Finance Act

Act 18 Finance Act 2008

THE FINANCE ACT, 2008. An Act to amend the Finance (No. 2) Act, 2002 to change the levy on the export of raw hides and skins of animals; to amend the Finance Act, 2006 to change the fees relating to services and various documents under the Traffic and Road Safety Act, 1998; to vary the rates of the environmental levy; to provide for the waiver of arrears of tax, duty, interest and penalties due on or before 30th June, 2002 and still outstanding by 30th June 2008; to repeal section 7 of the Finance (No. 1) Act Cap. 187 and for related matters. DATE OF ASSENT: 18th October, 2008. Date of Commencement: 1st July, 2008. BE IT ENACTED by Parliament as follows-

This Act shall be deemed to have come into force on 1st July, 2008.

The Finance (No. 2) Act, 2002 is amended by substituting for section 9(1) of that Act the following- "(1) There shall be charged and collected by the Uganda Revenue Authority on any person exporting raw hides and skins of animals, (fresh or salted, dried or limed, pickled or otherwise preserved but not tanned, parchment dressed or further prepared) whether or not de-headed or split, a levy at a rate of US$0.40 per kg."

The Finance Act, 2006 is amended by- (a) substituting for the First Schedule the following-

Act 18 Finance Act 2008 "SCHEDULE

FEES FOR SERVICES AND VARIOUS DOCUMENTS UNDER THE TRAFFIC AND ROAD SAFETY ACT, 1998; Cap 361

Item Fees

Vehicles for transport of persons, hearses Sedan cars, saloon cars estate cars excluding dual (a) 750,000 purpose goods and passenger vehicles Passenger vehicles, including light omnibuses having (b) 850,000 seating accommodation not exceeding 28 passengers Medium Omni buses and heavy omnibuses having (c) 1,000,000 seating accommodation for more than 28 passengers (d) Ambulances and prisons vans 250,000 (e) Hearses 750,000 Goods vehicles (including dual purpose vehicles/passenger vehicles), light goods vehicles (f) Agricultural Tractors 250,000 Goods vehicles with two tonnes or less of loading (g) 700,000 capacity Goods vehicles with more than two tonnes loading (h) 800,000 capacity and less than seven tonnes loading capacity Goods vehicles with seven tonnes or more and less (i) 850,000 than ten tonnes loading capacity Goods vehicles with ten tonnes or more of loading (j) 1,100,000 capacity (k) Prime movers/Tractor heads 1,100,000 (l) Engineering plant and other related vehicles 1,200,000 (m) Agricultural trailers 300,000 Trailers and semi trailer with gross weight less than (n) 700,000 seven tonnes Trailers and semi trailer with gross weight of seven (o) 1,000,000 tonnes or more

Act 18 Finance Act 2008 Registration fees for personalized number plate

vehicles Registration fees for personalized number plate for

motor cycles

Act 18 Finance Act 2008 Driving permit(renewal) (a) one year 35,000 (b) three years 45,000

Act 18 Finance Act 2008 (b) by substituting for the Second Schedule the following-

"SECOND SCHEDULE Section 3 ENVIRONMENTAL LEVY

on or before 30th June, 2002 and still outstanding by 30th day of June, (1) All arrears of value added tax, income tax, excise duty, import duty, penal tax and interest shall be waived.

Section 7 of the Finance (No.1) Act 1999 is repealed.

Act 18 Finance Act 2008 Cross References

Traffic and Road Safety Act, 1998 Cap. 361 Finance (No. 1) Act, Cap. 187 Finance (No. 2) Act, 2002, Act No. 28 of 2002 Finance Act, 2006, Act No. 32 of 2006

ACTS SUPPLEMENT No. 11 21st November, 2008. ACTS SUPPLEMENT to The Uganda Gazette No. 58 Volume CI dated 21st November, 2008. Printed by UPPC, Entebbe, by Order of the Government.

