The Independent has reported that Finance Minister Hon Matia Kasaija, among his newly tabled 2021/22 tax proposals, sought an increase in rental income tax from 20 per cent to 30 per cent for individual landlords. This would match the rate paid by corporate landlords and others paying 30 per cent.
To offset the increase, the proposed law would allow individual landlords to deduct 60 per cent of the gross rental income to cater for expenditures and losses incurred in the production of rental income, up from 20 per cent. This may cause lower rental tax liability for some individuals.
Should they enact the 2021/22 tax proposals for landlords into law, it will require landlords with two or more rented properties to account for and pay the tax for each building separately. It is not the first time Parliament has seen this proposal; the Independent reported Parliament in 2019 rejected a similar proposal to compel landlords and corporates with multiple properties to declare the income from each asset separately.
The above aspect of the proposal seeks to prevent landlords who hide behind making losses to evade taxes. Through this tax reform, the government expects to collect UGX 7 billion shillings.
Kasaija tabled before Parliament 12 tax bills that the government intends to use as budget proposals for 2021/22.
The Proposed Tax Bills 2021
- The Traffic and Road Safety Act (Amendment) Bill, 2021
- The Fish (Amendment) Bill, 2021
- Mining (Amendment) Bill, 2021
- Tax Appeals Tribunal (Amendment) Bill, 2021
- The Excise Duty (Amendment) Bill, 2021
- External Trade (Amendment) Bill, 2021
- Income Tax (Amendment) Bill 2021
- Stamp Duty (Amendment) Bill, 2021
- Tobacco Control (Amendment) Bill, 2021
- Value Added Tax (Amendment) Bill
- Tax Procedure Code (Amendment) Bill 2021
- Appropriation (Amendment) Bill 2021
The above bills that Parliament’s Finance Committee is expeditiously handling should be ready before the 11th Parliament begins on May 20th.
