Latest news with #IncomeTax(Amendment)Bill
Express Tribune
18-05-2025
- Business
- Express Tribune
New tax law
Listen to article The government has formalised some of its tax reforms by passing the Income Tax (Amendment) Bill, 2024, which is basically identical to the recent ordinance which was derided by the opposition and industry groups. The bill, like the ordinance, aims to tackle the complexities faced by taxpayers, especially regarding higher tax rates imposed on income derived from federal government securities. It also prohibits non-filers from most banking activities including opening accounts; bars immovable property transfers by non-filers; restricts non-filers from buying any vehicle, except for tractors, with an engine over 800cc; and most controversially, grants FBR officials the authority to freeze non-filers' bank accounts and seize their properties. The property seizure clause has drawn ire, especially because critics say it could allow FBR officials to punish people for failing to file returns even if they don't actually owe taxes. It also hammers home the government's lack of interest in cultivating a culture of compliance rather than one of fear. Even in the case of the other new restrictions, questions over transparency are at the forefront. The anger of industry groups, though somewhat misplaced, is still a reflection of the fact that the government is struggling to maintain public trust. Indeed, if it is to silence its critics, the government will have to ensure careful implementation and monitoring that strikes a balance between effective enforcement and fair treatment of citizens. Other objectives of the amendment include rationalising the tax structure concerning business income, particularly for banking companies. By addressing these pressing issues, the government is taking a necessary step toward creating a more equitable tax framework that encourages compliance while still generating much-needed revenue for public expenditure. With a reported shortfall of Rs196 billion in tax collection during the first four months of the fiscal year, the need for effective revenue generation mechanisms has never been more apparent.
Zawya
27-03-2025
- Business
- Zawya
Government seeks tax exemptions to Bujagali, local start ups
Government has proposed yet another tax exemption to Bujagali hydro power project that will see the power producer relieved of the burden up to 30 June 2032. The proposal is contained in the Income Tax (Amendment) Bill, 2025 that was tabled for its first reading by the Minister of State, Finance, Planning and Economic Development (General Duties), Hon. Henry Musasizi. The Bill was tabled during plenary sitting, chaired by Deputy Speaker, Thomas Tayebwa on Thursday, 27 March 2025. Last month, the same Minister tabled the same Bill, seeking to extend the tax exemption to the power company up to 30 June this year. Subsequently, Musasizi appeared before the Committee on Finance, wherein the lawmakers raised concerns about the management of preferential shares by Bujagali Energy Limited, arguing that the redemption of these shares had led to financial losses for Uganda. Between 2018 and 2021, government granted the power company similar tax exemptions. However, in 2023, Parliament rejected the request by government to award Bujagali another five-year tax exemption. Meanwhile, the proposed amendments to the Income Tax Bill, 2025 also include exemption of startup businesses established by a citizen for a period of three years from tax. This exemption, the Minister justified, is aimed at encouraging entrepreneurship, support small and medium enterprises and stimulate innovation. Relatedly, Government has proposed exempting textile inputs from Value Added Tax (VAT). This proposal is contained in the Value Added Tax (Amendment) Bill 2025 that was also tabled for its first reading during the same sitting. The Bill, tabled by Minister, Musasizi, outlines the textile inputs for exemption as wet processing operations and garmenting, cotton lint, artificial fibres for blending, polyester staple fibre and viscose. Others include, textile dyes and chemicals, garment accessories, textile machinery spare parts, industrial consumables for textile production and textile manufacturing machinery and equipment. The proposed amendments in the Bill will further see solar lanterns exempted from VAT and such products include, deep cycle batteries, solar lanterns and raw materials for the manufacture of deep cycle batteries and solar lanterns. 'The repeal of the VAT exemption on billets is intended to boost local production, reduce reliance on imports, and advance Uganda's industrialisation agenda,' said Musasizi. He added, 'By supporting domestic manufacturing, this measure is expected to create jobs, enhance value addition, and stimulate economic growth.' Bio-mas pellets have also been lined up for VAT exemption, with the justification that this will promote environmental sustainability by encouraging the adoption of cleaner, energy-efficient cooking and heating solutions, reducing reliance on traditional biomass fuels. Further to that, aircraft supply is expected to be zero-rated, once the proposed amendment is adopted. The proposed amendments also introduce the anti-fragmentation rule, a move the Minister said is aimed at combating tax evasion by preventing importers from intentionally splitting consignments to remain below the VAT registration threshold. 'This measure is expected to enhance tax administration, improve revenue collection, and strengthen Uganda's VAT compliance framework,' said Musasizi. Under the proposed amendments, United Nations-related agencies and specialised agencies will be designated as listed institutions. Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