THE INCOME TAX (AMENDMENT) (No. 2) ACT, 2008. __________

ARRANGEMENT OF SECTIONS

Section.

deriving income) of Principal Act

THE INCOME TAX (AMENDMENT) (No. 2) ACT, 2008.

An Act to amend the Income Tax Act Cap. 340 to provide for the taxation of income of airlines; to provide incentives to persons engaged in agro-processing; to exempt business income of persons derived from operating and managing educational institutions; to exempt from tax interest on deposit auction funds; to provide for the deduction of local service tax; to provide for the taxation of petroleum operations; to provide for use of information technology in tax formalities and procedures and for related matters. DATE OF ASSENT: 18th October, 2008.

Date of Commencement: 1st July, 2008.

BE IT ENACTED by Parliament as follows:

This Act shall be deemed to have come into force on 1st July

This Act applies to years of income commencing on or after 1st July 2008, except for Part IXA which shall apply to years of income commencing on or after 1st July

Section 2 of the Income Tax Act, in this Act referred to as the principal Act, is amended by inserting the following definition in the appropriate alphabetical order- "petroleum agreement" means an agreement for the grant of a licence for petroleum exploration, development and production between the Government and a contractor;"

Section 21 of the principal Act is amended by- (a) Substituting for subsection (1) (x) the following- "(x) the income of a person derived from the operation of aircraft in domestic and international traffic or the leasing of aircraft;" (b) inserting immediately after subsection (1) (y) the following- "(z) the income of a person derived from agriculture where the person-

principal Act. Section 22 of the principal Act is amended- (a) by substituting for subsection (1) (d) the following- "(d) local service tax paid by an individual;" (b) by inserting immediately after subsection (1)(d) the following- "(e) private employers who employ ten or more persons with disabilities either as regular employees, apprentices or learners on full times basis shall be entitled to tax deduction of fifteen percent of all payable tax upon proof to the Uganda Revenue Authority;

The following Part is inserted immediately after Part IX of the principal Act- "PART IXA-SPECIAL PROVISIONS FOR THE TAXATION OF PETROLEUM OPERATIONS 89A. Interpretation. (1) In this Part, unless the context otherwise requires- "commencement of commercial production" means the first day of the period of thirty consecutive days during which production is not less than the level of regular production delivered for sale as determined by Government as part of the approval of, or amendment to a development plan, averaged over not less than twenty five days in the period;

"contract area" means an area that is the subject of a petroleum agreement and, if any part of that area is relinquished under the petroleum agreement, the contract area is the contract area as originally granted; "contractor" means a person with whom the Government enters into a petroleum agreement; "decommissioning plan" means the decommissioning plan of a contractor approved under a petroleum agreement; "development expenditure" means expenditure incurred, after approval of a development plan, in undertaking development operations including in the acquisition of a depreciable asset used in such operations and an expenditure treated as development expenditure under a petroleum agreement, but does not include any expenditure incurred in the acquisition or construction of a pipeline (not for use in petroleum operations) or expenditure that is not allowed as a deduction under section 22(2) or 23 ; "development plan" means the plan for development and production of petroleum resources in the contract area approved under a petroleum agreement; "exploration expenditure" means expenditure incurred, prior to approval of a development plan, in undertaking exploration operations, including in the acquisition of a depreciable asset used in those operations and an expenditure treated as exploration expenditure under a petroleum agreement, but does not include expenditure that is not allowed as a deduction under section 22(2) or 23 ; "participation dividend", in relation to a resident contractor, means a dividend paid by the contractor to a non- resident company that has a 10% or greater voting interest in the voting power of the contractor;

"petroleum operations" means exploration operations and development operations authorized under a petroleum agreement; "recoverable cost" means a cost of a contractor that is recoverable under a petroleum agreement out of the gross revenues from the sale of petroleum; "subcontractor" means a person supplying goods or services to a contractor in respect of petroleum operations. (2) Unless the context otherwise requires, any term that is not defined in this Act but which is defined in the Petroleum (Exploration and Production) Act has the meaning assigned to it in the Petroleum (Exploration and Production) Act. 89B.Taxation of contractors and subcontractors (1) A contractor and a subcontractor is subject to tax in accordance with this Act subject to the modifications in this Part. (2) Where there is inconsistency in the taxation of a contractor or subcontractor as between this Part and the other Parts of this Act, this Part and the petroleum agreement prevail.

