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Uganda Budget 2021: Finance Minister tables 12 new tax proposals

Government to present a yearly permit charge for every single engine vehicle.

Kampala, Uganda – The Minister of Finance, Matia Kasaija has tabled before parliament 12 assessment related bills under which government proposes a few spending measures for the coming monetary year 2021/2022.

  1. Fish (Amend­ment) Bill, 2021
  2. In­come Tax (Amend­ment) Bill, 2021
  3. Min­ing (Amend­ment) Bill, 2021
  4. Stamp Duty (Amend­ment) Bill, 2021
  5. Tax Ap­peals Tri­bunal (Amend­ment) Bill, 2021
  6. To­bacco Con­trol (Amend­ment) Bill, 2021
  7. Traf­fic and Road Safety (Amend­ment) Bill, 2021
  8. Ad­min­is­tra­tion of es­tates (Small Es­tates) (Spe­cial Pro­vi­sions) Bill, 2019
  9. Hu­man Rights De­fend­er’s Pro­tec­tion Bill, 2020
  10. NA­TIONAL CLI­MATE CHANGE BILL, 2020
  11. The Lo­cal Gov­ern­ments (Amend­ment) Bill, 2020
  12. The Phys­i­cal Plan­ners’ Reg­is­tra­tion Bill, 2020

The assessment bills tabled by Kasaija incorporate the Excise Duty (Amendment) Bill, 2021, The Fish (Amendment) Bill, 2021, The External Trade (Amendment) Bill, 2021, The Income Tax (Amendment) Bill, 2021, The Mining (Amendment) Bill, 2021, The Stamp Duty (Amendment) Bill, 2021.

Speaker Rebecca Kadaga coordinated that Parliament’s Finance Committee considers the Bills speedily and reports back. Parliament hopes to finish the spending interaction for the 2021/2022 monetary year financial plan before the eleventh Parliament begins on twentieth May.

Annual Tax Under the Income Tax (Amendment) Bill, 2021, government suggests that landowners acquiring rental pay from more than one investment property represent the pay and costs on every property independently.

This proposition by government to force landowners and organizations with more than one property to announce the pay from every resource independently was in 2019 dismissed by Parliament.

The proposition was intended to get landowners who take cover behind making misfortunes to sidestep charges and the proposition implies that land owners would presently don’t have the option to balance misfortunes from one property utilizing the benefits of another. Through this duty change, government expected to gather 7 billion Shillings.

The Finance Committee report at that point tabled by the Chairperson Henry Musasizi dismissed the proposition saying that in any event, when the public authority proposition is expected to smooth out the assortment of rental expense and decrease income misfortune to government, it would build the consistence trouble on the land owners.

“It will be exorbitant and convoluted for organizations or partnerships like National Housing and Construction Company Ltd or National Social Security Fund who own few properties to document separate returns for every property,” read the Finance Committee report.

Francis Kamulegeya, the Senior Partner at PWC additionally then contended that the expense measure would misshape the tax assessment from organizations engaged with investment property by driving them to regard every property as though it is independent business.

At present, land masters or an organization summarizes all the monies procured from lease in various properties and once the rental pay doesn’t surpass Shillings 2.8 million limits in the wake of deducting the 20% reasonable costs, the property is absolved from charges.

In the interim, the Income Tax (Amendment) Bill, 2021 as per review firm-PricewaterhouseCoopers (PwC) likewise proposes to build the rental assessment rate for people from 20% to 30 percent like that of non-people and permit landowners to deduct 60% of rental pay as notional costs in computing chargeable pay.

Stamp Duty Also under the Bill, new makers with a speculation capital of at any rate US Dollars 50 million and existing producers with an extra venture of US Dollars 50 million will profit by the proposed Stamp Duty Amendment Bill, 2021.

PwC says that instruments like debentures, leases, move of land and others will have a NIL stamp obligation rate.

External Trade (Amendment) Bill, 2021 Government proposes a toll of US Dollars 0.4 per Kilogram to be charged on wheat grain, cotton cake, maize wheat and other results of the processing business sent out of Uganda under the External Trade (Amendment) Bill. The duty whenever affirmed will be paid by exporters to Uganda Revenue Authority (URA) at the traditions point.

Traffic and Road Safety (Amendment) Bill, 2021 Government proposes under the Traffic and Road Safety (Amendment) Bill, 2021 that powerful first July, 2021, an individual claiming an engine vehicle, trailer or designing plant will utilize it out and about just if it’s authorized under the Traffic and Road Safety Act.

Inside the new Succession law

Parliament on Tuesday, 30 April 2021 passed a Bill for Act entitled, “The Succession Amendment Act, 2021” putting to rest months of intense lobbying by civil society and women rights activists who strongly advocated for the amendments.

Two Bills on the same subject matter were presented to the House, one a Private Members’ Bill by MP Rosette Kajungu Mutambi (NRM, Mbarara) in 2018 and another slotted in on behalf of government by Attorney General, William Byaruhanga.

The committee ultimately processed both Bills, merging them into one and enacting them with minor changes.

An amendment of Section 2 of the principal Act now outlaws terms ‘illegitimate child’ to replace it with ‘a child produced outside wed lock’, reasoning that the term illegitimate is discriminatory, following a court decision in the case of Law Advocacy for Women in Uganda v Attorney General, Constitutional Petitions No. l3/05 and 05/06.

The most contentious clauses came to the distribution of the properties of an intestate, a family law term to denote a deceased person who dies without a will.

Section 27 of the Act, which previously indicated the distribution of the property of only a male intestate, was declared null and void in the case of Advocacy for Women in Uganda, and the new amendment now covers both male and female intestates.

The new section 27 now maintains the traditional heir to a deceased person, except that this is a ceremonial role that does not entitle the heir to succession.

Still under section 27, 20 per cent of the property of an intestate is reserved to cater for younger, school-going children and does not form part of the property available for distribution to the different heirs.

Muslims, however, are exempted from section 27, since the faith has its own Quranic method of wealth distribution upon death of an intestate.

The Legislators also rejected a proposal in the 2018 Bill to include cohabiting spouses on the list of beneficiaries from the estate of an intestate.

Letters of administration granted by court will now be valid for three and not two years as was the case in the previous legislation, if assented to by the President.

A surviving spouse will now be entitled to 50 per cent of the estates of a deceased intestate, up from the previous 15 per cent.

Lineal descendants will now share 41 per cent, down from 75 per cent and the dependents will part with the remainder nine per cent.

The residential property of an intestate, as long as the living spouse or child of an intestate is in occupancy, will not affect the percentage of their share on the property of the intestate.

Leading women activists, including Uganda Law Society President, Pheona Wall, welcomed the legislation as timely.

The United Nations Resident Coordinator, Rosa Malango, congratulated Parliament and Speaker Rebecca Kadaga on the enactment of the Bill.

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