Tax Briefing notes; 2012/13 Uganda Budget analysis

Income Tax
Income derived from Treasury Bills & Bonds
Gov’t to increase the withholding tax on income derived from Treasury Bills and Bonds from 15% to 20% as a final tax. This measure will generate Shs.16.3bn.

PAYE Threshold
Government to increase the PAYE threshold from Shs.130,000/= to Shs.235,000/= per month and the tax bands will be adjusted accordingly.

Personal Incomes;
Government to introduce & charge an additional 10% be imposed on individuals with chargeable income of Shs.120 million and above, per year. The details are contained in the Income Tax
(Amendment Bill) 2012.

Value Added Tax (VAT)
Government has re-instated VAT on the supply of water at 18%. This measure will generate Shs.21.7bn.

Standard rating of biodegradable packaging materials
Government to reinstate VAT on the supply of biodegradable packaging materials which is currently exempt. This is to enable suppliers to claim input VAT related to their products produced. This measure will generate Shs 2.2 billion. The details are contained in the VAT Amendment Bill 2012.

Re-instating the VAT exemption on gambling, lottery services, increasing the Gaming & Pool Betting tax, but increase the Gaming and Pool Betting Tax from 15% to 20%. This measure will generate Shs.4.3bn.

Excise Duty
Increasing excise Duty on spirits
Government to increase excise duty on spirits made from locally made raw materials from 45% to 60%. As well as introduce a specific rate & an ad valorem duty rate on spirits of Shs.2, 000 per litre or 80 per cent, respectively, whichever is higher, as a means to control undervaluation. The measure will generate Shs.10.4 billion.

Imposing Excise Duty on cosmetics & perfumes
Government to impose excise duty on cosmetics & perfumes at a rate of 10% as a revenue measure. This measure will generate Shs.4.1bn.The details are contained in the Excise Tariff (Amendment) Bill 2012.

Non Tax Revenue; Other Fees & Charges
Government to vary various fees & charges for the provision of Government services, authorizations & permits so that they are commensurate with the cost of rendering the service. This measure will generate Shs.31.7bn.

Decisions made at EAC Pre-Budget Consultations by the Ministers of Finance
The First Sectoral Council of Finance & Economic Affairs considered Uganda’s Pre- Budget issues and the following decisions, among others, were made and the details will be contained in the East African Community (EAC) Gazette.

Duty Remission, exemption regimes and preferential trade schemes
The Sectoral Council of Finance and Economic Affairs recognized the need to take stock and make an analysis of the existing duty remission schemes within the region to ensure equity & uniform implementation of intra EAC trade regime.

Set Top Boxes for analogue digital and terrestrial transmission
To facilitate smooth transition from analogue to digital terrestrial transmission by use of Set Top Boxes (decoders), their import duty was reduced from 25 percent to 0 percent for a period of one year.

Food supplements & mineral premix used in fortification
Given that food supplements & mineral premix are essential in improving nutritional deficiencies, the import duty has been reduced from 25%to 0% for food supplements & mineral premix.

Vacuum packing bags
Import duty has been reduced from 25%to 10% on vacuum packing bags for one year to ease packaging by the manufacturers.

UMA management