Impact of some of the taxmeasures for 2012/13 BudgetTax Measure Objective Impact as of Dec2012Increase in PAYEthresholdReduce tax burden onlow earnersLoss of 32.05bnAdditional 10% forthose earning >120m annuallyCompensate for theabove30.78bn realizedReinstate VAT onsupply of waterTo generate 21.7bn(supply of water fordomestic useexempted)VAT on water forcommercial usehas so far yielded10.4bn
Impact of some of the taxmeasures for 2012/13 BudgetTax Measure Objective Impact as of Dec2012Excise duty onspirits made fromlocally made rawmaterials from45% to 60%To generate 10.4bn 4.53bn collected sofarExcise duty oncosmetics &perfumesTo generate 4.1bn 5.2bn collected sofar.
Accountants &business advisers2013/2014 Tax Proposals& their implications
Accountants &business advisersObjectivesto raise revenues;enhance transparency incollection and enforcement;improve compliance;encourage investment; andImprove tax administration.Note: Details of the proposals will be found in FinanceBill 2013
Accountants &business advisersIncome TaxWiden scope of WHT agents tocapture non-compliant taxpersons(expected to raise 5bn)Provide collaboration betweenURA, KCCA and LocalGovernments in tax collection.
Accountants &business advisersValue Added TaxHotel accommodationElimination of VAT exemption(Expected to raise Shs 6 billion)Supply of water for domestic useElimination of VAT exemption(Expected to raise Shs 8 billion)
Accountants &business advisersValue Added TaxWheat and wheat flour-Elimination of VAT exemption(Expected to raise Shs 30 billion)
Accountants &business advisers• Item Old rate New ratePetrol and diesel(Expected to raise Shs72 billion)Petrol – Shs 850Diesel – Shs 530Petrol – Shs 900Diesel – Shs 580Kerosene(Expected to raise Shs15 billion)NilRestoration ofexcise duty atShs 200 per litreUndenatured spirits(at importation)70% 140%Changes in Excise Duty rates
Accountants &business advisers• Item Old rate New rateCigarettes – soft cup(whose local content is morethan 70% of its constituents)Shs 22,000 Shs 32,000Cigarettes – other soft cup Shs 25,000 Shs 35,000Cigarettes – Hinge lid Shs 55,000 Shs 69,000Changes in Excise Duty rates
Accountants &business advisers• Item Old rate New ratePromotional activitiesakin to gambling(expected to raise Shs 8billion)- 20% onrevenueMoney transfers(mobile networkoperators and othermoney transferoperators)- 10% on feescharged ontransferChanges in Excise Duty rates
Accountants &business advisersChanges in Stamp dutyThird party insurance policies-An extra Shs 30,000 as stamp duty(Expected to raise Shs 12 billion)
Accountants &business advisers• Item Old rate New rateMotorcycleregistrationfees(expected toraise Shs 8.64billion)Shs 130,000 Shs 200,000Motor Vehicleregistrationfees(expected toraise Shs 8billion)Saloon cars – Shs1,000,000Non saloon cars –depends on tonnageIncreased byShs 200,000Changes in Fees and Licenses
Accountants &business advisersNon Tax RevenueInternational call Levy-To impose an international callslevy on international incoming calls(expected to raise Shs 43 billion)
Accountants &business advisersNon Tax RevenueNTR rates by MDAS-Revision of some NTR rates(expected to raise Shs 32 billion)
Accountants &business advisersTax AdministrationCollection of Non-TaxRevenuesMandating of URA to collect all fees andother charges under the Uganda RegistrationServices Bureau, The Directorate ofCitizenship and Immigration and the Ministryof Energy and Mineral Developmentcollection. However, the assessment willremain under the MDAs.
Accountants &business advisersTax AdministrationCollection of Non-TaxRevenues (ct’d)To encourage ministries, agencies &departments which collect NTR, some will beallowed to retain NTR & use it at source.
Accountants &business advisersTax AdministrationIn Financial Year 2013/14, Government willcomprehensively review the exemptions in theVAT Act and the Income Tax Act with the aimof eliminating them to increase revenue andimprove administration.In the coming financial year and over the nextthree years, URA will build on this progress toobtain significant increase in tax compliance.The Authority will;
Accountants &business advisersTax AdministrationIntensify its efforts to enforce compliance onthe different types of taxpayers i.e. large,medium and small.Continue expansion of the audit coverage toinclude the bulk of the largest traders andconduct joint audits in the domestic tax andcustoms departments to detect and sanctionnon-compliance and fraud in a number oftaxes.
Accountants &business advisersTax AdministrationEnforce the use of the Tax IdentificationNumber (TIN) for all traders who receivetrading and other licenses and permits fromKCCA and Local Governments.Clean up the VAT register to ensure that onlythose capable of filing monthly and payingremain on the register.
Accountants &business advisersTax AdministrationIn addition to the revenue targets that theMinistry sets for URA, the Ministry will put inplace a wider suite of performance indicatorsin tax and customs to help URA Managementmonitor the results of the modernizationprogram on a regular basis.
Accountants &business advisersTax AdministrationURA’s direct access to considerableinformation of a taxpayer. Government is topropose an amendment to the FinancialInstitutions Act to allow URA to access ataxpayer’s financial records, as an exceptionto the confidentiality provisions, where a bonafide tax audit or investigation has beeninitiated.
Accountants &business advisersConclusionThe journey continues……,Vision 2040 requires a “fundamentalchange”The tax proposals bythe Hon. Ministerare a step towardsthis change.“For God & my Country”