Taxation in Uganda

VAT

Ugandan VAT is 18%

Payroll taxes

Benefits in Kind

Most non-money benefits given to an employee by an employer are added to their gross income for payroll tax purposes. There are a few exceptions that are tax free, the most noteworthy being:

• Meals and refreshments, provided they are offered to all employees equally
• Medical expenses
• Life insurance
• Employer’s contributions to a pension fund
• The first UGX10K a month of benefits

A leaflet from the Ugandan Revenue Authority giving more details can be found here.

National Social Security Fund (NSSF)

A 5% contribution is deducted from the employee’s gross salary and a 10% contribution is paid by the employer to the National Social Security Fund, a state-run pension fund. It is possible to opt out and to contribute instead to a fund approved by URBRA; this may be worth considering, as NSSF’s investment performance has allegedly been poor.

Customs Duties and VAT

Uganda is part of the East African Community Customs Union.

When goods are brought into the country, the following taxes are normally payable:

• Customs duty between 0% (for most high tech goods) and 25% (typical for low tech goods and motor vehicles)
• VAT at 18%. If you’re sending from the UK then this will often be on top of the 20% UK VAT that you already paid for the goods; there seems to be no way for private individuals to reclaim the UK VAT. See also Reclaiming VAT on Exports.
• Witholding tax at 6%. This is an advance payment of income tax; a Ugandan resident would normally reclaim it on their income tax return.

Whisper tried applying for an exemption from import duties as an NGO, without success; it is not normally granted. There is supposed to be a zero rate for importing “medical sundries” but we have not made it work yet; it may be that a customs agent could help.

Importing Motor Vehicles

Import duties on motor vehicles can be very high, particularly for vehicles over 8 years old which are also subject to a 50% environmental levy. The total tax for older vehicles can easily be more than the cost of the vehicle. There’s a Ugandan vehicle import tax calculator here. Ambulances are zero-rated for import duty and VAT but other taxes (environmental levy, witholding tax etc) will still be payable. Ugandan law now requires that vehicles must be under 15 years old when imported.

Double Taxation Treaties

The 1994 Uganda-United Kingdom Double Taxation Treaty allows residents of Uganda, subject to certain conditions, to perform work remotely for a UK organisation and to elect to have the income from that work taxed in the UK (or vice versa), without time limit.

Uganda has double taxation treaties with a few other countries: Norway, the Netherlands