Professional Documents
Culture Documents
Uganda Budget
Synopsis
June 2014
Authority will collect taxes of Shs
9,577 billion (USD 3,830.8M); and
UGANDA BUDGET
Non-Tax Revenues of Shs 206 billion
HIGHLIGHTS (USD 82.4M). Other domestic
funding will be sourced by issuing
ECONOMIC PERFORMANCE Government securities worth Shs
Theme of the budget 1,437 billion (USD 574.8M) on
domestic markets; and net
Maintaining the Momentum: Government drawdown from savings
Infrastructure Investment for of Shs 1,102 billion (USD 440.8 M).
Growth and Socio-Economic
Transformation
TAX PROPOSALS
GPD Growth
The objectives of the various tax measures
Ugandas economy grew through
for the Financial Year 2014/15 are to
Financial Year 2013/14 albeit more
raise revenues, enhance transparency in
modestly than the 6.2% that was
collection and enforcement, improve
projected year ago. The economy is
compliance and encourage.
projected to grow by at least 7% in
2014/15.
The tax following tax proposals have been
put forward.
Inflation
Inflation remained low during the
year and dropped to 5.4% by May
2014 and Annual core inflation INCOME TAX
declined to 3.3%.
Elimination of Initial Allowances on
Eligible Property
Key expenditure areas FY 2014/15
Sector Allocation (UGX/US$) %
Initial allowance on eligible property
UGX (Bn) USD (M) will be terminated. A person who
Security 1,006 402 7%
places an item of eligible property
Infrastructure 2,576 1,030 17% into service for the first time during a
Energy and
year of income will no longer be
Mineral 1,676 670 11%
development allowed a double tax deduction for
Education, that year of income of accelerated
Health and 3,550 1,420 25%
Water depreciation and ordinary
not not not depreciation.
Agriculture indicated indicated indicated
Resource envelope
Presumptive Tax Threshold
Total resource envelop is projected
at Shs 15,054 billion (USD
The presumptive tax rate has been
6,021.6M). Domestic sources will
increased from 1% to 3%.
contribute Shs 12,321 billion (USD
4,928.4M). Uganda Revenue
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Tax on Sports and Pool Betting The definition of start-up costs will
winnings and Designation of be restricted to only non-recurring
Gambling Houses to withhold the tax preliminary costs, which are
associated with starting up a
15% tax has been introduced on business.
winnings derived from sports and
pool betting. Other Technical Amendments.
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Excise duty on kerosene at 200
ix. Supply of Specialized Vehicles, shillings per litre has been
Plant and Machinery services reinstated.
and civil works related to roads
and bridges Sugar
construction,Agriculture, Excise duty on sugar was increased
Water, Education and Health. from 25 shillings to 50 shillings.
The following supplies have been Bank Charges and money transfer
excluded from zero-rating and will fees
therefore be subjected to VAT at
18%:- 10 % excise duty has been
introduced on bank charges and
i. Supply of Printing Services for money transfer fees.
Educational Materials
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the Tax Procedures Code are now
before Parliament.
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KENYA HIGHLIGHTS Total resource envelop is projected
at USD 13,572. Domestic sources
Economic Performance will contribute USD 12,490 and
external sources USD 1,082.
Thematic areas of the budget
Enhance business environment for
job creation
TAX PROPOSALS
Improve our productivity and
competitiveness in the domestic
Corporation Tax
and international markets,
Reduce the cost of living on a long- Corporation tax rate remains at 30%
term basis for residents and 37.5% for non-
Protect the poor and vulnerable and residents.
to sustain long-term growth
Reduce unemployment among our Proposal to allow deduction of
youth and women expenditure paid by employers for
Strengthen devolution so as to vacation trips made within Kenya for
facilitate efficient delivery of a period of next 12 months.
services
Sector %
Education 27% Personal Taxes
Energy, infrastructure & ICT 23%
No changes in tax brackets. The
Public admin & international relation 15%
highest tax bracket rate remains at
Governance, justice, law & order 10%
30%.
National security 8%
Resource envelope
Customs and Excise duty
Import Duty Exemption
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Proposal to exempt from duty
machinery, spares and inputs for
direct and exclusive use in the
development and generation of Solar
and Wind energy
Duty Increase
Introduction of new
Bills/Regulations
Proposal to introduce;
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TANZANIA HIGHLIGHTS Income tax
Economic Performance
Exemption from taxes of all incomes
and gains to the holders of the bonds
Theme of the budget that will be issued by the African
Development Bank in Tanzania
Reduce the cost of living, by domestic capital market.
continuing with efforts to reduce
inflation rate; improve social Impose 15 percent final withholding
services; improve roads, energy and tax on Board of Directors fees.
irrigation infrastructure; increase
wages and salaries of public servants, Introduction of tax on income derived
reducing the tax burden for workers, from gaming by companies.
creation of employment
opportunities and enhance good Remove exemption of withholding
governance. taxes on Rental charges on aircraft
lease paid to a non-resident by a
GPD Growth person engaged in air transportation
business.
