UGANDA, Kampala | Real Muloodi News | The Uganda Revenue Authority (URA) has appreciated all landlords while offering them a lifeline to clear their rental tax arrears.
In a public notice published on October 16, 2023, URA appreciates all the landlords who spared their valuable time to participate in the rental income tax engagement held at the URA Headquarters in Nakawa on September 27, 2023.
Landlords with rental tax arrears that were due by June 30, 2023, are encouraged to pay the principal tax by 31 December 2023. This deadline extension comes with a significant incentive.
By paying the principal tax by the specified date, landlords can benefit from a waiver of interest and penalties. URA points to Section 40D of the Tax Procedures Code Act as the legal basis for this opportunity.
For those landlords who have fallen behind on their rental tax payments, URA has extended an olive branch in the form of a voluntary disclosure provision.
Under Section 66 of the Tax Procedures Code Act, non-compliant landlords are invited to voluntarily disclose their tax obligations. By doing so, they can pay the principal tax liability without incurring any interest or penalties.
URA has expressed its commitment to support voluntary disclosure initiatives aimed at facilitating tax compliance among landlords.
Calculating the Rental Tax Obligation
The rental tax rates differ based on the nature of the taxpayer, whether they are individuals or entities such as companies, trustees, or retirement funds.
For Individuals:
– Rental Tax = 12% x Chargeable Income
– Chargeable Income = Rental Income (R) – UGX 2,820,000 annually or UGX 235,000 monthly (the allowed exemption threshold)
For Companies, Trustees, and Retirement Funds:
– Rental Income Tax = 30% x Chargeable Income
– Chargeable Income = Gross Rental Income (R) – Allowable Related Expenses but not exceeding 50% of R
Landlords are encouraged to make monthly, quarterly, or bi-annual rental income tax payments based on their specific financial arrangements.
URA Warns Non-Compliant Landlords
URA has emphasised that it has the means to detect non-compliance among landlords. The authority is prepared to scale up enforcement actions against those who fail to meet their rental tax obligations.
Non-compliant landlords will be required to pay all unpaid taxes, interest, and penalties, which can be a significant financial burden.
Given the impending enforcement actions, landlords with compliance gaps are encouraged to take advantage of the provided amnesty provisions before it’s too late.
Additionally, all landlords are urged to consistently declare their rental income accurately by asking the tenants to pay their rent through the banks and by issuing EFRIS/Electronic receipts.
For further assistance, kindly visit any URA Service Centre or call our toll-free numbers 0800117000/0800217000 or send an email to services@ura.go.ug or chat with us on WhatsApp at 0772140000.
The opportunity to clear these arrears without incurring additional costs is a significant incentive to ensure tax compliance. However, landlords are urged to act quickly before enforcement actions are taken.
READ MORE LIKE THIS:
URA Explains Rental Income Tax: Regulations, Compliance, and Collections
URA Extends Olive Branch: Waives Interest and Penalties for Landlords
URA Mandates E-receipts for City Landlords to Tackle Tax Evasion
