures shall have its license suspended and or revoked.
r) The Company performance score (KPIs) will form part of eligibility for
licensing.
s) The companies shall have no outstanding transactions dating as far
back as 30th June 2017.
3.10 Online appointment of agents
Creating account and logging in to access the portal
i. Enter URA link https://www.ura.go.ug in the Address bar to access the
sURA Portal.
ii. The user shall click the Login option (See figure 1) to open the login
options.

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Customs

iii. The user enters the TIN in the space labelled Login Id and password
(See figure)

iv. The steps above will be possible if the user already has an account on
the Portal otherwise, the trader creates an account if they do not have one.
v. The user then enters the information required in the spaces available
(See Figure 3 under Create Account)

After creating the user account, the user follows the steps earlier discussed
above to login.
N.B All users must have a recognized TIN that is used as an ID when logging in.

3.11 How a clearing firm registers to handle imports/exports

By now, the agent and all the clients have a registered account on the URA
Portal were each uses the individual TIN to log in.

Below are the steps that an agent firm shall follow in order to register and be
able to clear goods, be appointed and accept appointments from clients.

i. The firm shall login as in the steps earlier and will open the page as in
screen shot

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 Customs

ii. Under e-Services, the firm will access E-Registration and by

moving the curser against E-Registration, will click Registration
under Tax Agent Registration (See Figure 4 above).
iii. With the correct TIN and password entered at logging in, and after
step 2 above, the system populates all the information for the firm
and below the firm’s information, lists the Tax Type Details.
iv. Under the Tax Type Details, the firm selects/Checks the tax type,
Imports and Exports (See Figure 5)
v. The box for entering the License number (Agents license number)
will be activated.
vi. The agent firm enters the license number in the format it is on the
agent license
vii. The license period will be automatically populated when the
correct license number is entered.
viii. If the agent firm is not registered, an error message, ‘‘you cannot
register as Customs Agent as you are not registered for Import and
Export Tax Type.’’
ix. When the license number supplied is correct, the user clicks ‘Submit’
to complete the registration process.

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Customs

NB. The agency firm is available for appointment ONLY after registering on
the portal and therefore will not be available for appointment

3.12 Appointment of the agent employee by the agency firm

i. The agency firm logs into their account created as in Part B above
ii. Under the e-Services under the Firms portal login, the authorized
agent representative clicks the option, Appoint Employees as in
figure below.
iii. The dialog box were the employer enters the employees TIN,
appointment date, ID number etc. opens up.
iv. The employer will enter the TIN of the employee, the date of
appointment and all the relevance employee information
v. Clicks ‘Submit’ when all the employees’ particulars have been
properly entered.

After submission, the employee’s details will be sent to ASYCUDA World

automatically. Thereafter, the user login credentials will be created in ASY-
CUDA World and sent to the specific employee appointed using the email
supplied in eTax at the time of applying for the TIN. Users will be accessing
using their TIN as the login Id.
Should the employer wish to stop their employees from accessing ASYCUDA
World, then they can de-activate the employee.

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 Customs

3.13 Appointing a clearing firm by the trader

i. The user creates an account if they do not have one as indicated in
Part A above
ii. After creating the individual account on the portal, clicks ‘Customs
Clearing Agent’ under e-Services.
iii. The trader gets options under Customs Clearing Agent including;
• Appoint Agent
• Deactivate Agent
• View Appointed Customs Agents

iv. To appoint an Agent, Consignee/Traders selects Appoint Agent

v. A dialog box will open for the trader to enter the TIN and date of
appointment of the firm being appointed
vi. The TIN of the client appointing will be auto populated and the trader
enters the TIN of the clearing Firm to appoint the agent firm in the
next.

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Customs

vii. The trader will then select the first date of appointment from the
calendar on the right of the ‘Appointment from Date’ box by clicking
on the calendar icon.
viii. Enters the closing date of the appointment in the next box
(Appointment to Date)

ix. Clicks Submit’ if everything is correct.

x. The agent will receive an email and an SMS notifying them of this
appointment.
xi. The agent will then accept or reject the appointment
xii. The appointing firm will get a notification by mail and or SMS
when the appointment is accepted or rejected.
xiii. Once the agent accepts the appointment and the message of
acceptance is received by the appointing trader, the process would
have been concluded.
N.B. Like it is for employees, the trader can also de-activate the firm they do
not wish to continue with.
A trader can appoint only three agent firms at a go and these shall be the
only ones authorized to handle imports or exports for the trader that ap-
pointed them.
For additional support, please contact the support team at http://help.ura.
go.ug or write to services@ura.go.ug Users can also compose a mail to access
URA support while logged into their portal accounts to access our support.

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4.0 | Declaration of Goods

When goods are brought into a customs area e.g. a border entry point,
customs must be informed of the person responsible to fulfill the customs
obligations with regard to the goods on board. This can be the owner of the
goods or a third party, including customs brokers, agents and transporters
referred to as declarants.
The importer or his authorized agent (declarant) enters the goods on a
Customs Single Bill of Entry or the Single Administrative Document (SAD).
The declarant must furnish a formal report to Customs within 24 hours and
make the necessary declaration in respect of the imported goods to the
Customs Officer.
The EAC-CMA prohibits the removal of any goods from a Customs area before
they have been dully reported and entered. Goods may be entered for;
a) Direct home use, where goods are entered and paid ready for home
consumption.
b) Transit, where goods are entered to be moved from one customs
area to another and across the border into another country.
c) Temporary importation, i.e. where goods are imported temporarily
for a specific period of time and intended to be returned after use
d) Warehousing, i.e. where an importer is not ready to clear the
goods immediately, the goods must be kept in a customs bonded
warehouse until such a time when they can be released.

5.0 | Assessment of Duties

Determination of tax payable is made in consideration of the Customs value,
tax rates based on the customs tariff nomenclature (EAC- CET) and the Origin
of the goods or other instruments of the law, which are provided for in the
relevant schedules of the EAC- CMA (2004)
In Uganda duties and taxes are payable through self- assessment procedures
where taxpayers through their appointed clearing agents make declarations
in the ASYCUDA World system and proceed to make payments in designated
banks.
This declaration system provides a quicker and more efficient service with
less paperwork. It also provides an effective means of identifying and pre-
venting fraud.

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Customs

5.1 Selectivity of Declarations

Upon payment of taxes assessed, goods are subjected to random selectivity
based on risk assessment criteria leading to either physical examination or
documentary check or direct release of the goods. There are four, Yellow,
and selectivity lanes that is Blue, Green Red.
Declarations whose risk category is low (Those in the Green lane) are im-
me-diately released while those selected red are automatically assigned to
the verification section for physical examination.
The declarations selected yellow are considered medium risky and are for
documentary check therefore are submitted to the document examination
section and also automatically assigned to the documentary check officer.
The blue lane transactions are considered low risky and clients compliant and
these shall be submitted to the Post Clearance Audit unit for auditing (Most
categories of blue lane goods are raw materials with low risk.

5.2 Physical Examination

This refers to the verification /physical counting, weighting of goods to as-
certain their quantity, quality and description as per the declaration. In case
of discrepancy, the goods will be subjected to offence procedures.
5.3 Document Check
Document check means the systematic analysis of all supporting documents
by customs for purposes of proper valuation of imported goods. It can also
refer to examination of documents for completeness, authenticity, accu-
racy and correctness of the information declared in relation to the Single
Administrative Document (SAD)

Customs documents can be broadly categorised as follows;

• Commercial Documents
• Transport Documents
• Financial Documents
• Regulatory DocumentS

Type of Document Details

• Purchase order,
• Proforma invoice
• Sales Contract
Commercial
• Commercial invoice,
• Receipt,
• Packing list

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 Customs

Type of Document Details

• Shipping Bill / Export Document
• Bill of Lading / Airway Bill
• Freight Invoice
Transport
• Freight debit note
• Insurance certificate
• Insurance Debit Note
• Certificate of origin
• Permit/certificate of analysis
Regulatory • Fumigation Certificate
• Phytosanitary Certificate
• Transit documents
• Form E
• Telegraphic transfer
The Financial • Letters of credit
• Bank draft / Bill of exchange
• Credit agreement

In summary for any imported goods, the following documents are required for
making a declaration to customs:
i. Bill of lading/airway bill;
ii. Insurance certificate;
iii. Pro-forma invoices;
iv. Commercial invoices;
v. Certificates of origin;
vi. Permits for restricted goods;
vii. Purchase order;
viii. Packing list;
ix. Sales contract;
x. Evidence of payment;
xi. Any other supporting documents.

5.4 Direct Release

Declarations that are deemed to fully comply with the customs laws and procedure
are released without being subjected to some customs controls based on the
value of goods and imports however can be subjected to post clearance Audit.

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 Customs

6.0 |6.0
Customs valuation
Customs valuationof
of imported goods
imported goods
6.1 Customs Valuation
Customs Valuation is the determination of the Customs value for taxation
purposes.
6.2 Customs value
Customs value means the value of imported goods for the purposes of levying
ad valorem Customs duties and taxes.
• For Goods imported using road rail and marine transport modes,
Customs value is a composed of the Price for the goods, cost of
insurance and freight.
• While for goods imported using air transport, the Customs value is
composed of the price for the goods and the cost of insurance.
Freight is not included for goods transported by air.
The customs value is used as the basis for calculating customs duties.
6.3 Ad valorem duties
Ad valorem duties of Customs are duties levied based on the value of the
goods and are usually expressed as a percentage of the value. Such duties
are distinct from specific values that are based on specific measures for the
goods such as numbers, weight, volume, area, capacity etc.
There can also be composite duties that are partly ad valorem and partly
specific such as garments 3.5 per Kg or 35% whichever is higher. Customs
tariff of Uganda levied on different kinds of goods are published in the Uganda
Gazette every financial year.
6.4 Valuation of goods
There are six international methods for the valuation of imported goods
stipulated in the World Trade Organization Agreement on Customs Val-
uation. They are applied in sequential order.
The primary method of valuation is the transaction value, which is the
price actually paid or payable for the goods when sold for export to the
country of importation. A number of conditions must be met to use the
transaction valuation method and it can involve deductions or additions
such as commissions or royalties.
When the transaction value cannot be used, one of the alternative meth-
ods will be used to determine the customs value (methods of valuation)
in sequential order

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 Customs
• Identical goods value method-Transaction value of Identical goods
previously cleared through Customs. Identical goods mean goods
that are same in all aspect except minor difference such as color, size.
Must be of the same brand and country of export.
• Similar goods value method-Transaction value of similar goods
previously cleared through Customs. Similar goods are goods that
have like characteristics and are commercially interchangeable; if a
customer doesn’t find the exact product he/she wanted can choose
an alternative e.g. Colgate and Close up. For goods to be regarded
as similar, the brand must be of the same reputation e.g. LG and
Samsung; and from the same country of export.
• Deductive value method –The basis for the Customs value is the price
at which the greatest aggregate quantity of the imported goods is
sold in Uganda. Post importation costs and taxes are deducted to
arrive at the Customs value.
The deductible costs include:
Taxes such as VAT, Import Duty, Excise Duty
Profits and general expenses e.g. rent, labour etc; associated to the
distribution and sale of the goods. As a Mark Up.
Post importation Costs associated with the logistics and transportation
of the goods to the bonded warehouse.
• Computed value method –this is based on the direct cost of producing
the goods like raw materials, consumables, general expenses, other
costs and profits relating to the production and sale of the imported
goods. This method requires to get information for the country of
production.
• Fall-back value –where no other methods re suitable, the customs
value can be derived based on one of the five methods reasonably
adjusted. The method is not used on its own but relies on the
sequential flexible interpretation of the 1st to the 5th method until
the value of the goods is determined.
Customs will determine the value by considering the above valuation
methods and any other relevant information.

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Customs

6.5 Composition of Customs value

The customs value will include the following;
• Cost of the goods free on board a transport vessel in the country of
export.
• Freight charges up to the place of importation if the goods are
transported by road, Rail or Sea.
• Loading, unloading, and handling charges associated with transport
of goods to the place of importation; and
• The cost of insurance.
6.6 Pre-shipment inspection
Charges for pre-shipment inspection are normally incurred by the importer
or by government of the importing country. Such inspection may have been
undertaken as per importing country’s policy or as the requirement per do-
nor agency financing such import or as importers own requirement. If such
charges are paid for the importers benefit, then they should be added to
the customs value.
6.7 Charges included in customs value
East African Community Customs Management Act (EACMA) requires that
amounts for certain charges and the value of certain goods and services, if
not already included in the price paid or payable for the imported goods,
must be added to the price paid or payable. These charges and v\values are
can include amounts for the following:
• Commissions and brokerage
• Cost of containers
• Packing costs
• Assists (goods or services provided by the buyer to the seller free
of charge or at reduced price to be used in the production of the
imported goods)
• Royalties and license fees
• Subsequent proceeds (a financial advantage to the vendor
resulting from resale, disposal or use of imported goods by the
purchaser)
• Transportation costs and insurance costs to the place of direct
shipment to the partner state.

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 Customs

6.8 Packing costs

The cost of packing overseas, such as labor and packages, is included in
customs value of the goods. The cost of containers and pallets imported
temporarily are not included in the customs value.

