By Kamugisha Kabahweza Allan
Uganda Revenue Authority has urged landlords to voluntarily declare their properties and register for rental income tax to avoid penalties associated with non-compliance.
Isaac Aijuka, the Ag. Supervisor of Tax Education Outreach in South Western Uganda, made this call last Wednesday while addressing landlords in Mbarara and Lyantonde.
“URA has a voluntary disclosure programme through which you can declare the buildings you rent out,” Aijuka stated, “declare all the rooms from which you receive rent, whether in Uganda or abroad. If URA discovers this through its intelligence, you will face substantial penalties.”
Aijuka explained that rental income tax is levied on immovable property, and it is the landlord’s responsibility to self-declare their expected rental earnings for the financial year.
He provided practical calculations to demonstrate how URA calculates rental income tax.
Additionally, Aijuka advised property owners to maintain records of rental payments, emphasising their importance when filing a provisional rental income tax return during the first three months of the financial year.
“Rental payment records help determine how much you will collect by the end of the year,” Aijuka stressed. “When you file a final tax return without such records, URA will forcefully assess you, which is not what we desire. We want you to comply voluntarily.”
During the meeting, Samuel Tayebwa, the Mbarara City Principal Tax Officer, clarified the difference between rental income tax and property tax.
“Rental income tax is charged by URA on the rent earned from letting a property, while property tax is charged by the city council on buildings constructed within the city.”
He emphasized that these levies are enshrined in the constitution.
The landlords were also advised to practice tax planning and utilise URA platforms to enhance their understanding of taxation.
