By Immaculate Wanyenze
In a bid to cushion businesses still grappling with the economic fallout of the Covid-19 pandemic and to boost tax compliance, Uganda Revenue Authority has announced a tax amnesty or waiver of interest and penalty outstanding as at June 30, 2023, for taxpayers who will pay their principal tax that was outstanding on June 30, 2023 by December 31, 2024.
The latest move is part of the commitment the Government of Uganda made to combat the effects of COVID-19 by introducing provisions in the tax laws to specifically provide relief to businesses that had been negatively impacted by the Pandemic.
The initial amnesty, granted in 2020, waived interest and penalties on outstanding principal tax (income tax, value added tax, and excise duty) as of June 30, 2020. This was in response to the nationwide lockdown imposed to curb the spread of the virus.
The Second amnesty, granted in 2023, waived interest and penalty outstanding as at June 30, 2023, for taxpayers who paid principal tax that was outstanding on June 30, 2023 by December 31, 2023. However, due to implementation challenges and the fact that businesses were still recovering from the effects of COVID-19, a number of businesses were not able to fully benefit from this waiver.
Recognizing the continued challenges faced by businesses and following requests from the business community for the payment period for the 2023 waiver to be extended, the government has responded by extending the payment period to December 31, 2024.
The current amnesty applies to only domestic taxes, that is income tax, value added tax, excise duty, lotteries and gaming taxes and stamp duty. This waiver does not cover customs taxes.
According to Sarah Chelangat, the Commissioner Domestic Taxes Uganda Revenue Authority, all taxpayers with outstanding principal taxes as of June 30, 2023, are eligible for the waiver.
Therefore, if a taxpayer pays their outstanding principal tax as at June 30, 2023 in full by December 31, 2024, URA will waive the interest and penalty that had accrued on that tax as of June 30, 2023. For taxpayers who will pay only a portion of the outstanding principal tax by December 31, 2024, the interest and penalty will be waived proportionately.
“Once payments for the outstanding principal tax as at June 30, 2023 are made, the penalty and interest that had accrued as at June 30, 2023 will be waived automatically. However, interest that accrues after June 30, 2023 is not covered. Therefore, Taxpayers are advised to pay such outstanding tax as soon as possible to avoid further accumulation of interest.” Chelangat said.
Taxpayers who will pay the outstanding principal tax as at June 30, 2023 after December 31, 2024 deadline, for example in January 2025, will not benefit from the waiver.
In order to avoid this, taxpayers are advised to check their outstanding principal tax balance by logging unto their Tax Identification Number (TIN) account on the URA web portal. Once logged in, they need to review their tax ledger and confirm the outstanding amounts. If, for any reason, they disagree with the principal tax shown on their ledger, they can quickly get in touch with their tax office so that a reconciliation is made in time for them to take advantage of the waiver.
URA therefore, urges taxpayers to take advantage of this waiver and clear their outstanding principal taxes as soon as possible before the deadline of December 31, 2024.