A contractor is allowed a deduction for a royalty provided for in a petroleum agreement only if the amount of the royalty is included in the contractor's gross income from the sale of petroleum

If a contractor, in this Part referred to as "transferor contractor" disposes of a depreciable, intangible or other asset used in petroleum operations under a petroleum agreement, including the contractor's interest in the agreement, to another contractor or a person that as a result of the disposal will become a contractor in relation to those operations, in this Part referred to as the "transferee contractor"-

Section 157 of the principal Act is amended in subsection (3)-

and 158C to principal Act The principal Act is amended by inserting immediately after section 158 the following-

"158A.Use of information technology (1) Subject to such conditions as the Commissioner General shall prescribe, tax formalities or procedures may be carried out by use of information technology. (2) A person who wishes to be registered as a user of a tax computerised system may apply in writing to the Commissioner General who may- (a) grant the application subject to such conditions as he or she may impose; or (b) reject the application. (3) A person shall not access, transmit to or receive information from any tax computerised system unless that person is a registered user of the system.

The Commissioner General may at any time cancel the registration of the user where he or she is satisfied that a person who is a user of a tax computerised system (a) has failed to comply with a condition of registration imposed by the Commissioner General under section 158A (1); (b) has failed to comply with or has acted in contravention of any condition under the regulations; or (c) has been convicted of an offence under this Act relating to improper access to or interference with tax a computerised system.

Cross References

Petroleum (Exploration and Production) Act, Cap. 150

ACTS 21st November, 2008. SUPPLEMENT No. 11 ACTS SUPPLEMENT to The Uganda Gazette No. 5S Volume Cl dated 21sl i',en enl Printed by UPPC, Entebbe, by Order of the Government.

70 Art 70 Art Excise* Tariff /Ampndincitt) (No. 2) Act 2008

for the purpose of varying existing rates or prescribing new rates.

Date of Assent: 18th October, 2008.

Date of Commencement: 1st July, 2008.

Be it enacted by Parliament as follows:

This Act shall be deemed to have come into force on 1st July, 2008.

The Schedule to the Excise Tariff Act is amended as follows-

Act 20 Excise Tariff (Amendment) (No. 2) Act 2008 (b) by substituting for item 2(b) the following-

"(b) whose local raw material content, excluding water, is at least 75% by weight of its constituents; 20%";

ACTS SUPPLEMENT No. 11 21st November, 2008. ACTS SUPPLEMENT to The Uganda Gazette No. 58 Volume CI dated 21st November, 2008. Printed by UPPC, Entebbe, by Order of the Government.

Act 21 Stamps (Amendment) Act 2008

THE STAMPS (AMENDMENT) ACT, 2008.

An Act to amend the Schedule to the Stamps Act Cap. 342 relating to rates of stamp duty in order to add new items.

DATE OF ASSENT: 18th October, 2008.

Date of Commencement: 1st July, 2008.

BE IT ENACTED by Parliament as follows:

This Act shall be deemed to have come into force on 1st July, 2008.

The Schedule to the Stamps Act is amended by inserting after item 64 the following- "64a. Customs Bond of the total value 0.05%

for the purposes of issuing asset backed securities Nil."

Act 21 Stamps (Amendment) Act 2008

ACTS SUPPLEMENT No. 11 21st November, 2008. ACTS SUPPLEMENT to The Uganda Gazette No. 58 Volume CI dated 21st November, 2008. Printed by UPPC, Entebbe, by Order of the Government.