Gross Domestic Product (GDP) grew
by 7.0 per cent in the year 2013 as Remove powers of the Minister for
per target. Finance to grant exemptions for
projects relating to expansion and
Inflation rehabilitation undertaken by
investors. This exemption is currently
The annual inflation rate has granted to investors who own TIC
continued to decline from 9.4 per Certificates
cent in April, 2013 to 6.3 per cent in
April, 2014. The targeted inflation Adjust PAYE threshold from 13
rate to end June 2014 is 6.0 percent to 12 percent. This measure
percent which is likely to be is intended to provide relief of tax
achieved. burden to employees
Resource envelope
The rate of presumptive tax will be
increased from 2% to 4 % for annual
Total resource envelop is projected
turnover which exceeds Tshs.
at USD 12,032. Domestic sources
4,000,000 but not exceeding Tshs.
will contribute USD 9,450 and
7,500,000 for record keeping
external sources USD 2,582.
businesses; and increase the current
flat rate from Tshs. 100,000 to
200,000 for non-record keeping
TAX PROPOSALS businesses.
Excise duty
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include soft drinks, alcohol, spirits
etc.;
Excise duty rate of 0.15 will be
removed on money transfers through (a) Excise duty on soft drinks was
banks and telecommunication. increased from shillings 91 per
litre to shillings 100 per litre;
Introduced excise duty of 10 percent
to be paid by banks and (b) Excise duty on locally produced
telecommunication companies and fruit juices increased from
various agencies for the fees and levy shillings 9 per litre to shillings
they collect on money transfer 10 per litre
services.
(c) Excise duty on imported fruit
Remove powers of the Minister for juices increased from shillings
Finance to grant exemption on excise 110 per litre to shillings 121
duty on petroleum products. per litre;
However, this measure will not
involve exemptions granted through (d) Beers made from local un-
Agreements signed between the malted cereals from shillings
Government and development 341 per litre to shillings 375
partners to finance development per litre;
projects such as roads and water
supply infrastructures. (e) Other beers from shillings 578
per litre to shillings 635 per
The threshold on the age of non- litre;
utility motor vehicles that are
currently being charged an excise (f) Wine produced with domestic
duty of 25 percent will be changed grapes content exceeding 75
from the current 10 years to 8 years. percent, from shillings 160 per
litre to shillings 176 per litre;
The age threshold was adjusted from
10 years to 8 years for non- (g) Wine produced with more than
passenger utility motor vehicles and 25 percent imported grapes
passenger carrying vehicles that are from shillings 1,775 per litre to
currently being charged 5 percent shillings 1,953 per litre;
excise duty.
(h) Spirits from shillings 2,631 per
Proposed excise duty rate of 15 litre to shillings 2,894 per litre;
percent on imported furniture under
HS Code 94.01. Excise duty of 25 percent will be
charged on cigarettes. Proposed
amendments to excise duty rates on
Increased by 10 percent the specific cigarettes as follows:
rates of excise duty on non-
petroleum products; these products (i) Cigarettes without filter tip and
containing domestic tobacco
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more than 75 percent from
shillings 9,031 to shillings ii) The United Nations and its
11,289 per thousand organizations, international and
cigarettes; other foreign Institutions
(j) Cigarettes with filter tip and dealing with technical
containing tobacco more than assistance but which do not
75 percent from shillings undertake any business
21,351 to shillings 26,689 per activities;
thousand cigarettes;
iii) Religious Institutions whose
(k) Other cigarettes not mentioned employees are solely employed
in (i) and (j) above from shillings to administer places of worship,
38,628 to shillings 48,285 per to give instructions or
thousand cigarettes; administer religious activities
only;
(l) Cut rag or cut filler from
shillings 19,510 per kilogram to iv) Charitable organizations which
shillings 24,388 per kilogram; do not perform any business
activities;
(m) The excise duty rate on cigar
remains at 30 per cent. v) Local Government Authorities;
and
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Cement will be removed from the list iii) Continue to grant duty
of deemed capital goods which enjoys remission to soap
tax exemptions under the Tanzania manufacturers using LABSA as
Investment Centre. raw materials from 10 percent
to 0 percent under HS Code
all tax exemptions have been 3402.11.00; HS Code
removed on investments granted to 3402.12.00 and HS Code
telecommunication operators under 3402.19.00 for the period of
the Tanzania Investment Centre for one year.
deemed capital goods such as
telecommunication towers and their iv) Increased duty rate from 10%
accessories, generators, tower to 25% on chemical based
fences, vehicles, base station (petroleum) aerosol spray
accessories, earthling, surge, and under HS Code 3808.91.39.
lightening protection system etc.
v) Reduced the duty rate on
Introduced a new definition for papers under HS Code
strategic investor by increasing the 48.05.11.00; HS Code
threshold of capital for foreign 4805.12.00; and HS Code
investors from US Dollars 20 Million 4805.30.00 from 25% to 10%.
to US Dollars 50 million as the lower
threshold capital that an investor is vi) Tanzania is to grant import
required. duty exemption on Electronic
Fiscal Devices (EFD) for a
Decisions made at the EAC period of one year.
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Administration of taxes
on imported petroleum
products
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Ernst & Young has taken every care to
ensure the accuracy of the contents herein;
the firm will not accept responsibility of any
damage or loss suffered by any one as a
consequence of any errors that may be
contained in this synopsis.
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