6.9 Currency for customs value

The customs value is in the currency as agreed in the commercial invoice.
However, for purposes of paying taxes and the invoices are in the foreign
currency, the Customs value is converted to Uganda Shillings using the rate
of exchange duly published monthly by Uganda Revenue Authority basing
the information from Bank of Uganda.
6.10 Calculation of import taxes
Step I
First determine Customs Value of the item. This is the sum of Cost, Insurance
and Freight up to Mombasa port.
Step II
Change the currency to Ugandan shillings by multiplying the customs value
by the prevailing exchange rate
Step III
Determine the necessary taxes
Illustration
If you imported a car worth 2,000 dollars, paid 200 dollars for insurance
and 300 dollars as freight charges up to Mombasa and the exchange rate is
1 dollar = 3,600 shilling;
Step I
Customs Value = Cost + Insurance + Freight
= Cost + Insurance + Freight
= 2000 + 200 + 300
= 2500

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Customs

Step II
Customs Value = Customs value X Exchange rate
= 2500 X 3600
= 9,000,000

Step III
Determine the taxes.
Import duty = 25%, VAT = 18%, Withholding Tax = 6%

Import Duty

25% of 6,250,000
= 25/100 X 9,000,000
= 25/100 X 9,000,000
= 2,250,000

VAT
18% of (Customs Value + Import Duty)
= 18% X (9,000,000 + Import Duty)
= 18% X (9,000,000 + 2,250,000)
= 18/100 X 11,250,000
= 2,025,000

WHT
6% of Customs Value
= 6% X 9,000,000
= 6/100 X 9,000,000
= 540,000
INFRASTRACTURAL LEVY = 1.5% of Customs Value
= 1.5% of customs value
= 1.5%X9,000,000
= 135,000

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 Customs

ENVIRONMENTAL LEVY
=50% X 9,000,000
=50/100 X 9,000,000
=4,500,000
TOTAL TAXES = Import duty + VAT + WHT + Infrastructural Levy + Environ-
mental Levy
= 2,250,000 + 2,025,000 + 540,000 + 135,000 +4,500,000 = 9,450,000

NB: Please note that there is a value guideline for used cars. This means
that customs value for a used car has already been determined. The value
guideline is the basis valuing used motor vehicles and not the invoice price as
guided by the EAC Ruling on the Valuation of used goods of 13th December,
2013. The motor vehicle value guideline is available on the URA web portal;
http://ura. go.ug
6.11 Transactions not considered a sale for export
The importer must determine if his goods were imported into the country
as a result of a sale. A sale requires a transfer of ownership of goods for a
monetary amount (a price).
Examples of situations that would not be considered a sale for export to
Uganda are:
• Goods imported by intermediaries
• Free of charge shipments
• Goods supplied on loan
• Goods imported for destruction
• Goods imported by branches
• Good subject to Barter trade
• Goods imported on consignment
• Leased Goods

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Customs

6.12 Valuation of replacement goods

The replacement goods may be invoiced free of charge or invoiced at the
original price with an arrangement for giving credit for the original goods.
in either case the replacement goods are to be valued at the original price.

6.13 Treatment of rented or leased goods

Hire or leasing transactions do not constitute sales, even if the contract allows
an option to purchase the goods. Therefore, in such cases the transaction val-
ue method cannot be applied and recourse has to be taken to other methods
of valuation. There are case studies provided by WCO for goods on lease but
these have very specific application depending on the circumstances. Please
Contact URA for guidance on the valuation of goods on lease.
6.14 Record keeping
Yes, since post importation audit may take time the importer has to keep
records relating to his import transactions for at least five years. (Section
235 of EAC-CMA).

6.15 Appeal against determination of the value by customs authorities

Yes, the importer has a right to appeal without penalty. The appeal may be
at departmental level or to an independent tribunal also known as tax appeal
tribunal (TAT)
At times, the final determination of customs value may be time consuming.
6.16 Withdrawal of goods from Customs control
The importer is allowed to withdraw his goods from customs control pending
determination of customs value by providing sufficient guarantee in the form
of surety, a deposit or any other instrument as required, covering the final
payment of customs duties on the goods.

6.17 Legislation governing valuation

Full details relating to the valuation requirements are in the East African
Customs Management Act 2004. Our valuation system is based on the world
trade organization (WTO) valuation agreement-the system used by major
trading nations throughout the world.

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 Customs

6.18 Obligation to declare

Declaring a value – Invoices

a) Section 34 of the East African Customs Community Management
Act (EAC-CMA), 2004, requires the importer to:
• Make due entry on a Customs declaration;
• Provide such information as required (some of which are
mentioned in 1.6 above); and
• Answer all questions relating to the imported goods.
b) This would include sufficient information to enable the Customs
officer to determine the actual value of the imported goods.
c) Before a Clearing Agent declares a value, based on a transaction
to which he/she is not the importer, the importer must be sure that
such a transaction satisfies the criteria discussed above and be
prepared to submit further supporting evidence as described,
upon request by Customs officers.
d) Any importer or agent who declares a value to Customs without
necessary supporting documentation would not be exercising
reasonable care and may be subject to a penalty or other
enforcement compliance measures as prescribed in the EAC-CMA,
2004.
e) An entry shall not be valid unless the true value of the goods on
which duty is leviable, or which is required to be declared under
the provisions of the EAC-CMA have been declared. This include
all particulars of the transaction value or of any:
i. Commissions;
ii. Discounts;
iii. Cost of containers;
iv. Cost of packing (material and labor);
v. Assists;
vi. Royalties;
vii. Subsequent proceeds;
viii. Freight;
ix. Loading, unloading and handling charges;
x. Insurance).
Other information, which relates to and has bearing on the value should be
declared by the exporter on his/ her Commercial Invoice and such particulars
shall relate to the final amount pertaining to that transaction.

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 Customs

f) The Commercial invoice presented for Customs clearance must be

an exact representation of the transaction value. Full details and particulars
of all factors relating to the sale which have direct or indirect influence on
the transaction value must be reflected on the invoice.

7.07.0
| Payment of Custom taxes
Payment of customs taxes
After a declaration is made by the clearing agent, an assessment is raised
and given to the client to pay the taxes due.
7.1 Payment in Installments
Stepwise Instructions for the management of Memorandum of understanding
MOUs for installment payments
a. The process starts with the receipt of a taxpayer’s requests by either
Commissioner Customs Department or Commissioner General to enter an
MOU with Uganda Revenue Authority to pay taxes in installments.
b. On approval of the request, Commissioner Customs Department or
Commissioner General shall forward it to Assistant Commissioner Compliance
& Business Analysis (AC CBA) for implementation.
f c. On receipt of the request by AC-CBA, it shall be recorded and for-
warded to Manager Compliance for processing. Supervisor arrears unit will in
turn assign an officer, who will send the request to supervisor CBC to confirm
taxes payable by preparing a work sheet (for those goods that are still with
Customs) that is sent back to CBA.
d. On receipt of the feedback from Supervisor document Processing
Center, officer arrears shall prepare a payment schedule. The officer will draft
a letter for Manager Compliance’ signature in response to the taxpayer’s re-
quest stating detailed terms and conditions for the payment in installments.
e. When the tax payer accepts the terms and conditions, she/he shall
be referred to Debt collection Unit (DCU) for execution of an MOU. Once
she/he has entered an MOU, the officer arrears shall send a copy to supervi-
sor systems and procedures for an m-account to be created upon which the
principal tax shall be entered.
f. An entry shall be captured by the clearing agent of the tax payer and
the goods released as directed by the authorizing officer (CCD /CG).

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g. Debt Collection Unit shall liaise with taxpayer to ensure that

collections are as per schedule
h. In case of a top-up, AC- CBA shall advise supervisor DPC to amend
the entry in question so as to allow payments to be effected by the taxpayer.
i. CBA advises taxpayer to lodge entry. M-account details communi-
cated to taxpayer
j. Once the payments have been completed, officer arrears shall pay
entries into the Customs Management Information System and inform the
revenue center and supervisor DPC
k. After all payments have been received, officer arrears shall advise
supervisor Systems and Procedures to suspend the M-account.

8.0 | Objection and appeals

8.1 Appeals to the Commissioner
A person affected directly by the decision or omission of the Com-
missioner or any officer on matters relating to Customs shall within 30days
of the date of decision or omission lodge an application for review of that
decision or omission
The Commissioner may extend the period of objection where there is good
cause.
The Commissioner shall respond to an objection within 30 days of receiving
it or else be deemed to have made a decision allowing the application.
8.2 Steps taken
a) When a client disagrees with a decision taken by an officer, he or she
shall make a written objection to the officer handling the declaration. The
officer shall study the merits of the case so as to take a decision. Where the
Officer finds the issues raised by the client credible, the officer shall proceed
to settle the case and the case is closed.
b) Where the Officer finds issues raised by the client as insufficient, the
officer shall uphold the decision by communicating in writing to the client. The
client shall be advised in the same communication to appeal to the station
head. Should the client choose to appeal, the station head shall receive the
appeal and study the merits of the case.
c) Where the station head finds the issues raised by the client credible,
the officer shall be advised in writing to settle the case. The client will be
notified in writing of this decision. Where the Station head finds issues raised
by the client as insufficient, the decision shall be upheld. A written response
shall be given to the client detailing reasons why it was upheld. The client
shall also be advised to appeal.
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d) Should the client choose to appeal, the Manager shall receive the
appeal and study the merits of the case. Where the Manager finds the issues
raised by the client credible, the officer shall be advised in writing to settle
the case. The client will be notified in writing of this decision.
e) Where the Manager finds issues raised by the client as insufficient,
the decision shall be upheld. A written response shall be given to the client
detailing reasons why it was upheld. The client shall also be advised to appeal.
f) Should the client choose to appeal, the Division Head (Assistant
Commissioner) shall receive the appeal and study the merits of the case.
Where the Divisional Head finds the issues raised by the client credible, the
officer shall be advised in writing to settle the case. The client will be notified
in writing of this decision.
g) Where the Divisional Head finds issues raised by the client as
insufficient, the decision shall be upheld. A written response shall be given to
the client detailing reasons why it was upheld. The client shall also be advised
to appeal.
h) Should the client choose to appeal, the Head of department
(Commissioner) shall receive the appeal and study the merits of the case.
Where the Head of department finds the issues raised by the client credible,
the officer shall be advised in writing to settle the case. The client will be
notified in writing of this decision.
i) Where the Head of department finds issues raised by the client as
insufficient, the decision shall be upheld. A written response shall be given to
the client detailing reasons why it was upheld. The client shall also be advised
to appeal.
j) Should the client choose to appeal, the Commissioner General shall
receive the appeal and study the merits of the case. The Commissioner Gen-
eral studies and considers the merits of the appeal in consultation with the
CCD and CL&BA where necessary; Where the Commissioner General finds
the issues raised by the client credible, the officer shall be advised in writing
to settle the case. The client will be notified in writing of this decision.
k) Where the resolution of an appeal requires consultation with other
parties or organizations outside Uganda Revenue Authority, the CG may
sanction for such consultation prior to making a decision;
Should the client choose to appeal, the case will be handled under the
litigation process.
l) Where the Commissioner General finds issues raised by the client as
insufficient, the decision shall be upheld. A written response shall be given to
the client detailing reasons why it was upheld. The client shall also be advised
to appeal in Court.
m) Should the client choose to appeal, the case will be handled under
the litigation process.

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 Customs

8.2 Appeals to the Tax Appeals Tribunal

A person dissatisfied with the decision of the Commissioner may appeal to

the Tax Appeals Tribunal

A person intending to lodge an appeal against the decision of the Commis-

sioner shall do so within 45 days after being served with the decision and
shall serve a copy of the appeal on the Commissioner.

9.09.0
| Clearance of of
Clearance Passengers andBaggage
Passengers and Baggage
9.1 Clearance of Passengers
Embarking and disembarking passenger clearance is done only at Customs
gazetted areas such as airports, seaports, landing sites and points of entry
at land borders.

All disembarking passengers must make a declaration to Customs through

the Red or Green Channel according to the EAC-CMA.
• Green Channel means “NOTHING TO DECLARE”.
• Red Channel means “SOMETHING TO DECLARE”.

9.2 Passenger Baggage and Personal Effects

Baggage and personal effects imported into Uganda by passengers may
be declared and due taxes paid or are exempted from taxes in the manner
specified below:
(a) General
For goods to be exempted from taxes, the general condition is that the goods
must be the property of and in the company of the passenger. They should
be for the personal or household use of the passenger and of such kinds
and quantities as the Customs Officer may allow and in accordance with
the specified restrictions. Any trade goods or goods for sale or disposal to
other persons accompanying a passenger are cleared in the same manner
as other imported goods on which duty is payable except that the customs
value shall not include air freight.

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Customs

(b) Duty Free Allowances for Passengers

The following items may be imported as duty free items:
a) Spirits (including liquors) or wine, not exceeding one litre or wine
not exceeding two litres.
b) Perfume and toilet water not exceeding in all one half litre, of which
not more than a quarter may be perfume.
a) Cigarettes, cigars, cheroots, cigarillos, tobacco and snuff not
exceeding in all 250 grams in weight.
The import duty free allowance shall be granted only to passengers who have
attained the age of eighteen years.
Goods up to the value of US$500 for each traveler, other than the goods
specified above, are granted exemption when imported by the traveler in
his/her accompanied baggage or upon his person and declared to a proper
officer provided the person has been outside Uganda for a period exceeding
24 hours.
Cross border movements of currency and negotiable bearer instruments.
Anti-Money Laundering (Amendment) Act 2017)
(1) A person—
(a) entering or leaving the territory of Uganda and carrying cash or bearer
negotiable instruments exceeding one thousand five hundred currency points
or the equivalent value in a foreign currency; or
(b) arranging for the transfer of cash or bearer negotiable instruments
exceeding one thousand five hundred currency points or the equivalent value
in a foreign currency into or out of the territory of Uganda by mail, shipping
service or any other means,
shall declare that amount to the Uganda Revenue Authority in the manner
prescribed by the Minister by regulations.
Regulation of Tobacco Products (Tobacco Control Act 2015)
A person shall not import, distribute, manufacture, process, sell or offer for
sale, or bring into the country
a) An electronic delivery system including electronic vaporization device
or cartridges with nicotine – containing liquid or other substances to be
vaporized
b) A water pipe tobacco delivery system including the water pipe device
or the water pipe tobacco product or other substances to be used in the
water pipe delivery system.
c) A smokeless or flavored tobacco product
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 Customs

