KAMPALA, UGANDA — The Uganda Revenue Authority (URA) is addressing common taxpayer issues, with Commissioner General John Musinguzi offering guidance on a range of topics from tax payments to account management.
In a recent Q&A session, Musinguzi provided clarity on several key concerns.
PAYE and Unpaid Salaries
A company in Lamwo asked what to do about a Pay As You Earn (PAYE) tax demand from URA, despite not having received government funding to pay employees for eight months. The company had been filing returns in anticipation of payment.
Musinguzi clarified that withholding taxes like PAYE are due only when salaries are paid. He advised the company to submit a nil return and inform their local tax office that no salaries have been disbursed. The company can then amend the returns once the employees are paid, which will prevent the URA system from generating late payment reminders or enforcement actions.
EFRIS Credit Note Approval
Regarding the Electronic Fiscal Receipting and Invoicing System (EFRIS), a taxpayer asked how long it takes for a credit note to be approved. Musinguzi said credit notes are typically approved within eight business days.
He noted that delays may occur due to verifications, such as checking stock or confirming the transaction with the buyer. To mitigate potential issues for taxpayers, URA now recognizes credit notes in the month of the original invoice, which helps avoid penalties and interest that may have accrued during the approval process.
Other Taxpayer Questions
- Name Change on a TIN: For individuals who have legally changed their name, Musinguzi explained that they must update their Tax Identification Number (TIN). He provided a step-by-step process for applying online or visiting a URA office, requiring documentation such as a deed poll and confirmation from the National Identification and Registration Authority (NIRA).
- Reporting Misused Government Funds: Musinguzi advised the public to report any misuse of government funds to the Inspectorate of Government (IGG), providing specific toll-free numbers and email addresses for reporting.
- Multiple Sources of Income: Musinguzi confirmed that individuals with multiple income sources, such as a full-time job and a side business, must register them all under a single TIN. Each separate business can be registered as a branch. For multiple companies, however, each legal entity must have its own TIN and file taxes individually.
- Commission Income: The commissioner general clarified that withholding tax on commission from airtime distribution or mobile money services is considered a final tax. Therefore, individuals earning only this type of commission are not required to file a separate tax return. For other types of commission, however, a tax return must be filed to declare all income and offset any tax already withheld.
