Understanding a Tax Identification Number (TIN)

BY NOUELLA ANASO

A TIN is a 10- digit unique number allocated and issued free of charge by URA to identify a person as a duly registered taxpayer. Registration for tax purposes is a legal and civil obligation for any person – individual and non-individual – who is earning income above the set tax threshold. This income is called chargeable income.

Chargeable income is the gross income of the person for the year of income minus total deductions or business expenses allowed to the person for that year of income. URA usually looks at a normal year of income as a period of 12 months that starts from 1^st July to 30^th June. The gross income of a person for a year of income is the total amount of income derived by the person during the year from business, employment, or property. There are 3 types of chargeable income; Business Income, Employment Income and Property income.

Business income is any income derived by a person carrying out business and includes gains and losses from the disposal of business assets such as land and buildings.

Employment income is any income derived by an employee from any employment whether past including the value of any benefit, advantage or facility granted to an employee.

Property income is defined as any dividends, interest, natural resource payments, rent, royalties and any other payments derived by a person from the provision, use or exploitation of property.

Who is eligible for a TIN?

Every taxpayer who is liable to pay tax under the tax law is a taxpayer. This includes a person liable for tax on chargeable income, the recipient of a supply of imported services liable for tax, a person liable for penal tax, interest or any amount treated as tax under the tax laws and Tax Procedures Code Act (TPCA).

How does one acquire a TIN?

One can acquire a TIN either as an individual or non-individual (a company).

Application for a TIN is done online via URA ’s website www.ura.go.ug.

Before application, an individual needs the following identifications; a National ID, driver’s license and a passport.

Visit the URA website and then go to e-services, Click instant TIN, Fill in the required fields and click submit. Alternatively, the applicant may visit any of the URA offices or One-stop stations located in any of the Municipalities or KCCA division offices.

Click here for a full video on how to get your TIN instantly

For non-individual, TIN registration requires a Certificate of Incorporation/ Certificate of Registration, Company Form 20 showing the Directors of the Company, the TINS of Directors or any other persons with legal capacity to bind the entity and any other legal documents that confirm existence.

What are the obligations once one registers for a TIN?

It is the taxpayer’s responsibility to ensure they voluntarily register with URA- file correct returns, customs entries or any other forms related to taxes and pay the correct tax at the right time.

As registered taxpayer, you are also required to comply with the taxation requirements and regulations and always make full disclosure of information and correct declaration of all transactions.

Acquiring a TIN is free!

With the new interface, getting a TIN is now easier and brief because all excesses in the past application have been cut out. All one needs is a National ID, driver’s license or passport and internet access.

Follow the link below for more details; https://fb.watch/aP35m6BAcB/

What are the benefits of a TIN

A TIN acts as a security measure on transactions regarding some assets like cars, land or any other property.

It enables one to import or export goods, claim tax benefits, access bank loans, acquire a trading license from local government/KCCA to undertake business, register one ’s car and process stamp duty on land transactions above UGX 50 million.

The TIN also facilitates the administration of a taxpayer’s tax affairs since it is issued for use by a registered taxpayer alone. A TIN is issued for the purpose of complying with tax obligations and must be stated on all tax returns and any other documents used for the purpose of a tax law.

Under what circumstances will URA reject a TIN

Did you know that URA can refuse to register and issue a TIN to an applicant if the Commissioner is not satisfied with the applicant’s identity or the applicant does not meet the requirements for registration? In such a case, the Commissioner must serve the applicant with written notice of the decision refusal of registration within fourteen days.

The Commissioner can also cancel a TIN if one applies for cancellation or on the Commissioner’s own motion, if the TIN was issued to a taxpayer under an identity that is not the taxpayer’s identity or if that taxpayer has already been issued with a TIN that is still in force.

The current tax register has 2,634,062 registered taxpayers. This number is still not enough to fund the national budget for more than 40 million Ugandans. URA therefore calls upon every business owner to get a TIN number so that they can trade formally and make a worthy contribution to the development of Uganda.

The writer is a URA Media Management officer