Nsaba’s encounter with the Taxman: A Lesson in Timely Filing

By Joshua Niyonshima

As I reflect on my journey with Nsaba[not real names], a friend and property developer, I am reminded of the importance of timely tax filing. Our story began 15 years ago when we first arrived in Kampala, filled with dreams of owning a piece of the city. Nsaba’s venture into property development started with the purchase of a plot of land in Nansana, followed by the construction of a two-storey building.

However, our joy was short-lived. An unexpected visit from Magoba, a taxman from the Uganda Revenue Authority (URA), changed everything. Magoba informed us that it was time to file our rental return, a requirement that caught us off guard. We were unaware of the tax obligations that came with property development.

Magoba explained that property developers are required to register with the Uganda Registration Services Bureau (URSB) and the URA. He broke down the various taxes involved in real estate, including:

– Corporation Tax: 30% of chargeable income
– Individual Income Tax: taxed based on income bracket
– Value Added Tax (VAT): 18% on taxable supplies
– Withholding Tax: 6% on external services
– Pay as You Earn (PAYE): taxes deducted from employee salaries

The consequences of delayed filing were clear: hefty fines, interest on unpaid taxes and even enforcement action. We realized that timely tax filing was crucial to avoiding these penalties.

We took immediate action, contacting the URA and URSB to ensure compliance. We also discovered that paying taxes had been simplified, with various payment platforms available.

Today, I look back on our experience as a valuable lesson. As a property developer, it is essential to prioritize timely tax filing to avoid unnecessary fines and penalties. The URA offers assistance through their local offices, toll-free helpline (0800117000/0800217000), and in-person consultations.

Do not make the same mistake we did. Ensure you file your rental returns and pay your taxes on time to avoid unnecessary stress and financial burdens.