Tax experts have commended President Yoweri Museveni for signing into law eight tax bills that are anticipated to establish a more progressive and equitable taxation regime in Uganda.
These measures are deemed pivotal as the country aims to achieve the ambitious revenue target of 27 trillion shillings set for the Uganda Revenue Authority.
Tax professionals believe that these newly assented tax bills will not only enhance tax revenue but also invigorate the private sector and strengthen the financial industry.
Ronald Amego, Senior Manager of Tax at Ernst and Young, emphasized that the recent presidential assent transforms the tax bills into full-fledged acts of parliament, paving the way for their gazetting and operationalization. Consequently, these acts will usher in modifications to the taxation landscape and affect business operations in the private sector.
Amego further elucidated the implications of the changes, particularly with the Income Tax Amendment Act, highlighting the adjustments made to the income tax procedures.
"Many of these Acts will increase tax revenue, strengthen the financial sector as well as breathe new life into the businesses of the private sector." He stated.
The tax procedures act of 2023 reflects a reconciliatory approach taken by the government towards the private sector, as pointed out by Amego. This conciliatory gesture was met with appreciation from various quarters within the business community.
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Isa Sekitto, a board member of the Private Sector Foundation Uganda (PSFU) and the spokesperson for the Kampala City Traders Association (KACITA), expressed enthusiasm for the amendments introduced in the Income Tax Amendment Act.
"The trading community welcomes the changes in the income tax amendment Act." Sekitto conveyed
However, the alterations in the taxation regime will also impact foreign exchange businesses. Notably, the capital requirements for operating foreign exchange businesses have been increased from 20 to 50 million shillings.
Despite this change, both Amego and Sekitto saw the value in it, as it aims to fortify the financial sector.
The Income Tax Amendment Bill (No.2) of 2023 encompasses provisions that facilitate the introduction of Islamic banking in Uganda. Concurrently, the Income Tax Amendment Bill addresses companies that are unable to declare losses for more than seven years. Amego elaborated that such stringent provisions, while present in countries like Tanzania and Kenya, could potentially deter investors.
Sekitto maintained that the private sector's challenges extend beyond taxation amendments. He emphasized the need for additional legislation, including the Competition Bill, Consumer Protection Bill, and Jurisprudence Bill, to rectify business practices within the trading community.
As Uganda aspires to achieve a revenue target of 27.73 trillion shillings set by the Uganda Revenue Authority, tax experts view these newly enacted laws as pivotal to achieving this objective. Additionally, these laws are seen as integral to establishing a more progressive and robust tax regime in the country.