10.0
10.0 | Post and Courier
Post parcel Parcels
and courier
10.1 Definition of a parcel
A Post Parcel or postal article includes letter, postcard, packet, parcel, or
other article whatsoever, in course of transmission by post.
10.2 Clearance of Post parcels
There are a series of customs activities, processes, procedures, tasks and
decisions that when taken in laid down sequence produce a desired result
as indicated below;
10.3 Steps followed at Post Office
A Post parcel or postal article includes letter, postcard packet, parcel or other
article whatsoever, in course of transmission by post.
a) The owner (client) produces the call note to post office staff at the
post office Building.
b) The parcel is retrieved and presented to customs by Post office staff.
c) The parcel is then opened and the contents verified by the customs
officer in the presence of the owner of the Parcel.
d) If the value of the goods in the Parcel is USD 50 above then Customs
Officer at the Post Parcel office Captures an assessment notice (PP4) for the
cargo in the parcel and issues an assessment of the taxes to the recipient.
e) Assessed taxes are paid to URA authorized Bank (The clients are
given 21 days within which to pay the taxes. If one fails to pay within stipulated
time, the parcel may be transferred to customs warehouses in Nakawa where
they may be auctioned to recover taxes.
f) A receipt is issued to the client by the respective Bank
g) The client presents the receipt to Customs office at Posta for release
of the parcel.
h) The officer confirms payment releases the goods to the client
How the parcels postal article destined to the country side (Up country) are
cleared out of customs controls.
Under circumstances where it is not possible to have clients available for
verification, parcels are verified at Kampala Main Post office by customs staff
in presence of Post Uganda staff.
Where the Value of the goods is USD 50 and above, then the customs officer at
Post Office Kampala assesses the taxes payable and attaches the assessment
on the Parcel Goods are handled over to Post Uganda for dispatch.
Assessed Taxes are paid directly to the Bank instead of paying the taxes to
Posta Uganda, this is done in the major towns like Jinja, Entebbe, Mbarara,
A Guide to Taxation in Uganda | Fourth Edition 115
Kabale, Mbale (among others)
Customs

Any goods that are not collected are returned to Kampala Post Office and
reconciled. A general list is made including unclaimed parcels from the Kampala
Main Post Office and parcels transferred to Customs warehouses for public
auction.
10.3.1 Post parcels exported for repair
a) Upon return, a re-importation certificate will be required and VAT
will be charged on repair costs. Where a new part is replaced all taxes
will be applicable.
b) For items where repair was done under warranty, a warranty certificate
will be required and if valid, no taxes will be collected.
10.3.2 Post parcels destined for the countryside
a) For upcountry parcels, you will be given an assessment for payment
of taxes after which you can pick your parcel from a designated up
country office.
b) Items destined to the countryside are handled by Post office only. They
are verified at Kampala Main Post Office by Customs staff in the
presence of Posta Uganda staff in case you are not available to
ascertain details of contents.
c) Any goods that are not collected are returned to Kampala Post Office
and reconciled.
10.3 Steps followed at DHL
a) Cargo is transferred from airport to the head office under customs
seal.
b) Goods are accompanied by a copy of manifest with the details of the
parcel in the truck.
c) Seal is broken by customs, goods are sorted using a hand held scanner
that is preset to capture all goods above USD 50.
d) For goods with value of USD 50 and above, a tally sheet is populated
and for goods of value USD 49, are handed over for delivery.
e) Customs however has the mandate to verify the low values and confirm
that they are indeed low values or under declared. If under declared,
goods will be added onto the tally sheet of the goods to pay taxes.
f) A client is given 21 days within which to pay for the Shipment and upon
payment of taxes, goods are released. If a client fails to pay taxes,
goods are put on Want of Entry
g) For goods above USD 50, an IM4 is captured by the clearing agent for
clients who have TINs, while for clients without TIN, customs captures
PP4, after verification of the goods.

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 Customs
h) All tax payments are made directly in the bank.
i) Once payment of taxes is made, goods are then released and handed
over to DHL for delivery.

•
10.4 Prohibitions or restrictions on goods transmission by post
• All Prohibited goods are seized and retained according to Section 210
(a) of the East African Community Customs Management Act. E.g. Drugs,
narcotics, pornographic items.
• All Restricted goods are held until the relevant authorities accord con-
ditions regulating their importation. E.g. NDA authorizes importation of
all human drugs in the country.
10.5 Valuation of post parcels
• The owner of goods is required to present the true invoice value of goods
being exported or imported on customs declaration forms provided.
• The value and classification of the goods inside the parcel determine the
taxes payable.
• In the absence of the declarations, the value shall be determined in
accordance with the 4th schedule of the East African Community Customs
Management Act to determine values of goods as alternative valuation
methods are used (under GATT valuation methods)
N. B Some Clients intentionally under declare the values since they know
that the threshold is USD 50 the client needs to know that the Customs officer
is mandated to uplift the value or apply alternative valuation methods under
GATT valuation methods in case the declared value does not match the contents
in Parcel).
10.6 Treatment of gifts, donations or Personal effects
All goods entering into the country are regarded as imports and liable to
pay taxes, unless the value is below USD 50 or tax exempt by law. A list of
exemptions is provided in the fifth scheduler of the Eat African Community
Customs Management Act.
The East African Community Customs Union common external tariff book
contains the tax rates per item.
What kind of tax is collected on imported goods in parcels?
• Import Duty-based on the common external tariff and therefore varies with
each item.
• VAT - at 18 %
• Excise duty- The rates vary depending on the product being imported (Refer
to the rates under the Excise Tariff Amendment Act
• Withholding Tax-form of refundable Income tax charged at the time of
importation at a rate of 6% A Guide to Taxation in Uganda | Fourth Edition 117
Customs

11.0
11.0 | Warehousing
Warehousing of of goods
goods and vehicles
and motor motor onvehicles
arrival on arrival

a) When goods/motor vehicles arrive at the warehouse, they are received

by Customs both physically and electronically.
b) The transit documents from the boarder will always indicate the
period within which the goods/motor vehicles are supposed to be delivered
at the warehouse and this period must be adhered to.
Where the stipulated time on the transit document has expired with no
authenticated reason for delay, the in charge of the vessel would have
committed an offence and liable to pay a penalty not exceeding $200.
c) After electronic receipt (called validation), the documents are handed
over to the clearing agent who should be dully appointed by the importer to
clear the goods/motor vehicle.
d) The appointed clearing agent makes a declaration for either home
use (direct payment of taxes), warehousing, Transshipment, transit or export
processing zones.
e) The declaration must be done within 02 days of arrival at the
warehouse of destination.
f) Where goods remain un entered within the stipulated time, then such
goods if the customs officer so requires be removed at the expense of the
agent of the vessel to a customs warehouse.
g) Goods are verified in the presence of the Importer or the appointed
agent or both to take account and determine the accuracy of the entry/
declaration made.

11.1 Goods declared for warehousing

Warehousing means that imported goods/motor vehicles are deposited for
storage in a licensed bonded warehouse with the authority of the person in
charge of that warehouse.

A Warehouse keeper is the holder of a Customs license in respect to a bonded

warehouse.
What to note:
a. Items are warehousable for a period of six months (180 days), with a
period extension of 3months maximum, granted on request. This means that
importer should request for the extension if it’s required.

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 Customs

b) The only exception to the above are new motor vehicles warehoused
by approved motor assemblers and dealers, wines and spirits warehoused in
bulk by licensed manufacturers of wines and spirits; and goods in a duty-free
shop.
c) Warehoused goods on permission can be;
• Transferred to a new owner on payment of $10
• Re-exported to a foreign destination
• Cleared (paid for) in part
• Removed from one warehouse to another
• Re-packaged
• Allowed to do assembling/manufacturing in line with
Sec.51 (1) (d) of the EACMA
• Removed to an export Processing Zone
• Temporarily removed for repairs or modification (in case of vehi-
cles) where applicable. A security in form of bank draft covering
the taxes payable is deposited with Customs
d) The following goods are not warehousable
• Acids for trade and business;
• Ammunition for trade and business;
• Arms for trade and business;
• Chalk;
• Explosives;
• Fireworks;
• Dried fish;
• Perishable goods & goods whose expiry date is less than
6months from the time of declaration;
• Combustible or inflammable goods except petroleum
products for storage in approved places;
• Matches other than safety matches and any other goods which
the Commissioner Customs may gazette
e) Once goods exceed the mandatory warehousing period, they are
tagged for auction. However, the owner can redeem them by paying 1% of
the value if they have not been advertised for sale or 3% of the value if they
have been advertised. Perishable goods may be sold by either public auction
or private treaty without notice at any time the time before their shelf life
expires.
f) Goods that are advertised in the category above are sold by Customs
through a public auction.

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 Customs

12.0 |Groupage Cargo Clearance Procedure

1. The importer delivers goods to the Consolidator of his/her choice
(Shipper) in the foreign country (eg. China, UAE) together with all the
documents showing the nature of the packages, description of the items as
well as the invoices, packing list.
2. The individual importers must provide details of their names, contacts
and Tax Identification Numbers (TIN) to the consolidator at the point of
delivery of the goods at the consolidator’s warehouse. These details ought
to appear on the master Bill of Lading and the House bill of lading.
3. The consolidator shall ensure that before the goods arrive at the first
port of entry for instance Mombasa/Dar-es-Salaam, all individual importers
in the container have been IDENTIFIED; TINs details indicated on the Master
Bill of lading and have submitted the required purchase documentation i.e.
invoices evidence of payments, parking lists with a detailed description of
goods, quantities, delivery notes etc.
4. When goods arrive at the first port of entry port in the Partner State
(eg. Mombasa, Dar-es-Salaam), transit entries are captured to move the goods
to the destination bond in Uganda, where final clearance will take place. These
Customs documents are called WT8 and T1.
5. When the Container arrives in the ICD/Bond, the bond operator
and Customs officer shall receive the cargo. WT8/T1 auto-converted to
the warehousing entry (IM7), the registered consolidator, the appointed
agent shall handle cargo examination with customs and upload examination
accounts for further processing.
6. The consolidator then shall initiate a transfer of ownership from his
names to the individual taxpayers they consolidated (breaks bulk). Transfer
of ownership fees are paid and approval of transfer is done by the Supervisor
Customs
7. All individual importers will be required to appoint their own licensed
Customs agents to take on the process of clearing the items after the
consolidator has approved the transfer of ownership.
8. The individual importers have an option to pay taxes (IM4) after
transfer of ownership approval or continue with the warehousing process as
per the warehousing procedures or goods are re-exported. All the purchase
documents (invoices, evidence of payments, parking lists with detailed
description of goods, quantities, delivery notes Master and House Bill of
lading etc.) must be declared and attached on all customs declarations.

Transfer of ownership of warehoused goods

Steps followed

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 Customs
Step I:
Importer (Transferor or registered consignee on the subject consignment) writes
to Manager Customs Warehousing a request to Transfer Ownership of Goods
specifying in the request:
a. Date of the letter
b. The affected declaration and its date
c. The general description and quantities of the goods to be transferred.
d. The total Customs Value of the goods involved
e. Reasons for the transfer
f. Clearing agent (full names of both Company and Individual) authorized
to process the transfer of ownership transaction
g. The TIN of the importer (transferor) and transferee
h. Currently active physical address, telephone and email address of the
transferor and transferee
i. Full names of the person(s) signing on the letter as they appear on
their National ID or Passport
In case of a corporate entity, the above letter should be on the company’s
(transferor’s) known letterhead.

Step II:
Attach the following mandatory supporting documents
a. A copy of the national ID of signatories and each individual named in
the letter referred to in STEP I above.
b. A copy of any (for corporate entities) contract, agreement or (for the
case of individual transferors) sworn affidavit on the basis of which the above
transfer is to be effected.
c. The document mentioned in ‘b.’ above should be submitted to Customs
in original form and duly signed by the transferor and transferee or their
authorized signatories.
d. Copy of the evidence of payment of stamp duty fees wherever
applicable.
e. In case the transferor is a corporate entity, a ‘Company Form VII’ that
shows the current directors of the corporate entity that is certified by registrar
of companies should as well be attached.
f. Copies of National IDs or Passports of all individuals that have signed
on any documents to be submitted alongside the request to transfer any goods
should be attached and endorsed by the owners of the IDs.
g. Copies of the first page of each Customs document pertaining to the
subject goods arranged chronologically from: Transfer Form - IM7 - T1 – WT8
– Bill of Lading (Original Customs Copy), Invoice and Parking List.
Step III:
1. Submit all the above applicable documents to the appointed clearing agent.
A Guide to Taxation in Uganda | Fourth Edition 121
Customs
2. Appointed clearing agent initiates the transfer of ownership process in
the Customs system.
3. Appointed clearing agent scans all the above required documents and
submits them through the Customs Help tool under the warehouse Problem
Code – ‘Warehousing REC – Transfer of Ownership’
4. The Customs Help tool request shall be processed by the Customs
Warehousing team within 24 hours if there is no query.
5. In case of any query, the same shall be handled and responded to by the
appointed clearing agent through the Customs help tool ticket for the
subject transaction
Step IV:
Completion of the transaction by the Customs Warehousing reconciliation
team and giving applicant feedback.

1. In - Charge reconciliation shall receive requests for transfer of ownership

of cargo through the help tool or (only where help tool is down) manually
and handle or allocate them to different reconciliation team members for
handling.
2. The Officer shall study and vet all documents presented and may ask any
other relevant document for purposes of making an objective and informed
decision through help tool or manually written queries.
3. In the case of recognized consolidators, the cargo is expected to be
warehoused by the consolidator in the names of the consignee that
contracted the importer who shall go through the transfer of ownership
process by themselves and attach the Master bill and House Bill.
4. Officers shall handle cases of transfer of ownership of cargo of CIF value
not exceeding USD 50,000. For any transfer of cargo whose BIF is above
the stipulated amount, the Supervisor should be consulted.
5. Any transaction that contravenes this process should be queried; and where
the client fails to provide satisfactory response, - rejected and reasons
for rejection clearly indicated in writing. The client can appeal against
the rejection in which case they can be referred to the next office in the
hierarchy for consideration of the appeal.
6. The process should take less than six hours of our response and querying.
Resolution of each transaction should be within 24hrs of the request.
7. Transfer of ownership of warehoused goods from a Private Entity to a
government entity for which taxes are exempted should only be authorized
with written permission from a supervisor or manager warehousing.

Current process of change of ownership.