Act 22 Value Added Tax (Amendment) (No. 2) Act 2008 THE VALUE ADDED TAX (AMENDMENT) (NO. 2) ACT, 2008. ________

ARRANGEMENT OF SECTIONS

Section.

Act 22 Value Added Tax (Amendment) (No. 2) Act 2008

THE VALUE ADDED TAX (AMENDMENT) (NO. 2) ACT, 2008

An Act to amend the Value Added Tax Act Cap. 349 to provide a penalty where a taxpayer claims a refund in excess of what is due or claims returns, submits or declares a wrong, false or incorrect offset claim in a return; to provide for use of information technology in tax formalities and procedures; to amend the First Schedule by adding new institutions; to amend the Second Schedule relating to exempt supplies to add the supply of salt and the supply of motor vehicles for transport of goods of 3.5 tonnes and above to the list of exempt supplies; to amend the Third Schedule to add to the zero rated supplies the supply of leased aircraft, aircraft engines, spare engines, spare parts for aircraft and aircraft maintenance equipment; and for other related matters.

DATE OF ASSENT: 18th October, 2008.

Date of Commencement: 1st July, 2008.

BE IT ENACTED by Parliament as follows:

This Act shall be deemed to have come into force on 1st July 2008.

Section 65 of the Value Added Tax Act, in this Act referred to as the principal Act, is amended by substituting for subsection (6) the following-

Act 22 Value Added Tax (Amendment) (No. 2) Act 2008 "(6) Where a person knowingly or recklessly- (a) makes a statement or declaration to an official of the Uganda Revenue Authority that is false or misleading in a material particular; or (b) omits from a statement made to an official of the Uganda Revenue Authority any matter or thing without which the statement is misleading in a material particular, and (i) the tax properly payable by the person exceeds the tax that was assessed as payable based on the false or misleading information; (ii) the amount of the refund claimed was false; or (iii) the person submitted a return with an incorrect offset claim, that person is liable to pay penal tax equal to double the amount of the excess tax, refund or claim."

The principal Act is amended by inserting immediately after section 68 the following-

"68A Use of information technology (1) Subject to such conditions as the Commissioner General shall prescribe, tax formalities or procedures may be carried out by the use of information technology.

Act 22 Value Added Tax (Amendment) (No. 2) Act 2008

The Commissioner General may at any time cancel the registration of the user where he or she is satisfied that a person who is a user of a tax computerised system (a) has failed to comply with a condition of registration imposed by the Commissioner General under section 69A (1); (b) has failed to comply with or has acted in contravention of any condition under the regulations; or (c) has been convicted of an offence under this Act relating to improper access to or interference with a tax computerised system.

Act 22 Value Added Tax (Amendment) (No. 2) Act 2008 (3) A person commits an offence where he or she knowingly-

The First Schedule to the principal Act is amended- (a) by repealing the reference to the Organisation of African Unity (OAU) and replacing it with a reference to the African Union in the appropriate alphabetical order; (b) by inserting in the appropriate alphabetical order the following institutions- "(i) Belgian Technical Cooperation (BTC); (ii) IGAD Regional HIV and AIDS Partnership Programme (IRAPP); (iii) International Criminal Court (ICC)."

"(v) the supply of computers, desk top printers, parts and accessories falling under Headings 8471, 8473 and H.S. Code 8443.32.00 of the harmonised coding system;

"(aa) the supply of specialised vehicles, plant and machinery, feasibility studies, engineering designs and consultancy services and civil works related to hydro- electric power, roads and bridges' construction and public water works."

principal Act Paragraph 1 of the Third Schedule to the principal Act is amended by inserting immediately after item (j) the following "(k) the supply of leased aircraft, aircraft engines, spare engines, spare parts for aircraft and aircraft maintenance equipment."