Ugandans have been left cursing after the tax collecting body in Uganda, the Uganda Revenue Authority (URA), revealed how they have increased the Pay As You Earn (PAYE) tax by 10%. According to a notice released by URA, it has been revealed that effective October 4th, this change has been in existence. It’s, however not only PAYE that has been increased but also the Value Added Tax (VAT).
Effective October 4th, 2022, the following changes have been made to the monthly VAT return and PAYE return templates.” URA proceeded to advise all taxpayers to download the new and enhanced tax return templates before filing tax returns for the month of September 2022 going forward. According to this notice from URA, “a validation control has been added against the declared “VAT Deferred” at importation.”
The return will only allow amounts that exist in ASYCUDA and are supported by fiscalized import receipts from EFRIS. URA then proceeded to reveal how a 10% increment has been labeled on the PAYE from 30% to 40%.
“Under Schedule 1 of the monthly PAYE return, the tax return, the tax rate for computation of PAYE for employees liable to a ‘fixed rate’ has been adjusted from 30% to 40%.”
This change applies to both residents and non-residents where an employee is in secondary employment and whose chargeable income is in excess of UGX 10,000,000 per month. Ugandans have however showed dissatisfaction with this adjustment as it comes at a time when Ugandans are undergoing tough economic situations.