Kampala-Uganda Revenue Authority (URA) has explained that there is no change in the Pay As You Earn (PAYE) from 30 percent to 40 percent effective October this year as perceived by sections of the public, but rather, a consolidation of the reporting template for returns for people earning more than one income.
While appearing before Parliament’s Committee on Trade, John Musinguzi Rujooki, the URA Commissioner General said that the changes are meant to streamline payment for people who earn from more than one job.
On Tuesday, the tax body issued a public notice announcing changes made to the monthly PAYE and VAT returns templates.
“Under Schedule 1 of the Monthly PAYE return, the tax rate for computation of PAYE for employees liable to fixed rate has been adjusted from 30% to 40%. The change applies to both residents and non-residents where an employee in secondary employment and whose changeable income is in excess of 10 million Shillings per month,” reads the notice.
URA further made changes to the Value Added Tax (VAT) returns saying that a validation control has been added against the declared ‘VAT Deferred’ at importation. The implication in this case is the return will only have amounts that exist in ASYCUDA and are supported by fiscalised import receipts from the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).
While appearing before the Trade Committee where he had appeared to respond to a petition by the Kampala City Traders Association (KACITA) regarding the tax regime, Musinguzi was tasked by Igara West MP, Gaffa Mbwatekamwa to explain the reported increase of PAYE from 30% to 40%.
However, Musinguzi said that the adjustment is not necessarily an increase in the PAYE rate.
“We are not changing the law, we are not introducing a new tax rate. We are only allowing people who have more than one job to aggregate their income and pay the right tax,” said Musinguzi.
He emphasized that URA has no mandate to increase the tax rate.
In the current financial year, Uganda Revenue Authority (URA) is expected to collect 25.54 trillion Shillings to partly finance the 48.1 trillion Shilling National Budget.
Source:URN
