Kampala, Uganda | THE INDEPENDENT | To maximize tax collection, Uganda Revenue Authority has established mechanisms to start collecting VAT from non-resident service provider companies operating in the Ugandan economy.
Collection of VAT from these companies is starting effective 1st July 2022, and will focus on all electronic service providers. These include Facebook, Netflix, Amazon, Uber, and the like.
John Musinguzi, the URA commissioner general says that collection of this tax has been delayed by the lengthy discussions with these companies, but they agreed and have been finalized, and other levies will follow as time goes on.
Without detailing how much is expected as well as the enforcement mechanism in case of non-compliance, Musinguzi said the authority has finalized all the digital infrastructure required to effectively collect this tax.
Under section 16 (2) of the VAT Act, a non-resident person who supplies electronic services to a non-taxable person in Uganda makes a taxable supply. Such a supplier is therefore required to charge VAT on the supply, file quarterly returns, and pay VAT due on supply within fifteen from the end of each quarter.
Such companies include websites, web hosting software companies, and those supplying images, text and information, self-education packages, music filmed including gambling, and other broadcasts and events, as well as those on remote maintenance of programs and equipment.
Next financial year, the government has increased the URA’s revenue collection target to 25 trillion shillings up from 23 trillion, yet there have been no new tax policy measures introduced.
“We are left with only one option we must efficiently collect revenues from within the country, and we must mobilize more stakeholders to join us within this effort,” Commissioner-General Musinguzi said.
The Commissioner-General revealed the strategy at the URA post-budget conference where stakeholders gave views on how the URA can be effective in the next financial year.
Ramathan Ggoobi, the permanent secretary to the ministry of finance and secretary to the treasury said that for the first time, Uganda is to collect 25 trillion shillings locally, yet there are no new taxes introduced as well as increasing the existing ones, and this will give the economy room to reduce borrowing.
According to Ggoobi, the government is to ensure the restoration of fiscal discipline by managing its expenditures, and the money which the parliament allocated for spending is to focus on production projects that can generate more revenue.
“We are avoiding borrowing for consumption, Uganda will never do that, we are to borrow for productive projects, which we are also sequencing now, and we are going to cancel those which are not likely to deploy the money on time to avoid huge debt repayments,” PSST Ramathan Ggoobi.
Uganda currently has a debt to GDP ratio of 53.12% with a public debt of more than 73 trillion shillings.
*****
URN
The post URA to impose VAT on Facebook, Netflix appeared first on The Independent Uganda:.
from The Independent Uganda: https://ift.tt/dZigGH9
0 Comments