• Agent appointed by the client initiates the request to transfer ownership
in asycuda world by indicating details of the current and new owner plus
details cargo to transfer.
• The system generates the assessment for change of ownership fees and
122 A Guide to Taxation in Uganda | Fourth Edition
 Customs

gets paid in bank of choice.

• Agent or client lodges the transfer of ownership request on help tool and
with all transaction documents uploaded (As in step II above). If help tool is
down, client lodges manually to the supervisor or in charge reconciliation.
• The ticket is allocated to either sector Supervisors or in charge reconciliation
• The supervisor or in charge reconciliation vets or validates the attached
transaction documents and if satisfied proceeds to system approve in
asycuda world
• Upon system approval(transfer), the client is then able to capture the
subsequent declaration in the names of the new owner

13.0 | Auction at Customs Warehouse

Customs warehouse means any place approved by the Commissioner for the
deposit of goods unaccounted for goods, unexamined goods, abandoned
goods, detained, or seized goods, goods for safe custody. If such goods are
not claimed and redeemed, they are disposed of off as the Commissioner
may decide.
Note:
a. Goods deposited in the customs warehouse must be lawfully removed
within thirty days (30) after deposit.
b. Where the goods above are not removed within 30 days, the commis-
sioner shall give notice by publication in the Gazette that unless such goods
are removed within thirty days (30) from the date of the notice, they shall
be deemed to have been abandoned to Customs for sale by public auction
and may be sold in such a manner as the Commissioner may deem fit:
c. Customs allocates lot numbers (Identification numbers) for easy
identification by the prospective buyers
d. Owners of such goods (the category that is redeemable) are given
30 days from the date of publication within which they can redeem their
goods and pay the FULL taxes
e. The exercise of the auction is conducted through online bidding
f. Clients are encouraged to view the lotted items, before the day of
the auction
g. The bidder with the highest bid amount is declared as the winner
h. For online auction, however, the winner is given 48 hours within which
100% payment is made to the lot won else the bid is given to the next bidder
with the highest bid amount.

Online auction
The Online Auction site can be accessed through
http://singlewindow.go.ug/auction/home.

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 Customs

To participate on the online auction, the participant is required to be

registered for taxes (have an active TIN)
• On the home page, the participant should click on auction to navigate
through the available auction lots and click on view for more details.
• Bidder is required to login using his URA portal account details (TIN and
Password) in order to participate in the bidding process.
• A payment registration slip will pop up to enable the auction
participant select his preferred Bank and create a payment registration
slip to enable him/her pay for the participation fee.
• Once the payment is reconciled, the bidder will log into the website again
to have more options. The bidder can view my messages under his login
when he clicks on his TIN.

14.0 Temporary Importation

14.014.1
| Temporary Importation
Temporary importation
Customs procedure where goods brought into a Partner State are for use
for a limited time (temporary use) and will ultimately preferably within 12
months be exported out of the country of importation on a prescribed form
and subject to a security bond or carnet de passage en Duane (Passbook) or
Pass Sheet or other similar importation documents issued under guarantee
of an authorized association in respect of the vehicle or goods

14.1 Temporary imports

This means to bring or cause to be brought, into the partner state. Goods
are imported into the partner state and then exported within the time limit,
normally not more than a year.

14.2 Procedure on Temporary Importation

• A proper officer is satisfied that the goods are imported for
temporary use or purpose
• Goods imported should be qualifying to pay duties
• Duties ordinarily payable secured by a customs bond or other form
of security
• Temporary importation period does not exceed 12 months
• Temporary importation without payment or guarantee of duties is
only with approval of a proper customs officer
• Deposit is refunded or bond security cancelled with proof, goods
were re-exported

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 Customs

14.3 Goods allowed for Temporary Importation

a) Commercial Travelers’ samples
b) Goods, including stage properties, imported for local exhibition or
entertainment
c) Goods imported solely for renovation or repair
d) Touring propaganda material not otherwise prohibited
e) Any vehicles and goods of a kind described in regulation135-137
f) Such other goods as Commissioner may allow subject to such con-
ditions as he or she may impose

14.4 Goods not accepted for Temporary Importation

• Cinematograph films (except films of maximum width of 16mm and length
of 500metres imported for free exhibition for the sole purpose of pro-
moting travel in the country therein depicted) may not be imported under
temporary importation privileges
• Consumable stores such as beverages of all kinds
• Goods imported by residents
• Goods which do not attract duty

14.5 Refund of deposit/ bond discharge

• Refund of deposit or bond discharge on temporary imports may be al-
lowed:
• The owner of the goods being re-exported gives notice of their intended
export
• Presents them for inspection before exportation
• Contravention of the conditions of importation makes all goods
liable to duty.

14.6 Administrative guidelines on temporally importation of registered

vehicles
Temporary Importation of Private Foreign Registered Motor Vehicles. In ref-
erence to EACCMR 2010,

14.2 Regulation 136 and 137 effective 1st July 2019

1) The owners of foreign private motor vehicles must have a valid Tem-
porary Importation of Road Vehicles Form (Form C32) issued at the Border
Station
2) To obtain a Form C32, an individual MUST:
a. Be a foreigner with foreign identification.

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 Customs

b. If Ugandan has a valid work permit or proof of residency in a

Partner State
c. Have the foreign Motor Vehicle Registration in his or her name
d. Have a valid Power of Attorney from the motor vehicle owner, in case
the operator is an agent of the owner
e. Provide satisfactory reasons for the temporary importation with clear
physical and contact address of place of aboard inland
f. Pay temporary license fees (US Dollars 20) where applicable

3. Individuals without the aforementioned requirements WILL NOT be issued

with form C32 or be allowed operate a foreign registered motor vehicle within
the country and any such vehicle shall be impounded.
4) Temporary importation of foreign registered motor vehicles shall be
granted ONLY once, for a period not exceeding three (3) months
5. Extension of the Form C32 will not be allowed and such vehicle is ex-
pected to exit within the three months or else be impounded
6. No vehicle will be allowed out of Customs Border Station without the
owner/agent being in possession of a valid Form C39
7. Any person intending to sell or alter or replace such a foreign registered
vehicle must first seek permission from the Commissioner

14.9 Re-Importation
Means the Customs procedure under which goods which were exported
may be taken into home use free of import duties and taxes, provided they
have not undergone any manufacturing, processing or repairs abroad and
provided that any sums chargeable as a result of repayment or remission
of or conditional relief from duties and taxes or of any subsidies or other
amounts granted in connection with exportation must be paid. The goods
that are eligible for re-importation in the same state can be goods that were
in free circulation or were compensating products.

15.0 | Transit and Transshipment

Customs transit refers to the movement of goods imported from a foreign
place through the territory of one or more of the Partner States, to a foreign
destination under customs control.
In simpler terms, this can be explained as the transport/movement of goods

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 Customs
from an office of departure to an office of destination under customs control.

15.1 Transit Management

Transit management is one of the procedures that play an important role in
facilitating international trade. It is the administration of the flow of goods
within, through and out of the country.

Goods may be declared for in-ward or through-transit upon arrival at the first
point of entry from another country. Goods may also be declared for outward
transit from Uganda (exports and re-exports) to other countries.

To ensure that the revenue relating to goods in transit is protected, several

measures are put in place;
1. A Customs declaration through a licensed clearing agent is prepared and
a transit document (T1) is generated to facilitate the movement of goods
2. Customs seals; Cargo in transit is sealed with either a metallic or an elec-
tronic seal which allows for real time monitoring until it reaches its desti-
nation. It is an offence to tamper with a customs seal of any kind and the
same must remain secure up to the destination. Any confirmed tampering
attracts heavy penalties
3. Customs guarantee; This is what is commonly known as a customs bond
allocated to each transit declaration. The customs guarantee ensures that
the customs duties and taxes which are suspended during a transit oper-
ation are covered at all times (will be paid if the goods are not presented
at the customs office of destination)
4. The amount of guarantee must be sufficient to cover the suspended cus-
toms duties and taxes.
5. The transit bond shall only be retired after customs is satisfied that the
goods are intact and transit documents have been presented at the des-
tination office

15.2 Treatment of Goods in Transit

Goods landed for removal in transit are cleared on Form C.17 within 21 days of
commencement of their discharge from importing vessel. Beyond 21 days they
are deposited in customs warehouse
• Goods entered for transit must be exited within 30 days or within such
further period as the Commissioner Customs may allow. Take note of ad-
ministrative provisions allowed by the Commissioner Customs of 7days for
national transits and 10 days for regional transits
• The conveyance of goods in transit is through routes approved and gaz-
zetted by the Commissioner Customs.
• The owner/approved agent shall specify their preferred transit route at the
time of declaration of the entry and is required to stick to the same. Any

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Customs
diversion from the specified route is an offence which attracts penalties
• A Customs Security Bond is executed by the owner/agent to cover the tax
liability of the goods at the office where the goods are entered.
• The amount of guarantee must be sufficient to cover the suspended cus-
toms duties and taxes
• Provisions of any law prohibiting or restricting the importation of goods
will not apply to transit goods destined to a foreign destination unless
the goods are specifically listed in the Third Schedule to the East African
Community Customs Management Act by order of the council
• Transit goods stored in a customs area or transit shed are at owner’s risk
and liable to rent and other charges as may be prescribed
• Where the goods are handed over to an owner of the transit shed who is not
an agent of the importing aircraft or vessel, the owner of the transit shed
shall be responsible and accountable for the goods and shall be liable for
payment of duty on the goods if the goods are not delivered or otherwise
accounted for
• Goods under transit may be transshipped from one means of conveyance
to another
• Where the owner/agent wishes to change destination office, extend transit
period, diversion to the garage for repairs, he/she must ask for permission
from the Transit Monitoring Unit (TMU) with justification

15.3 Licensing of vehicles for conveyance of goods in transit

All vehicles/vessels carrying transit goods are required to have a Transit Goods
License (TGL) renewable every year

The Commissioner Customs may license any vessel or vehicle intended to be

used for the conveyance of any goods subject to Customs control and any
transporter upon application made in such manner and upon payment of such
fees, as may be prescribed.

A person who uses any unlicensed vessel for the conveyance of any goods
subject to Customs control, or uses any unlicensed vehicle for the conveyance
of goods to which other legislation of any of the Partner States applies com-
mits an offence and shall be liable to a fine not exceeding five thousand dollars

15.4 Procedure for licensing vehicles

The process of application and issuance of the Transit Goods License (TGL)
is automated and can be accessed online through http://singlewindow.go.ug/
atransporter/
1. The user will be required to create an account in order to access the portal
2. After logging in, the user fills an online application form specifying the
customs office and the preferred inspection location. This is where the

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 Customs
applicant wants his/her vehicle to be inspected
3. After filling the application form (C28), the user then submits the appli-
cation.
4. The application will be assigned to an officer (Inspector) for inspection
5. The transporter will be required to deliver the physical motor vehicle along
with its registration documents for inspection to the customs location which
they selected
6. After approval, the application will be ready for payment. The transporter
will be able to generate a payment slip by clicking on the payment icon on
his/her application
7. The license will automatically be generated after payment has been made

Requirements and Conditions for a Transit Goods License (TGL)

• The vehicle must be constructed in a manner that it is sealable i.e. goods

cannot be removed from or introduced into the sealed part of the vehicle
without breaking Customs seals.
• It does not have concealed spaces where goods can be hidden. All spaces
in the form of compartments or other spaces that are capable of holding
goods are readily available for Customs inspection
• It should not have any false floors, walls or roofs
• Hinges must be made and fitted such that doors and other closing systems
cannot be lifted off the hinge-pins and other fasteners are welded to the
outer
• Doors should cover all gaps and ensure complete effective closure.
• The vehicle/vessel must be marked with the words “TRANSIT GOODS”
printed boldly and clearly on both sides of the vehicle.
• The vehicle/vessel must be registered.

The Transit Goods License fees will be USD 200 annually for every carrying
unit/vehicle

The Transit Goods License once issued by one partner state shall be mutually
recognized by all the partner states

Where it is justifiable depending on the nature of goods the owner/agent/

transporter who wishes to use an open truck to transport transit goods may
seek permission from Transit Monitoring Unit

15.6 Transshipment
15.6.1 Meaning of Transshipment

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 Customs
Transshipment means the customs procedure under which goods in transit are
transferred under customs control from one conveyance to another (from one
carrier to another) within the customs controlled area or along the gazetted
transit route.

There are practical incidents that may warrant transshipment of goods and these
may include but not limited to accidents, mechanical breakdowns, change in
mode of transport and may involve the following categories
1. Change in the prime mover (tractor head)
2. Change in mode of transport (eg road to rail, air to road, water to road,
rail to road etc)
3. Changing the means of carriage (eg from one container to another, from
a container to a wagon, from one truck to another, from truck to a container
etc)

15.6.2 Transshipment Process

1. An appointed clearing agent who wishes to transship his/her cargo, makes
a formal request/application to Transit Monitoring Unit (TMU) highlighting
justifications with all the supporting documents
2. Upon examining the transshipment request, the approving authority shall
either approve or reject the request or request for more information
3. Upon approval, an officer is assigned to supervise the transshipment ex-
ercise.
4. The assigned officer shall collect transshipment fees of $15 and thereafter
proceed to supervise the transshipment process
5. On completion, goods are secured (fix a customs seal(s) and the customs
entry is inspected/amended where applicable
6. Where an offence is detected (e.g. illegal transit diversion, mis-declaration,
under declaration), the officer shall raise a seizure notice and manage the
offence
7. The Officer shall handover the documents together with a copy of the
transshipment account to the driver and then flag off the truck to proceed

15.6.3 Treatment of accident cases involving goods in Transit

1. The owner/appointed agent shall immediately report the accident to Transit
Monitoring Unit or the nearest Customs office and a customs officer shall
visit the scene
2. Where goods are not destroyed, the normal transshipment process shall
take course
3. Where goods are partially damaged, the officer makes a verification report
highlighting the extent of damage. The salvaged goods are transshipped
to new means of transport and sealed to resume transit.
4. Where goods are completely destroyed, a customs officer shall make a
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 Customs
report highlighting that no goods were salvaged.
5. Where the Commissioner Customs is satisfied that the goods were com-
pletely destroyed, the transit bond shall be reconciled and cancelled.
6. Where it cannot be proven that goods were destroyed but found missing,
then all the due taxes are payable
7. All accident cases must be supported by a police accident report

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 Customs

16.0 |Export Procedures

16.1 Export of Goods
This is a process of taking goods and services from Uganda to a foreign
country. This process is subdivided into the two (2) categories below

16.2 Intra Region Cargo (Transfers): traded within EAC partner states
a) A declaration is made in the country of importation’s Customs System
by the client’s declarant (agent)
b) When the declaration is released after all the necessary checks, its
then transmitted to URA’s Asycuda system.
c) Then the respective customs officers will then, issue a C2(Cargo
Movement Document) on the transmitted entry to permit the cargo to move
to the importing partner state.
16.3 Exports
Cargo originating from a Partner state to a destination out of the Region
(East Africa), e.g. coffee exports from Uganda to Singapore
a) A declaration is made in the country of Exportation’s Customs System
by the client’s declarant (agent)
b) When the declaration is released after all the necessary checks, its
then transmitted to the KRA Customs system ICMs.
c) Then the respective customs officers of KRA will then, issue a C2
(Cargo Movement Document) on the transmitted entry to permit the cargo
to move through the partner state to the port of discharge Mombasa.

