Sepnewsletter

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Food for Thought

THE ICAI

UGANDA KAMPALA

CHAPTER

Inside this issue

Chairman's message ....................1

Secretary’s message ....................2

Editorial board ............................3

Managing committee .................4

Articles ........................................5

News corner ................................12

Woman’s corner ..........................13

Gen next ......................................15

Events..........................................16

Upcoming Events for you

• October Month—Study circle meet on the topic

of Transfer pricing, VAT on imported services,

Export of services by Mr. Anil Patel

• November Month – NRI Taxation, NRI schemes,

Money repatriation and Many other by Mr.

Dalal

(Read more on page no.15)

Chairman’s message Dear Professional Colleagues,

I congratulate all the members and specially the editorial team, Mr.

Ashok Goyal and Mr. Gourang Shah for the Launch of our First E-

Newsletter.

I am sure very soon we will also print and circulate this Newsletter.

This month on September 27, 2014 we are organizing a Breakfast

Workshop to discuss and analyse the Finance Bill, 2014 of Uganda.

Thanks to Grant Thornton Team.

Through the efforts of Mr. Mohan Reddy we will also earn 2 hours of CPE form this Workshop.

In the month of November, we are hosting a consultant from India to speak and share with us

various important provisions of Taxation on NRI’s, Investment Opportunities for NRI, Repatria-

tion of Fund from India and various other benefits for NRI’s.

I have high hope of getting various benefits to NRI Community in Uganda.

Also every Month (w.e.f. October 2014) we will be hosting Workshops on IFRS which would also

earn CPE hours. Thanks to Mr. Murtaza Dalal, PKF.

We are in discussion with ICAI, Delhi to get 30/40 hard copies of our Monthly Journal, for on-

ward distribution to our members.

Our Chapter wishes to play an important role in Lobbying our business concerns to the Govern-

ment or its regulatory body. I have earlier requested our members to write to us all their major

business concerns and proposed solution. I again appeal to all members on this.

We look forward to receiving your suggestions and ideas.

Best Wishes.

CA Rajesh Chaplot

Chairman – The Institute of Chartered Accounts of India Uganda, Kampala Chapter

E-Newsletter

Volume 1, Issue 1

September Issue

Rajesh Chaplot

“Arise! Awake! and stop not until the goal is reached.

—Swami Vivekananda”

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Secretary’s Message

Dear Colleagues,

The ICAI–UG (Kampala) Chapter was

approved by the central council of the

Institute in its 329th meeting and inau-

gurate on 1st day of February 2014 by

then President of ICAI CA Subodh

Kumar Agarwal in the gracious pres-

ence of CA J. Venkateswarulu Central

Council Member, Mr. Lawrence Kizza

Director of economic affairs in the

ministry of Finance Uganda, Mr. Begu-

misa Protazio Vice President of Institute of Certified Public Accountants of

Uganda. Today, Uganda (Kampala) Chapter is one of the most active in east

Africa Chapters of The Institute of Chartered Accountants of India. The

Uganda (Kampala) Chapter inauguration photographs were published in the

April Journal of ICAI on page no. 12.

The painstaking contribution made by the current Chairman CA. Rajesh

Chaplot and all the members of the Managing Committee has resulted in

the enhanced status that the Chapter today enjoys in the society. I consider

it a great privilege and honour to be a part of this organization that has

been built on a strong foundation of intellectual heritage and trust.

The various technical, social and community development programs under-

taken by the Chapter from the date of its inception have been a great suc-

cess. The resurgence of the economy and business environment in the

UGANDA coupled with the recent government initiatives and regulations to

promote the all-round growth in the country is bound to pose new chal-

lenges to the profession.

Managing Committee had organised Quarterly Networking of Members on

4th April 2014 from 6:30 PM to 8:00 PM at Plot no. 13, Hill View Drive,

Bukoto. Meeting was attended by more than 25 members and during this

meeting we had elected/ selected the subcommittee members to assist the

Managing committee in organising various technical, social and community

programmes.

We have organised a Breakfast meeting on the eve of election results in

India on 16th Friday May 2014 from 6:00 AM to 9:00 AM. H.E. Sri Ramesh

Chadra, Indian High Commissioner to Uganda was Present on the day

Our Chapter organised a family picnic in commemoration of 65th year of

Chartered Accountants day at Kakira Sugars Factory, Jinja on 20th July 2014.

Picnic was attended by around 25 members from Kampala and Jinja. I

thank all the members who attended the picnic and my special thanks to

Mr. Ashok Goyal for organising games to cross section of the members.

I take this opportunity to thank the management of M/s Kakira Sugars par-

ticularly Mr. Reddy who had organised a wonderful facilities and factory

tour for our members and their families. As a whole it was a wonderful

opportunity for the members and their families to know each other and to

develop the bond among them. It was indeed a great and fun filled day.

