Uganda's principal taxes are income tax, both personal and business, and value added tax (VAT). Compared to other sub-Saharan African nations, which collect, on average, about 23 percent of gross domestic product (GDP) in revenue, Uganda's taxes are low, consisting of 11.9 percent of GDP in the 2008-2009 fiscal year.
Personal Income Tax
Residents of Uganda are required to pay personal income tax on their worldwide income. Additionally, non-residents of Uganda whose income comes from sources in Uganda are required to pay the tax. For the purposes of the tax, people are considered residents of Uganda if they have a permanent home in the country, if they are a Ugandan employee or official posted abroad, if they are present in Uganda for 183 days out of the tax year or if they are present in Uganda for an average of 122 days per year for three consecutive years.
Business Income Tax
Uganda also levies income tax on the worldwide income of resident businesses. As with personal income taxes, non-resident companies are taxed only on income sourced in Uganda. The tax rate for all businesses other than mining companies is 30 percent. Income tax for mining companies is calculated using a formula and is dependent upon the chargeable income and gross revenue of the company, but the tax rate must be at least 25 percent and at most 45 percent.
Uganda has determined special tax rates for small businesses with annual sales between five million and fifty million Ugandan shillings. These special rates are determined based upon the gross income of the business.
Value Added Tax
Value added tax (VAT) is required on every taxable supply made by a taxable person, every imported good and the supply of any imported services by any person. Taxable supplies are goods or services made under the business activity of a taxable person. Taxable persons are people who make, or expect to make, taxable supplies valued at one-quarter of the annual registration threshold during three calendar months of the year. Taxable persons must register. As of July 2010, the annual registration threshold is fifty million Ugandan shillings. The standard rate for VAT in Uganda is 18 percent.