Please Note:
In the EACCMA Sec 77.-(1) Goods which have been put on board on any air-
craft or vessel for export, or for use as stores, or as passengers’ baggage, shall
not, save with the written permission of the proper officer and in accordance
with such conditions as he or she may impose, be discharged at any place
within the Partner States.
16.3.1 Types of exports
Permanent exports: This covers goods especially originating in the country,
exported and intended to remain permanently or to be consumed in the
foreign country.

Temporary exports: This covers goods which are exported for special pur-
poses and are to be returned after that purpose. E.g. goods exported for
repair/refurbishment, or exhibition.

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 Customs

Re-exports: This covers goods originally imported in the country but later
exported to a foreign country such as
a) Temporary imports,
b) Goods warehoused at importation and thereafter entered to be
exported to another country, OR
c) Goods entered for Home Consumption and later exported to
another country.

16.3.2 Exporting goods outside Uganda

The exporter can improve his/her cash flow through the claim of a refund of
money spent on packing materials, e.g., boxes, Gunny bags.

The exporter can also claim back money paid as VAT, during the production
process of the exported goods. All exports do not pay taxes except; Unpro-
cessed hides and skin, Fish, and unprocessed tobacco.

A taxpayer who wishes to re-export their goods to another country, should

note that income earned from the re-exported goods is taxable and should
be declared during filing of their returns to avoid penalties and or interest.

The exporter/re-exporter has to be registered with a Taxpayer Identification

Number. Please note that all goods manufactured for export must be labeled
‘produced for export’.
Remember before packaging your goods for export consult with Uganda
Export Promotion Board to get more information on Eco-labeling, finding
buyers for your goods, open account trading, how prices are determined
internationally and much more.

The exporter is required to appoint a customs agent to transact on their

behalf. The exporter is required to obtain an export license from the Uganda
Export Promotions Board. The exporter must secure the services of a licensed
transporter (where applicable).

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Customs

16.3.3 Entering Cargo for Export

The whole of cargo intended for export should be entered by the owner of
such cargo in the manner prescribed. The owner of cargo intended for ex-
port is required to furnish to the proper officer full particulars, supported by
documentary evidence, of the goods referred to in the entry.

Goods intended for export are required to be exported within thirty days from
the date of entry or such further period as the Commissioner may allow (Sec
2A of EACCMA (Amendment) Act 2011. Breaching the provisions of Sec 73
is an offence and goods in question are liable to forfeiture.

Exports that may be exempted from a Single Administrative Document in-

clude:
• Bona fide personal baggage of the passenger or members of the
crew
• Goods intended for sale or delivery to passengers or members of
the crew
• Mail bags and postal articles in the course of transmission by post

16.4 Taxation and exports

a. The export value of goods is the value of the goods at the port or
place of shipment or exportation plus all charges incurred in delivering the
goods on board the aircraft, vessel or vehicle of exportation
b. Where the cost of the goods cannot be determined, the cost of similar
or identical goods exported from a Partner State at about or the same time
shall apply
c. Where the value of the goods cannot be determined under subsec-
tions (1) or (2) then the proper officer may determine the value of such goods

16.4.1 Treatment of goods liable to export levy

Where goods are liable to export duty:
a) The amount of duty shall be stated on the export entry of the
goods, and
b) The goods shall not be exported until the export duty has been paid
or security thereof given to the satisfaction of the proper officer
If the goods entered for exportation are examined by the Proper Officer and
discrepancies found from those on the entry an offence is committed and
the goods shall be liable to forfeiture.

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 Customs

Subject to the provisions of any law in force in a Partner State, export duty
shall not be levied on the exportation from the Partner State of any goods
grown, produced, or manufactured, in another Partner State; and such goods
shall on exportation, be subject at the place of exportation only to the export
duty, restrictions and conditions imposed under the law of the Partner State
in which they were grown, produced, or manufactured.

Also note that:

Income earned from the re-exported goods is taxable and should be declared
during filing of the re-exporter’s returns to avoid penalties and or interest.

16.5 Refunds on Exports

The exporter can claim of a refund of money spent on packing materials, e.g.,
boxes, Gunny bags. The exporter can also claim back money paid as VAT,
during the production process of the exported goods.

Therefore,
• All goods manufactured for export must be labeled ‘produced for export
• The exporter is required to obtain an export license from the Uganda
Export Promotions Board.
• In the case of goods on which drawback is to be claimed, the particulars
on the entry are, whenever possible, to be compared with the particulars
of the respective import entry.
• No drawback is payable on damaged or spoilt goods, unless the desig-
nated officer is satisfied that the goods were accidentally destroyed on
board or were materially damaged after loading, and have been aban-
doned to the Customs.
• Also, drawback may not be allowed on provisional entries i.e. only goods
that were perfectly cleared and in respect of which an invoice was pre-
sented to Customs may be considered for drawback.

17.0 | Prohibited and Restricted Goods

17.1 Prohibited goods

These are goods whose exportation, carriage coastwise or transfer of which
is completely not allowed by any of the laws in force in the Partner State.

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Customs

17.2 Prohibited exports

Prohibited exports are listed in Part A of the Third Schedule of the EAC-CMA.
Ideally these are all goods the exportation of which is prohibited under this
Act or by any written law for the time being in force in the Partner States e.g.
narcotic drugs. See Sec 70 (1) of the EACCMA

17.3 Restricted exports

These are goods whose exportation, carriage coastwise or transfer of which
depends on the fulfillment of the conditions regulating such exportation
under the Customs laws or any other written laws.

Restricted exports are listed in Part B of the Third Schedule of the EAC-CMA
E.g. Waste and scrap of ferrous cast iron, timber from any wood grown in
the Partner States. Sec 70 (2) of the EACCMA

17.4 Restricted goods

Restricted goods include the following:

• All goods the exportation of which is regulated under this Act or
of any law for the time being in force in the Partner States;
• Waste and scrap of ferrous cast iron;
• Timber from any wood grown in the Partner States;
• Fresh unprocessed fish (Nile Perch and Tilapia);
• Wood charcoal
• Used automobile batteries, lead scrap, crude and refined lead and all
forms of scrap metals

The following goods shall not be exported in vessels of less than two hundred
and fifty tons register—
• Warehoused goods;
• Goods under duty drawback;
• Transshipped goods.
Note:
The Schedule for prohibited and restricted goods may by order in the gazette
be amended by the Council to specify the goods of which their exportation
is to be prohibited or restricted either generally or in particular cases.

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 Customs

The Council may by order in the gazette prohibit or restrict the exportation
of goods from a Partner State either to all places or to any particular country
or person.
Goods in transit, transshipment or goods exported as stores of a vessel or
aircraft unless it is otherwise stated, they are not affected by provisions of
Sect. 70 & 71 of the EAC-CMA, 2004. Nonetheless, we should further note
that although the law of prohibitions/restrictions does not bind these goods
they should be exported within such a time as the Commissioner may specify.

18.018.0
| Clearance and
Clearance of Temporary Exports
Temporary Exports

For goods under temporary export, there is need to have a detailed examina-
tion account on the export entry which should be endorsed by the Customs
station of exit. This copy will be used to support the declaration by the owner
at the time of the re-importation of the goods as supporting evidence for
the goods that were temporarily exported in order for the goods not to be
taxed as fresh imports if they are re-imported in the same state as that at the
time of exportation or to ascertain value addition and pay applicable taxes

The exporter/owner of goods is advised to get a re-importation certificate

(Form P45) from Customs for the goods under temporary exportation at the
time of clearing his goods for temporary exportation. The re-importation cer-
tificate is one of the cardinal documents that support the declaration made
to Customs at the time of re-importation of the goods.

Where goods on re-importation are liable to duty, the value of such goods
shall be the amount of the increase in value attributable to:
a) Repairs outside the Partner State;
b) Equipment or other goods added and related work done outside the
Partner State;
c) Processing or manufacturing done outside the Partner State;
d) Any other costs incurred outside the Partner State

However, goods temporarily exported for repair free of charge on account of

a contractual obligation if established by the Commissioner shall be released
without payment of taxes nevertheless, this shall not apply where account
was taken of the manufacturing defect at the time when such goods were
first released for home Consumption.

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 Customs

19.019.0
| Export
Export under
under thetheSimplified
Simplified Regime
Regime

The SE1 is configured in Asycuda world like any other regimes but unique
because of its simplified nature purposely to ease cross border trade which
is normally informal in nature
Briefs on;

19.1 The regime

• It’s a self-clearance by the exporter and no need for a customs clearing
agent.
• It’s captured by customs officers hence saves the cost of a hiring the
services of clearing agent.
• Exporter TIN is not mandatory unlike other formal regimes.
• No rigorous export transaction documents required
• The SE1 declaration takes shorter time than other declarations since some
boxes on SAD are optional
• The value of goods under this regime is less or equal to $2000
• The regime is facilitated with a simplified certificate of origin(SCOO)
which is manually issued at the border of exit

19.2 Process flow

a) Present goods to exports desk/front desk/market desk for inspection
with all relevant transaction documents (E.g. Receipt, Simplified Certificate
of origin, Identity card)
b) Customs office captures/registers a simplified export entry (SE1)
with the documents in 1 attached.
c) Assessment forms generated where applicable especially for exports
that attract levy e.g. un-processed minerals, raw fish, raw hides and raw To-
bacco, minerals.
d) Payment made in the bank of choice (Presence of pay way machine,
Agency Banking, mobile banking and commercial Banks proximal to the
processing desk)
e) System release and exit of goods by customs
f) Physical release/flag off of the consignment to the client by Customs
officer

Note: Where the export item does not attract export levy like the majority,
then no. c & d are not applicable

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 Customs

20.020.0
| Exemption Regimes
Exemption Regimes

The EACCMA outlines goods that shall not be charged duty under the 5th
schedule. This is done in 2 parts:

PART A: SPECIFIC EXEMPTIONS

A. Goods imported or purchased before clearance through the customs
by or on behalf of privileged persons and institutions
• The Presidents. Goods for use by the Presidents of the Partner States.
• Partner States Armed Forces. All goods, including materials, supplies,
equipment, machinery and motor vehicles for the official use of Partner
States Armed Forces.
• Commonwealth and Other Governments

B. Goods consigned to officers or men on board a naval vessel

belonging to another Commonwealth Government for their personal use or
for consumption on board such vessel.
• Diplomatic and First Arrival Privileges
• Household and personal effects of any kind imported by entitled per-
sonnel or their dependents
• One motor vehicle which the ministry responsible for foreign affairs of a
Partner State is satisfied as having been imported as a replacement for
a motor vehicle originally imported.
• Goods for the official use of the United Nations or its specialized agen-
cies or any Commonwealth High Commission, or of any foreign embassy,
consulate or diplomatic mission in a Partner State.
• Goods for the use of a high official of the United Nations or its specialized
agencies, or a member of the diplomatic staff of any Commonwealth or
foreign country, where specific provision for such exemption is made by
the minister responsible for foreign affairs.
• Goods for the United Nations or any of its specialized agencies for the
support of a project in a Partner State.

C. Donor Agencies with Bilateral or Multilateral Agreements with the

Partner States
D. International and Regional Organizations. Goods and equipment
imported by donor agencies, international and regional organizations with
Diplomatic accreditation or bilateral or multilateral agreements with a Partner
State for their official use.

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Customs

E. The War Graves Commission. Goods, including official vehicles but

not including office supplies and equipment and the property of
the Commission’s staff, for the establishment and maintenance of war cem-
eteries Commission.by the Commonwealth War Graves
F. Disabled, Blind and Physically Handicapped Persons Materials, articles
vehicle, which: and equipment, including one motor
• are specially designed for use by disabled or physically handicapped
persons or;
• are intended for the educational, scientific or cultural advancement of
the disabled for the use of an organization approved by the Government
for the purpose of this exemption
G. Rally Drivers. One motor vehicle for each driver and spare parts
specified in accordance with schedule 5 EACMA
H. Goods and Equipment for Use in Aid Funded Projects

PART B—GENERAL EXEMPTION

Goods imported or purchased before clearance through customs
a) Aircraft operations
b) Containers and pallets
c) Deceased Person’s Effects
d) Fish, Crustaceans and Molluscs
e) Passengers’ Baggage and personal effects
f) Samples and Miscellaneous Articles
g) Ships and Other Vessels
h) Preparations for cleaning dairy apparatus
i) Mosquito nets and materials for the manufacture of mosquito nets
j) Seeds for Sowing
k) Chemically defined compounds used as fertilisers
l) Museums, Exhibits and Equipment
m) Diapers, Urine bags and hygienic bags
n) Diagnostic Reagents and Equipment
o) Horticulture, Agriculture or Floriculture Inputs
p) Packaging Material for Medicaments
q) Education. Educational Articles and Materials as specified in the
Florence Agreement.
r) Splints for use in the manufacture of matches
s) Inputs for use in the manufacture of agricultural equipment

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 Customs

t) Relief goods imported for emergency use in specific areas where

natural disaster/calamity has occurred in a Partner State
u) Hotel Equipment
v) Refrigerated trucks
w) Speed Governors
x) Computer Software
y) Electrical Energy saving bulbs for lighting also known as
Compact Fluorescent Bulbs
z) Specialized Solar equipment and accessories
aa) Unbleached woven fabrics of a width 80 inches and above
imported for manufacture of textile materials
bb) Items imported for use in licensed hospitals
cc) Motor vehicles specially designed for refuse/garbage collection

21.021.0
| The
TheSingle Customs
Single Customs Territory
Territory (SCT)
(SCT)

21.1 Definition of Single Customs Territory

A Single Customs Territory is the full attainment of the Customs Union achiev-
able through removal of trade restrictions including minimization of internal
border controls.

