Monday, May 25, 2020
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Gov’t To Tax Ugandans Selling Land Which Isn’t A Business Asset

Government is planning to tax Ugandans who sell land that isn’t a business asset.

This plan is contained in the five tax amendment bills that were tabled before Parliament by the Minister of Finance, Matia Kasaija, setting in motion the scrutiny of the 2020/2021 National budget.

The bills include; The Excise Duty Amendment Bill 2020, Value Added Tax Bill 2020, Income Tax Amendment Bill 2020, Stamp Duty Amendment Bill 2020 and Appropriation Bill 2020.

The Ministry of Finance in the  Income Tax Amendment Bill 2020 proposed to amend section 118B of principal Act by inserting a new clause stating; A resident person who purchases land, other than land which is a business asset, from a resident person shall withhold (tax) at a rate of 0.5% of the purchase price. This is subject to approval by Parliament.

There is also  a proposal to insert new clause in the Income Tax Amendment Bill to provide; Withholding of tax on commission paid to an  insurance agent, a proposal if approved by Parliament will require an insurance service provider, who makes a payment of a commission to an insurance agent shall withhold tax on the gross.

Additionally, there will be withholding tax paid on commission paid to an 

advertising agent with the proposal reading; A person who makes payment for a commission to an advertising agent shall withhold tax on the gross amount.

Further, Government will require all public transport operators including taxis, buses to present a tax clearance certificate from URA in order to qualify for renewal of their operating licenses.

The proposal in the Income Tax Amendment Bill 2020 states; A taxpayer who provides a passenger transport service or a freight transport service shall be required to obtain a tax clearance certificate from the Commissioner in accordance with section 43 of the Tax Procedure Act, 2014 before renewal of operational licenses.

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