Stiffer measures for rental tax effective July 1st

In Summary

June 12—The Ministry of Finance and Economic Planning will soon start issuing estimates of rent tax […]

housesJune 12—The Ministry of Finance and Economic Planning will soon start issuing estimates of rent tax to be paid by landlords (and landladies) based on the rating of the rental property in a specific location.

Doris Akol, the Uganda Revenue Authority (URA) Commissioner General said during a budget review breakfast,  “A lot of landlords are not complying with the law and are declaring less tax returns than the actual amount that they are getting from rentals. This means that we are not getting as much as we expected from this sector.”

The new provisions come into force on July 1st, 2017. This is not the first time that URA has tried to impose a tax on rentals. One URA official told 256BN  that when the landlord/landlady collude with the tenant then it can become difficult to force compliance. This explains why returns from this area has been relatively poor.

“This new policy will see that people who own land in the same premises will have to pay the same amount of tax as determined by the Ministry in case we feel that they are not telling the truth about their earnings,” Akol said.

Irene Bashabe, the Assistant Commissioner, Domestic Services at URA asked tenants to always demand receipts from their landlords/landladies to help government determine the real income that is going to the property owners.

“When you pay rent, you are already paying tax. It’s unfair that the landlord, who is even overcharging you, has not paid their equal share. When taxes are paid, everyone benefits through service delivery. It is everyone’s responsibility to make sure that taxes are paid,” Bashabe said

However there were complaints from the public about the rental tax being similar to property tax that is being paid to Kampala Capital City Authority (KCCA). Critics said it is unfair because it feels like paying twice for the same property. URA officials promised to look into the issue together with KCCA.


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