It is about achieving free circulation of goods in the Customs Territory in

order to reduce the cost of doing business.

21.2 Features of SCT

• Goods are cleared at the first point of entry;

• One Customs declaration is made at the destination country
• Taxes are paid at the point of destination when goods are still at the first
point of entry;
• Goods are moved under a single Regional bond from the port to desti-
nation;
• Goods are monitored by electronic cargo tracking system;
• Interconnected Customs systems

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Customs

21.3 Benefits from the SCT

These include
• Reduced turnaround time for transporters.
• Reduced clearance time and the cost of doing business.
• Reduced the risks associated with non-compliance on the transit of goods;
• Enhanced trade in locally produced goods.
• Enhanced the relationship between the private and public sectors;
• Efficient revenue management;
• Enhanced application of Information Technology and data collection at
the regional level
• Synergy through shared resources and utilization of economies of scale.

21.4 Countries involved in the SCT

The EAC Partner States - Burundi, Kenya, Rwanda, Tanzania, Uganda and
South Sudan
Revenue Authorities have deployed officials to the first points of Entry to
facilitate the smooth operations of the SCT. URA has deployed officers at
Port of Mombasa, different locations in Nairobi, Nakuru, Eldoret, Kisumu, and
Port Of Dar es salaam.

21.5 Requirements for stakeholder to transact under the SCT

21.5.2 Importers & Exporters
• Appoint a licensed clearing agent/or get licensed for own clearance
• Develop a working relationship with shipping line agents
• Knowledge on SCT process and documentation

21.5.2 Customs/Clearing Agents

• Acquire license from respective Revenue Authorities
• Execute a Regional Bond Guarantee
• Register with Port Authorities
• Develop a working relationship with shipping line agents
• Acquire knowledge in SCT & training in other Revenue Authorities Cus-
toms systems
• Acquire access rights in the other Revenue Authorities Customs systems.
• Sensitize their clients

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 Customs

21.5.2 Transporters
These need to acquire Transit License from the respective Revenue Authori-
ties. Customs/Clearing Agents involved in the clearance process may choose
to operate under the Mutual Recognition of Customs Agents and/or relocate
to the First points of Entry (Dar es Salaam, Mombasa)

Note: those who wish to operate businesses in other Partner States must
meet the legal requirements for business registration. Customs/Clearing
Agents that are licensed by one Partner state are recognized in the other
Partner states and are granted access rights to operate in the respective Cus-
toms Systems to facilitate the clearance of cargo destined to and from their
respective countries.
21.6 Handling Customs clearance in a partner state

The Customs Agent can handle processes in another country where they have
no presence. The Customs agent may nominate another agent to handle Port
Processes, the nominated agent is captured in Box 51 of the SCT declaration.

21.7 Clearance of goods under the SCT

Under the SCT;

• Manifests submitted to Kenya Revenue Authority (KRA) and Tanzania
Revenue Authority (TRA) by shipper prior to Vessel arrival
• KRA /TRA transmits manifests to the respective Revenue Authorities;
• Importer/Agent accesses manifest data in the respective Revenue
Authority Customs Systems and makes a customs declaration/Entry.
• Taxes are paid at destination Partner state for duty paid cargo using
respective national currency.
• Physical verification of selected consignments may be carried out at
a designated area as may be determined by the respective Revenue
Authority
• Release is issued from destination Revenue Authorities
• Removal of goods from first point of entry.

Transit declaration only apply to goods originating from foreign countries

and destined to countries outside the EAC region. Movement of goods within
the EAC Partner states is referred to as “transfer of good”

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Customs

A regional Bond guarantee is applicable for goods declared for warehous-

ing, temporary importation, transit and on duty remission/ exemption. There’s
no bond guarantee for goods where taxes have been paid at destination.

The Customs Agent responsible for the clearance of the cargo shall super-
vise the physical examination of the goods. It’s possible to sell goods where
duties and taxes have been paid in another Partner State other than the
destination country subject to approval from the Commissioners of Customs
of the destination state and the state where the goods are to be sold.

21.8 Treatment of locally produced goods treated under the SCT

Goods produced in the region are not subjected to import duty when trans-
ferred to another Partner State if they meet the EAC rules of origin criteria.
However, these goods shall be subjected to domestic taxes which must be
paid before the goods move from the country of origin to the destination
Partner State.
How is the SCT addressing the problem of several weigh bridges along the
transit/transfer routes?
Partner States have reduced the number of weigh bridges.
• Northern Corridor: Cargo in transit/transfer is weighed once
• Central corridor: Cargo in transit/transfer is weighed at 7 weigh
bridges from 23.
• Implementation of the use of weigh in motion weigh
bridges where trucks conforming to the required weights do not stop

21.9 Responsibility if the bonded cargo does not reach its intended
destination
The clearing agent executes a regional Bond Guarantee for Bonded Cargo
and is therefore responsible for ensuring that it reaches the final destination.

21.10 Responsibility for the security of goods along the corridors

Whereas the Partner States provide security, the responsibility of securing the
goods lies with the customs clearing agent, the transporter and the owner.

21.11 How Other Government Agencies (OGAs) of the destination

Partner state are involved in the clearing process
Some Government agencies have positioned their staff at the first points of
entry and/or developed working relationships with the relevant OGAs in the
Partner state of the first point of Entry.

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 Customs

21.12 Cargo Manifest (C2)

It is a cargo movement document issued by the partner state where the
goods are originating from. It is sometimes referred to as a “cargo manifest.”

21.13 Container Freight Stations

These are extensions of the port which are licensed by the Commissioner
of Customs for the purpose of storage and clearance of goods and to ease
congestion at the port.
21.14 Clearance of containerized Motor vehicles handled under SCT
All containerized Motor Vehicles are cleared under the warehousing Regime
(WT8). They are consigned to a general goods Bonds and NOT a Motor
Vehicle Bond.

21.15 Clearance of re-exports to Partner States under SCT

A step by step process
i. Agent (on behalf of the consignee) presents the purchase docu-
ments/sales contract and a copy of the IM7 to the bond officer.
ii. Bond officer generates a manifest with as per the documents pre-
sented by agent.
iii. Bond officer issues the manifest to the clearing agent to enable
capturing of an SCT declaration in the country of destination.
iv. The agent includes manifest number in SCT declaration that is gen-
erated in the destination country system.
v. SCT declaration is released in the destination country and transmitted
into URA ASYCUDA system
vi. Bond officer accesses the declarations, confirms the declaration and
uploads a Verification Account.
vii. Bond officer generates a cargo movement document (C2) and issues
it to agent.
viii. Cargo is flagged off
ix. Customs officer at the border ‘exits’ the consignment upon arrival
at the Exit Border.

21.16 Importation of Motor Vehicle Units alongside some goods

The agent is required capture two (2) separate Entries; one for the Motor
Vehicle Unit – this may be a warehousing Entry (WT8) or an IM4 (Payment
of Taxes), and another one (IM4) for the goods. Both Entries should be
inspected accordingly.

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Customs

21.17 Clearance of exempted goods treated under SCT

All Exempted goods are cleared under the Warehousing Regime (WT8.) The
goods are secured under an RCTG bond, and an exemption entry processed
on arrival at destination partner state.

21.18 Clearance procedures in case of eventualities such as accidents,

thefts and fire
The following is the procedure;
• Obtain incident report and Scene of Crime from Police Authorities, Reve-
nue Authority of the state where incident happened, nearest URA office
and any other related evidence e.g. Pictures of the Scene etc.
• Obtain a Taxes demand note from state/country of incident
• Submit Report/ Refund Claim (for IM4s) to Assistant Commissioner En-
forcement for further investigations and processing.

21.19 Stripping/ de stuffing of containers

This simply means
It is possible for goods imported through the Port of Mombasa Port to be
de-stuffed. A client is required to seek formal approval from the Manager
Mombasa URA and Manager Enforcement KRA before such an Entry is cap-
tured. The approval letter is attached on the Entry. The Goods are captured
as Bulk goods and processed as such.

Note: If Ugandan destined goods arrive at the ports and are not entered
for Customs Clearance, the goods not declared within 21 days are liable for
auction (refer to ECMCMA)

21.20 Clearance of groupage or consolidated cargo handled under SCT

All groupage cargo is cleared under the Warehousing regime (WT8) as de-
clared on the master Bill of Lading. Deconsolidation/ breaking bulk shall be
done when goods arrive at destination partner state.

21.21 Handling a Bill of Lading with several units/containers destined to

different bonds
The Bill of Lading will be cleared on one entry i.e. total write off of bill of
lading (apart from bulk consignments like wheat, fuel, CPO etc where part
clearance can be done) and thereafter, a bond to bond effected at arrival at
the bond of destination respectively.

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21.22 Clearance of Motorcycles through a Ware housing Regime (WT8)

The Regional Customs Transit Guarantee Bond that is used to secure ware-
housed Goods (WT8) that are on transit within the COMESA and the EAC
Regions. The RCTG is housed and managed in The RCTG MIS system by the
COMESA RCTG Technical team

21.23 Retiring the RCTG bond

The RCTG Bond is retired at assessment of subsequent IM7 or IM4.One cannot

use an RCTG bond number for another declarant in the declaration. (WT8).
These are configured in the system and tagged to the respective declarant’s
TIN.

The declarant must monitor the performance of their RCTG accounts. E.g.
bond balances, active carnets etc. the declarant can acquire rights in the MIS
system from COMESA RCTG technical team.

22.022.0
| Automated
Automated System
System forfor Customs
Customs Data(ASYCUDA)
Data (ASYCUDA)

ASYCUDA World is an online system used for processing transactions of all

goods imported or exported out of the country. The system allows self-dec-
laration, assessment and payment of taxes by the importer/exporter.
It also allows users to process customs declarations from anywhere around
the world. It is also possible to attach and submit commercial documents.

22.1 Accessing ASYCUDA World

Any internet web browser such as Internet Explorer, Google Chrome can ac-
cess ASYCUDA World, on the Customs website at http://asyworld.ura.go.ug
and it can also be accessed through the single window page as http://sin-
glewindow.go.ug/uesw/Downloads
The computer should have a memory (RAM) of at least 4GB and above,
processor of 1.6 GZ, Java8 version 202. One may need any type of printer
and a document scanner for scanning all commercial documents to attach
to the declaration.
There is need for an Adobe Reader for reading documents in PDF format.
ASYCUDA World application doesn’t need to be installed on your computer;
you access it through the internet. A user logs in at once and is able to access
all modules attached to his/her customer account.

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22.2 Authorization

The persons are authorized to use the system include Licensed Clearing
Agents, Bond Keepers, Customs Officers, Cargo Handlers, and Importers/
Exporters. However, in order to access, all users have to complete a user
rights application form which is downloaded from the home page of the
custom’s help tool site. The user rights application form has to be signed by
the company Chief Executive Officers and approved by the Customs Station
Managers. The form as earlier indicated can be accesses on the link provided.
All these forms can be submitted to the customs system and procedure
section through the help tool which is help.ura.go.ug
Login if you already have an account, if not then you will be required to cre-
ate one. Select the right classification as; Creation of user Rights. The forms
shall be received by the client support unit that creates the access rights in
the system.
All parties involved in the international trade chain have to abide by law
(East African Community Customs Management Act) and all the necessary
laws application
22.3 Registration to get user rights

• To get the form for user rights, the client downloads them from the
home page of the customs help-tool.
• Click on the link for forms,
• Click on the URA external user rights Access forms or internal user
rights access forms.
• Fill in the relevant information.
• The forms should be signed and have a company stamp or a seal.
• They should be submitted through the customs help tool under the
classification as; Creation of user Rights.
For the external stakeholders, it can be downloaded from the Single Window
Portal on this link https://help.ura.go.ug/downloads/uraexternal_userrights.
pdf
22.4 Logging into Asycuda World involves the following

Go to the website address – http://asyworld.ura.go.ug and login using your

user name and password. You may fail to log in if you have;
a) Supplied a wrong password
b) Misspelt your password
c) May be using uppercase instead of lowercase or vice versa

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A password is important because it unlocks the system for you as autho-

rized user. It is similar to your ATM passcode that you use to withdraw or
deposit money in your bank account. It should be known and used by ONLY
you!! The system uses the password for identifying authorized users to access
the system. A password acts like an access card when combined with your
user name. A password in ASYCUDA WORLD expires after about 90 days.

Passwords must never be shared in ASYCUDA World. In the event that you
shared and you discovered that you did, the URA may institute criminal
charges against you and or your company’s operations may be suspended
among others.

