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New tax laws targeting Cars, internet and minerals

Government has, through Finance Minister, Matia Kasaija, tabled proposals for the new tax laws, which will see motor vehicle owners part with an annual license fee paid by 31st of January.

The Traffic and Road Safety Act (Amendment) Bill, 2021 seeks to impose, under clause 14.A, a license to permit ownership of “a motor vehicle, trailer or engineering plant.”

To use the vehicles specified above on the road, one must possess a license, not to be confused with a drivers’ license.

Failure to have the license, proposes the new law, could see one jailed for two years, pay a fine of Shs2 million, or suffer both imprisonment and fine.

The minister tabled the proposals during the Thursday, 1 April 2021 sitting chaired by Speaker Rebecca Kadaga.

Additionally, an annual fee, to be determined by the Minister of Works and Transport by Regulations, is also to be met by a vehicle owner.

Failure to pay the annual fee, will lead to a fine of Shs 200, 000 accumulating every day from the date the fee was due for payment – 31st of January. Clause 14B (3) proposes such a fine to be regarded as debt due to the government by the defaulter.

To incentivise the electronic receipting, the finance minister proposes in the Value Added Tax (Amendment ) Bill a refund of 5 percent of taxes to “a person rather than a taxable person and is issued with an electronic receipt or invoice or several electronic receipts or invoices worth ten million shillings within a period of thirty consecutive days.”

Under the Tobacco Control Act (Amendment) Bill, 2021, tobacco leaf exporters are proposed to bear a tax of US$0.8 per kilogram exported out of Uganda, a move intended to encourage the establishment of local tobacco processing plants in the country.

For those dealing in the export of processed gold, the Mining (Amendment) Bill, 2021 seeks to levy US$200 per kilogram, while those exporting other unprocessed minerals are to part with a tax at the rate of 1 percent of the value of the mineral in issue.

The levy of a paltry 1 per cent comes as a shocker to watchers of the mining industry, who expected a higher levy to discourage the export of unprocessed minerals and in turn aid local industrialization.

The noise from the fish maw industry has also attracted the attention of the taxman, who The Fish (Amendment) Bill now seeks a Shs 7000 levy on every kilogram of fish maw exported out of Uganda.

The lucrative industry has in recent years seen increased activity on the lakes, pushing dealers in the fish maw industry into constant cat and mouse chase with security forces deployed to salvage depleting fish stocks in the country.

Those who export wheat bran, cotton cake, maize bran and any other by-products of the milling industry will, if the External Trade (amendment) Bill comes into force, contend with a US$0.4 per kilogram of such item exported out of Uganda.

In proposals under the Excise Duty (Amendment) Bill, 2021, the taxman targets the alcohol industry a Shs 230 per litre or 30 per cent increase in the charge on opaque beer, whichever is higher.

Clause 4 seeks to increase the levy on all locally produced alcoholic beverages at a rate of Shs 230 per litre on or 30 per cent, whichever is higher.

Even nonalcoholic drinks, provided they contain yeast and bacteria, will under clause 4(c) pay a Shs 250 per litre tax or 30 per cent more of the existing tax, whichever is higher.

Internet data, except data for provision of medical and educational services will, under clause 4(f) pay an additional 12 percent of taxes on the fee charged.

The Tax Procedures Code (Amendment) Bill, 2021 seeks to allow for the appeal of the decisions of the High Court, arising from appeals from the Tax Appeals Tribunal, to proceed to the Court of Appeal and the Supreme Court, except that in the case of the Supreme Court, only points of law will form the basis of appeal.

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