22.5 Declarations in Asycuda World

You need the services of a clearing agent to clear any goods in ASYCUDA
World on your behalf. A list of such agents is available on the URA web portal;
http://ura.go.ug and is updated periodically.
• The importer shall log into his portal account then click on customs
Agent appointment, then customs clearing agent,
• You can appoint, view or deactivate agents.
Please note; the importer can appoint any number of clearing firm
but only 3 can be active at a particular time.
• After the importer has appointed the clearing firm, the firm shall
confirm the appointment either by accepting or rejecting the appointment

• The agent logs into ASYCUDA World, captures declaration, validate

and assesses it, and the importer/exporter pays their taxes without giving
the money to the agents to pay on their behalf. In fact it is advisable that
the importer does the payment (himself/herself) in the bank against the
generated PRN
• A declaration is rendered submitted after assessment, with or with-
out payment required. This is why after assessment the agent cannot do
any amendment on the declaration assessed and if the payment is not made
within the specified period the importer TIN is suspended in the system. Any
amendment of the information provided on the declaration after assessment
is made by customs.
Before assessment, all the necessary documents shall be scanned and at-
tached to the declaration. Such scanned documents should not be greater
than 500 kilobytes (KBs) in size.

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Customs

You may need to come to URA if customs require you to provide additional
information to complete a customs clearance such as physical examination
of goods. However, it is envisaged that the declarants may not need to come
to Customs offices since documents can be scanned and submitted from
wherever one is using the internet.

No declaration shall be processed by customs if the payment is required and

no payment has been done.

22.6 Tracking a customs declaration

There is a query module in the system where an officer will query the entry/
declaration and the agent shall reply any query or inquiry made on the entry
lodged within the ASYCUDA system.
Importers and clearing agents may also send inquiries on customs clearances
through the customs help-tool and select the right classification. Entry status
can also be viewed on the help tool by a particular importer.

23.0 Customs Trade Facilitation Initiatives

23.0 | Customs Trade Facilitation Initiatives
23.1 Security and Facilitation in a global Environment (SAFE)

SAFE is a World Customs Organisation (WCO) standard frame work

document developed by the WCO member countries represented by their
heads of Revenue administrations at its headquarters in Brussels in 2005
with major objectives of enhancing trade facilitation and promoting supply
chain security. The SAFE has got three major pillars;

a) Customs-to-Customs network arrangements

This emphasizes the need for customs administrations globally to build closer
working relationships to enable
• Customs receive advance cargo information and proceed with pre arrival
clearance of the cargo, thereby saving the clients’ time.
• Harmonization of Customs procedures with other authorities that reduces
cost of doing business
• Ease exchange information on risky cargo which poses a security threat
to society among the different customs authorities

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 Customs

b) Customs-to Business Partnerships

The second pillar, is where the Authorized Economic Operator Scheme (AEO)
is derived from. Each Customs administration establishes partnership with
the private sector in order to involve it in ensuring the safety and security of
the international trade supply chain. These receive tangible benefits in such
partnerships in the form of expedited processing and other measures.

c) Customs-to-Other Government Agencies co-operation.

There are many governmental agencies which cooperate with Customs in the
area of supply chain security. This is where we have the Coordinated Border
Management and Electronic Single Window Compendiums that impact on
and guide cooperation between Customs and
Other Government Agencies and Inter-Government Agencies.
All these standards are geared towards enhancing trade facilitation and pro-
moting supply chain security.

23.2 AEO as a trade facilitation tool

Authorized Economic Operator program is a trade facilitation initiative derived
from the World Customs Organization Safe Framework of Standards which
Uganda Revenue Authority Customs Department implemented in a bid to
facilitate trade and promote security of the international trade supply chain.

Uganda Customs therefore seeks to build mutual partnership with businesses

that consistently strive to comply with Customs Laws and regulations and
in return, such businesses will benefit from the Customs preferential treat-
ments and simplified procedures in the clearance process proposed under
the AEO Program.

23.2.1 Defining who an AEO is

An AEO is an individual, a business entity or a government department that

is involved in international trade and is duly authorized by the Commissioner
of Customs of Uganda Revenue Authority. Prospective clients include
• Manufacturers (who are involved in export and import)
• Customs clearing agents
• Bonded ware house keepers
• Importers and Exporters
• Transporters and Freight forwarders

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Customs

23.2.2 Objectives of the Uganda AEO scheme

• Enhance international trade facilitation by promoting and rewarding

good business practices
• Promote Customs to business partnership
• Promote Customs to Customs partnerships
• Promote government inter-Agency (Customs to government Agency
partnerships)
• Promote security of international trade supply chain
• Promote voluntary compliance to customs laws and procedures
among our clients

23.2.3 Eligibility criteria for becoming an AEO

Customs has developed eligibility criteria, in this criteria is a MUST do list

that an intending individual/business should qualify for or is willing to attain
in order to be authorized by the Commissioner of Customs.
i. The individual/business must be involved in international trade
ii. Be able to install and use the customs automated system e.g.
Asycuda, e-tax.
iii. Must have a good compliance history with Uganda Revenue Authority
of at least three years.
iv. Must be financially sound\should not have filed for bankruptcy in the
past
v. Must have implemented the AEO compliance program.

23.2.4 Step by step process of attaining an AEO status

Step 1: Expression of Interest in writing to the Commissioner Customs
Department
Step 2: Preliminary consultation with Customs AEO Team: Interested parties
are provided with information about the AEO Program
Step 3: Application; a prescribed form is submitted to Customs with the
relevant supporting documents
Step 4: Vetting of Applicant; Customs vets the application and all the
supporting documents to confirm whether the Applicant is eligible
Step 5: On-site Inspection; Customs conducts inspection of the Applicants
premises to confirm the information provided in application form and
supporting documents
Step 6: Authorization; upon satisfying all the requirements the applicant is
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approved
152 as a Customs Authorized Economic Operator by the Commissioner
Customs
 Customs

23.2.5 Immediate benefits of the AEO Program to Business

i. Pre-arrival clearance of cargo; i.e. the importer or exporter can

process the documents for their cargo with customs prior to the arrival of
cargo at the customs area/port.
ii. Reduction in average clearance time observed so far: Clearance Time
reduction from Mombasa to Kampala from 18days to 4Hrs & Average OSBP
Border Clearance 30minutes from 4hours
iii. Priority treatment at all times while dealing with Customs. Customs
will fast track the process of cargo clearance for the AEO clients, giving them
priority over others.
iv. Choice of place of physical examination in case there is need to
perform physical examination on cargo. The AEO client will have the
opportunity to select any convenient place for the examination of their cargo
should their cargo be selected for examination to avoid multiple loadings &
offloadinds which helps him save the cost.
v. Automatic renewal of Customs Licences like Agency and Bonded
Warehouse licencesOperator-management of Customs Bonded Ware
vi. Withholding Tax exemption
vii. Priority to participate in URA activities
viii. Secured parking space at the URA Tower
ix. AEO national working Group, an advocacy team for better
management of the Program
23.2.6 Long term benefits to the business;

i. Reduction in the Cost of doing business.

ii. Enhanced reputation and image.
iii. Increased business turnover.
iv. Improved quality of service.
v. Trustworthy and compliant business.
vi. Improved Internal Control Systems.
vii. Mutual Recognition.

23.2.7 The Regional AEO program (EAC Region)

At the Regional level, the Customs Administrations in the East African
Community adopted the Authorized Economic Operator (AEO) Policy
Framework that aims at increasing Revenue performance through facilitating
trade, strengthening the customs to business partnership as well as securing
the regional and ultimately, global supply chain.
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Customs

The regional AEO program therefore runs alongside the national program.
An applicant to the regional AEO is expected to be familiar with the AEO
Program after having participated as a National AEO Operator.

23.2.8 Carrying out business outside Uganda as a Ugandan AEO

There is an arrangement under the AEO Program called Mutual Recognition

Arrangement, aimed at extending recognition of the AEO status to countries
with whom we have signed the Arrangement.
, it involves a country’s government, formally recognizing the AEO Program
of another country’s Program and thereby granting benefits to the AEOs of
that country.

This can be at a bilateral, or multilateral arrangements. For this to happen;

• The AEO programs in both countries should be consistent with the
WCO SAFE Framework of standards.Standards are applied in a uniform
manner so that one Customs administration may have confidence in the
authorization of another country.

23.2.9 Trade facilitation benefits to the regional AEO operators

The AEO shall be allowed under the EAC Regional Authorized Economic
Operator Program to enjoy the following benefits;

Importers/Exporters/Manufacturers
• Expedited processing of entries/declarations – AEO declarations will
be given priority throughout the whole clearance process. This will include;
o Automatic passing of declaration.
o Once all conditions for lodgment of a declaration are fulfilled by the
AEO, the declaration shall be lodged and thereafter system released.
• No physical or document examination except for random or risk based
interventions/exceptional cases. Where the AEO declaration is randomly
selected to the red or yellow lane, priority treatment shall be given during
examination. The AEO shall also have the option to choose the location for
the physical examination.
• Expedited payment of refund claim.
o Priority shall be given in processing of the refund claims. Where
applicable, some procedures will be simplified for the AEO.
• Reduced Customs security wherever applicable
o Subject to relevant provisions of law/regulations, consideration for a
lower Customs Security on a case-to-case basis will be granted to the AEO.

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 Customs

Customs Agents
• Guaranteed renewal of Customs agent’s license
• The renewal of the AEO Customs Agent’s license shall not be subject
to the vetting process but the AEO shall be required to make payment
for licensing fees and any other related payments.
• Priority to participate in Customs initiatives
• The AEO will be given first opportunity to take part in new trade
facilitation initiatives within EAC Revenue Authorities.
• Priority treatment in cargo clearance chain
• Any consignment declared by the AEO Customs Agent will be processed
before the non-AEO declarations.
• Waiver of movement bond for AEO
• The AEO’s goods in transit to the warehouses will be exempted from
movement bond requirements. This will only apply to consignments
where the Importer/Exporter, Customs Agents, and the transporter are
ALL AEOs.

Transporters
• Guaranteed renewal of transit goods license and any other licenses
issued by Customs: The renewal of licenses issued by Customs will not be
subject to the vetting process but the AEO shall be required to make payment
for licensing fees and any other related payments.
• Exemption from the mandatory use of Customs Electronic Cargo
Tracking System (ECTS): In cases where the ECTS is required, the AEO will
enjoy the benefit of optional use of ECTS.
• Priority clearance at the borders: Consignments transported by the
AEO will enjoy expedited border processes.
Warehouse Operators
• Self-management of bonded warehouse: The AEO will be granted
the privileged to self-manage his/her bonded warehouse. Self-managed
Bonded Warehouse is a facility extended to a warehousing Operator where the
responsibilities of a Customs Officer are delegated to the Bonded Warehouse
Operator. The Warehouse Operator is required to adhere to the provisions of
the law and any other conditions that may be given by the Commissioner. This
enhances flexibility of Bonded Warehouse Operations in terms of time and cost.
• Guaranteed renewal of AEO Warehouse Operator’s license: An AEO
shall not be subject to the vetting process but the AEO shall be required to
make payment for licensing fees and any other related payments.
• Reduced Customs security wherever applicable: Subject to relevant
provisions of law/regulations, consideration for a lower Customs security on a
case-to-case basis will be for an AEO.
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Customs

23.2.10 Treatment of AEOs under special circumstances

23.2.11 Verification of AEO consignments

All AEO importers are blue lane companies which means risks are addressed
through post importation audit, examination can only be made on a risk-
based assessment.

In the event that system challenges arise, the Manager, Supervisors and Sta-
tion heads always ensure that AEOs are given priority.

23.2.12 AEO Agent clearing non AEO client

The AEO agent is given priority treatment, the transaction will none the less
go through normal procedures as required.

23.2.13 AEO client cleared by non AEO agent

The AEO client gets all the benefits enjoyed by an AEO

23.2.14 Outstanding/ audit queries on AEO transactions

In case of AEO outstanding transactions/audit queries, the supervisor AEO
center and customs audit division contact the AEO to give him/her an op-
portunity to explain the case and resolve the issue. In the event that there’s
information that points to noncompliance with AEOs, this is immediately
brought to the attention of the Assistant Commissioner Customs audit.

23.3 Regional Electronic Cargo Tracking System (RECTS)

With the support of Department for International Development (DFID)
through Trademark East Africa (TMEA) the three EAC countries Kenya, Ugan-
da and Rwanda were able to implement a Regional Electronic Cargo Tracking
System that provides 24x7 real time monitoring of transit goods.

The system which is premised on GPS technology offers real time location
of a truck on which an electronic seal is attached and an alert is triggered
in-case of tampering or diversion of such a truck.

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RECTS aims at;

i. Having a harmonized regional e-monitoring that eases tracking of transit
cargo and is done in the different Central Monitoring Centers
(Kampala, Kigali, Nairobi and DRC) thereby facilitating a single view of
cargo tracking along the corridor.
ii. Protecting government revenue through minimizing diversion of Transit
Cargo.
iii. Enhancing transit information exchange among the user EAC countries.
iv. Eliminating Non-Tariff Barriers (NTBs), in order to reduce transit times
(border scenario) and reduce the cost of doing business.
v. Align the ECTS with the Single Customs Territory and the Regional
Customs Transit Guarantee (RCTG) Bond. (One declaration, one bond,
one tracking system).
vi. Reduced clearance times given the seamless flow of transit cargo and
cost of doing business
vii. Enhanced Cargo security since system provides real time detection of
transit violations and rapid response teams are on standby to counteract
any violation.
viii. Monitoring Truck driver compliance with COVID 19 SOPs through The
Regional Electronic Cargo Tracking integration with the Diver System
(RECTDS).

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Customs

23.3.1 How RECTS works

• The system uses GPS/GPRS technology, an effective tracking technology
• Targeted units, box body trucks, tankers and containers ferrying transit
goods under URA’s control are fitted with a tracking device which sends
the seal status, truck location and any violation information to URA on
real time basis
• Once the seal is activated, cargo is monitored from start to destination
• The truck is expected to move along gazette geo-fenced routes
• Everything that happens to the cargo is recorded and reported simul-
taneously with every incident being time stamped together with the
location of occurrence
• Any violation including movement outside the geo- fenced route or tam-
pering with the seal is detected and reported immediately to the Central
Monitoring Centre (CMC)
• Alerts are sent both via e-mail and SMS to pre-defined persons
• The Rapid Response Unit (RRU) deployed at strategic points reacts to
alerts as directed by the CMC
• Truck driver equipped with smart phones, installed with RECTDS which
comprises of their encrypted COVID 19 health status (COVID 19 Test
Certificates) are monitored during the transit movement.

23.3.2 Benefits of RECTS

To the private sector
• There is reduced cost of doing business.
• Currently we are tracking 25% of National cargo in Transit and 75% of
maritime cargo. 100% of exports to Kenya are all e-tracked.
• Transit time has reduced from 7to 2 days for National transits and 14 to
5 days regional Transits. Real time monitoring has left no room for time
wastage on transit routes.
• Delayed departure results into accumulation of demurrage
• Real-time monitoring of transit cargo.
• Safe and secure arrival of the goods to their destination
• The transporters, clearing and freight forwarders have an opportunity to
efficiently monitor their respective businesses in the logistics supply chain
• The clearing agents are saved the burden of suspension due to transit
diversion
• Better negotiation grounds for discount on insurance costs

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 Customs

To transporters
• Ability to see the location of their trucks all the time using their mobile
devices
• ECTS provides a system report as evidence of arrival at destination
• Transporters can monitor the effectiveness of their drivers i.e. speed,
location of parking, diversion from agreed routes
• Reduced costs i.e. fuel, facilitation for drivers
• Increased turnover due to reduced customs physical controls, hence
more income
• Reduced tear and wear and increased life span of the truck due to full
time monitoring
• Transporters are able to bill their clients more accurately
• Improved customer service
• Ability to manage and communicate with your fleet via mobile device
and receive exceptional alerts when the consignee is away from office
• Insurance discounts due to the enhanced confidence from an assured
business tracking system
• Theft recovery; minute by minute tracking helps to identify the exact
location of one’s vehicle which enhances theft recovery

To Manufacturers
• Fair terms of trade due to system efficiency
• Monitoring goods in their warehouses
• Reduced costs i.e. on escort charges, fuel, facilitation for drivers
• Increased turnover due to reduced customs physical controls, hence
more income
• A manufacturer is able to bill his/ her clients more accurately
• Ability to monitor the location of their goods all the time
• Provide system report as evidence of arrival at destination
• Theft recovery; minute by minute tracking helps to identify the exact
location of your goods hence enhancing theft recovery
23.3.3 Obligations of each party in the RECTS functionality
Transporters:
• Fulfil the terms and conditions for trucks licensed to carry goods in Transit
• Pay the Transit Goods License as required by the EACCMA 2004
• Supervise drivers to ensure compliance with the transit rules and
regulations

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Customs

Drivers
• Provide accurate information in form of preceding transaction
clearance documents
• Submit the correct personal mobile contacts for ease of contact
• Keep within the gazetted transit routes while conveying transit goods
• Report any transit incidences to the nearest Customs station on time
• Respond to inquiries and queries paused by Customs in the course
of movement

Clearing agents:
• Execute a transit Bond with the Insurance companies
• Prepare accurate transit declarations (IM8), and attach all the
necessary accompanying documents
• Account for all the outstanding transit transactions within the
schedule

Customs
• Monitor the movement of goods in Transit to avert possible diversion.
This is done through:
• Generation of the Transit document (T1)
• Respond to transit incidences (e.g. seal breakage and cargo diversion
among others
• Facilitate transit related activities like transshipments and change of
destinations
• Respond to Transit Alerts generated in the course of Transit, and
• System validation of arrival at the destination station

23.4 Uganda Electronic Single Window (UESW)

The UESW provides a platform on which all parties involved in trade and
transport can lodge standardized information and documents at a single point
to fulfill all import, export, and transit -related regulatory requirements. The
System is built on ASYCUDA World platform and shall be used by majority of
the government agencies and clients to perform international trade related
transactions

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 Customs

The Vision:
To be leading single access platform for international trade facilitation

The Mission:
To provide transparent, efficient, integrated electronic environment that will
reduce the cost of doing business and increase trade competitiveness

23.4.1 Reasons for implementing the Electronic Single Window

To develop and implement the UESW system that is fully automated and web
based in order to facilitate trade through;
• Efficiency; streamlined procedures that are cost effective
• Transparency; i.e. accurate, reliable and timely information online
• Competitiveness; through improved conditions of doing business,
capacity building and use of technology
23.4.2 Why Government of Uganda embarked on the National Electronic
Single Window project

• Establishing a system to allow importers and exporters submit trade

related information electronically to fulfil import, export and transit reg-
ulatory requirements
• Enabling users to track the progress in respect to processing
• Regulatory agencies can also inform traders and their representatives of
the progress of the transactions

23.4.3 Expected benefits/outcomes

• 30% reduction in transaction costs for the private sector at URA, NDA,
UNBS, UCDA, MAAIF, MEMD and UEPB including demurrage, adminis-
trative costs and improved service delivery
• 30% reduction in the average trade document processing time (days) at
the above institutions;
• 30% reduction in number of documents (physical paper) required for
clearance of exports, imports and transit through the elimination of du-
plicate processes especially by regulators; and
• A fully operational NESW system designed and operational at all major
public and private sector trade regulatory institutions.

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Customs

23.4.4 Impact of Single Window on agency business processes

• The development of UESW system has automated 22 out of 30 border
intervening agencies and economic operators who are now able to
issue permits and certificates electronically.
• Improved collaboration between government agencies
• Platform is a catalyst for e-government given the targeted scope of
the 30 MDAs.
• Upgrading of the Customs ASYCUDA World system
• Development of the Single Transaction Portal (STP) that includes
bringing together all traders applications usually done by different agencies
e-portals in to a single portal through which all traders will only transact with.
• Standardized forms for all agencies and system linkages
• Streamlined processes and One stop shop for trade and clearance
information
• Real time communication and follow up transactions between
agencies
• The system enables agencies build strong risk management systems to
monitor –accurate information, the compliance history and analyze risk. They
are able to focus on real risk (for examination), target efficiently (document
check), accelerate checks, and improve post audit
• Linked agency systems to ease the clearance process
• Integrate same data in both systems, to be used for different purposes
• Reduction of clearance time and costs of doing business
• Transparency in the supply chain, Increased revenues
• High turnover due to ease of import, transit and export clearance
procedures
• UESW implementation has resulted in to improved cross border trade,
clearance time, reduced cost of doing business, increase in revenue and
provision of accurate and timely statistics have been noticed. I.e.

o Clearance time for imports has reduced from an average of 14 days to

4 days for selected institutions and under 2 days for exports and inspection
results and quality certificates can now be shared electronically by agencies
such as the UNBS & NDA to facilitate fast clearance.
o Before the implementation of UESW system in 2015, trading across
Border index was 161 whereas it has improved to 119 in 2019. The World Bank
Doing business quoted some achievements made by UESW implementation
as best practice
o Uganda Coffee Development Authority, one of the agencies on the
Single Window system reported estimated cost savings of 1.53 billion on

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 Customs

transport of 15,333 containers annually as a result of coffee exporters fulfilling

clearance requirements online, freight forwarders have reported average savings
on stationery of UGX. 50m annually
o The electronic sharing of preferential certificates of origin information
with Rwanda eliminated charges saving clients over $85,966 business
documentation costs in 2018.

23.4.5 Agencies involved:

Development of interfaces with the different agencies. These include,
1) Lead Coordinating Institution: Ministry of Trade Industry and
Cooperatives
2) Lead Agency: Uganda Revenue Authority
i. Ministry of Energy and Mineral development, (Fuel marking by Global
Fluids International, a company contracted by the ministry to carry out fuel
marking for all fuel imports into the country), Payment interface has been
finalized and now fully developed.
ii. Uganda National Chamber of Commerce (Issuance of Non-Preferential
Certificates of Origin)
iii. Uganda Revenue Authority (Issuance of Preferential Certificate of Origin,
automated Customs agent licensing, Bonded warehouse license module
iv. Ministry of Trade, Industry and Corporative (licensing of tobacco
exporters)
v. Uganda National Bureau of Standards (Sending Goods Inspection
requests and Receiving Inspection results)
vi. Ministry of Agriculture Animal Industry and Fisheries (Sending of Import
and Exports Inspection requests and receiving inspection results for Fisheries,
Animal and Crop Protection departments)
vii. National Drugs Authority (Sending NDA inspection requests and
receiving inspection results)
viii. Uganda Coffee Development Authority (issuance of coffee export
Certificates
ix. Ministry of Foreign Affairs
x. Ministry of Trade, Industry and Cooperatives
xi. Dairy Development Authority
xii. Uganda Free Zones Authority
xiii. Warehouse Operators
xiv. Clearing Agencies
xv. Transporters
xvi. Airlines
xvii. Uganda Communications Commission
xviii. Ministry of Water and Environment (Timber)
A Guide to Taxation in Uganda | Fourth Edition 163
xix. Atomic Energy Council
Customs

23.4.6 Reasons for implementing the Electronic Single Window

• To develop and implement the UESW system that is fully automated and
web based in order to facilitate trade through;
• Efficiency; streamlined procedures that are cost effective
• Transparency; i.e. accurate, reliable and timely information online
• Competitiveness; through improved conditions of doing business, ca-
pacity building and use of technology

23.4.7 Why Government of Uganda embarked on the National Electronic

Single Window project

• Establishing a system to allow importers and exporters submit trade

related information electronically to fulfil import, export and transit reg-
ulatory requirements
• Enabling users to track the progress in respect to processing
• Regulatory agencies can also inform traders and their representatives of
the progress of the transactions

23.4.8 Expected benefits/outcomes

• 0% reduction in transaction costs for the private sector at URA, NDA,

3
UNBS, UCDA, MAAIF, MEMD and UEPB including demurrage, adminis-
trative costs and improved service delivery
• 0% reduction in the average trade document processing time (days) at
3
the above institutions;
• 0% reduction in number of documents (physical paper) required for
3
clearance of exports, imports and transit through the elimination of du-
plicate processes especially by regulators; and
• fully operational NESW system designed and operational at all major
A
public and private sector trade regulatory institutions.

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 Customs

23.5 The Document Processing Centre (DPC)

Uganda Revenue Authority, Customs Department reengineered the Cus-
toms Clearance procedures by implementing a Centralized Document
Processing Centre (DPC) on the 25th of November, 2016 with an aim of
achieving the following:

23.5.1 Objectives

1. Shorten customs declaration processing time by;

• Receiving declarations online and processing them relying
on the scanned attached documents
• Dedicating a team of all round experienced customs staff
to man the DPC
• Isolating the DPC team from distractions/disruptions and
to create a highly productive environment
2. Improve management control over the declaration processing
function by ensuring that headquarter functions such as tariff, valuation,
enforcement, National Targeting Centre and others, monitor the process and
intervene in real time.
3. Enhance transparency in the clearance process and reduce clearance
time.
4. Enhance electronic clearance communication regarding document
statuses via email or SMS, with the identities of the officials remaining anon-
ymous to the trader

23.5.2 Benefits of DPC implementation.

• Improved productivity
• Integrity Enhancement
• Improved professionalism
• Enhancement of specialization
• Improved control of declaration processing
• Easy Implementation of Standard Operating Procedures.

A Guide to Taxation in Uganda | Fourth Edition 165

Customs

PART D
Special Features of the Taxes
Administered by the URA

166 A Guide to Taxation in Uganda | Fourth Edition

Special Features of the Taxes Administered by the URA

A Guide to Taxation in Uganda | Fourth Edition 167

Special Features of the Taxes Administered by the URA

1.0 Special Features of the Taxes Administered by the URA

1.1 Payment of Tax

The law allows the Commissioner General to enforce the collection of tax that
has been assessed where the assessed person has refused or failed to comply.
In this case, the taxes may be collected using various methods, such as:

By Distress: Whereby goods on which the assessed person has a claim are
sold in order to recover tax

By Agency Notice: Whereby a person who has money or other liability of

the assessed person is required to pay the held amount directly to the URA

From Receiver: They recover debts from the taxpayer.

1.2 Regulations

The Minister responsible for Finance and in respect of customs taxes at the
EAC makes regulations for the better carrying out of the provisions of the
main Acts.
The regulations other than for customs are made by way of Statutory Instru-
ments, which include:

a) The VAT Regulations.

b) Distrait Rules.
c) Withholding Tax Regulations.

1.3 Rulings
1.3.1 Practice Notes

To achieve consistency in the administration of taxes and to provide guidance

to taxpayers and officers of the URA, the Commissioner may issue practice
notes setting out the Commissioner’s interpretation of the Income Tax Act
and Value Added Tax Act. However practice notes are not binding on the
taxpayers though binding on the Commissioner General until revoked.

1.3.2 Private Rulings

A taxpayer may apply in writing to the Commissioner seeking the Commis-

sioner’s position regarding the application of a taxation Act to a transaction
proposed entered into by a taxpayer. A taxpayer in this case is required to
make full disclosure of the circumstances of the transactions and to apply
it as stated.

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 Special Features of the Taxes Administered by the URA

A private ruling can then be made to the taxpayer on the facts disclosed.
However where there is any inconsistency between a practice note and a
private ruling, priority is given to the terms of the private ruling.

1.4 Remission of Tax

In some cases, tax cannot be recovered from a taxpayer by reason of:

i. Consideration of hardship.
ii. Impossibility, undue difficulty or excessive cost of recovery in such
cases.

However, this is subject to the Commissioner General’s opinion which is also

subject to the Minister’s approval.

1.5 Double Taxation Treaties

Uganda has treaties with some countries such as the United Kingdom,
Netherlands, South Africa, Denmark, Mauritius, India and Italy, which provide
different tax regimes from that in the Income Tax Act i.e. different tax regimes
from that in the Income Tax Act i.e. different tax rates for dividends, interest,
loyalties, technical and management fees, among others.

Note: It is important to observe that the terms treaty or international

agreement prevail over the provisions of the Income Tax Act.

A Guide to Taxation in Uganda | Fourth Edition 169

Uganda Revenue Authority
P.O. Box 7279 Kampala, Uganda
Telephone: (0417)443-150, 444-602/3
Email:info@ura.go.ug; services@ura.go.ug | https://ura.go.ug
Twitter@URAuganda| Facebook@URApage
URA TOLL FREE HELPLINE: 0800 117 000 | WhatsApp 0772 140000