The Chapter will therefore continue to organize high quality professional

development programs that will prepare all our members to face these

challenges and to make a positive contribution to the society and growth of

the country. The responsibility to contribute to the community is well rec-

ognized by the members and the Chapter will continue to organize and

expand its Corporate Social Responsibility programs.

I am very happy to inform all the members that our Chapter has been regis-

tered in Uganda by virtue of having registered the documents with Uganda

Registration Services Bureau (URSB). However, in order for it to become a

legal entity we lodged the documents with Ministry of Lands for it to be

registered as a trust which is under process. I should not forget to thank

Mr. Allan Kakungulu, Legal Officer at Compliance Business Services Ltd for

his time and effort in getting the chapter registered.

I would also like to inform the members that we are in constant touch with

the CEO of Institute of Certified Public Accountants of Uganda to register

our member as the members of the CPA Uganda. If not possible at least as

non practicing member of the Institute without writing the exams. The CEO

has communicated to us in his letter dated 4th April that the matter was

forwarded to the concerned committee for necessary action. We are very

positive about the outcome. We will inform all the members once we re-

ceive the communication from CPA Institute.

We also please to inform the members that we had developed the website

(http://www.icaiug.org) for our Chapter. Request the members to visit the

website for latest news and events organised by our chapter. And also re-

quest the members to register through online form. The membership form

is designed to have all the import information pertaining to the member of

the Chapter. (http://www.icaiug.org/memindex.html). I thank Mrs. Roja

Ramani for designing the website.

Our chapter also have a face book account (https://www.facebook.com/

UGANDAICAI). I request all the member to visit our facebook also for all

latest updates.

I congratulate and thank all the members and specially the editorial team,

Mr. Ashok Goyal and Mr. Gourang Shah for the Launch of our First E-

Newsletter.

Although the affairs of the Chapter are managed by a committee of SIX

members, and supported by four subcommittees, the ideas, thoughts and

opinions of all the stakeholders are extremely important for the committee.

I therefore request you to be in touch with us and I am certain that your

suggestions will help us to serve you better.

With Best Wishes

CA Mohan Reddy Yadla

Secretary

Uganda (Kampala) Chapter of ICAI

Email: [email protected]

Mohan Reddy

3

Dear Professional Colleagues,

On behalf of the ICAI – Uganda (Kampala) Chapter the editorial Board presents to you the first edition of ICAIU Newsletter. The editorial

board is thankful for overwhelming response of the members who have contributed articles of professional interest as well as all other

useful information. I am sure that this enthusiasm shall continue in the future also and in the coming times the humble beginning of ICAIU

will achieve greater heights at the Central level.

As someone rightly said- "No one can whistle a symphony. It takes a whole orchestra to play it". – The saying holds very true in our case as

once again our members joined hands in providing high quality submissions and invaluable contributions to this first edition of this news-

letter. We thank all of them for their contributions and would encourage other fellow members to participate in future.

I am great full to Editorial Board, Management Committee and to my Associate Editor Mr. Gourang Shah for all the help extended to me in the execution of Editorial re-

sponsibilities to launch this first newsletter of ICAI.

One piece of log creates a small fire, adequate to warm you up, add just a few more pieces to blast an immense bonfire, large enough to warm up your entire circle of

friends; needless to say that individuality counts but team work dynamites.

Hence we request all the fellow members to contribute in the newsletter. Following are the various sections:

ARTICLE / DISCUSSION FORUM / WOMAN’S CORNER / GEN-NEXT / HEALTH TIPS / LIGHT MOMENTS / FUNNY FACTS / SOME USEFUL INFO / NICE QUOTES

It is really our dream to make this esteemed Association of ours the most distinguished body of the professionals in Uganda. However to achieve this dream, one and all

of us has to sincerely contribute towards its growth.

Please reach us at : [email protected]

We look forward to your critical reviews, suggestions and positive contributions on the Chapter activities and also on the content of this newsletter.

Enjoy reading !!!

With warm regards,

On behalf of the Library & Media Committee of ICAIU

Ashok Goyal

Chief Editor and Chairman of the Sub Committee

“Library & Media Committee of ICAIU”

E-mail: [email protected]

Dear Readers,

The ICAI–UG (Kampala) Chapter feels proud to publish the first newsletter.

We are happy that though it was a short notice given to all the members to contribute articles, we received a hopeful response and

those have been published in this newsletter. We hope this will be positive and encouraging going ahead.

We are approaching near October 2, the day celebrated as Mahatma Gandhi’s day. Let’s shape ourselves in his path of wisdom and

let’s contribute positively to our profession and our institute. The contribution also extends to our society at large and we should cele-

brate the public day by reaching out to more wider public. Gandhiji, had spent his initial years in Africa and had developed the nation

through his immense contribution; same has to be followed by all of our esteemed members of the institute.

We wish all the readers to find this newsletter more encouraging and we shall expect more participation in our forthcoming issues and publications. We wish to prosper

and conquer this area of knowledge sharing through medium of “You”.

May god bless everyone and let’s celebrate more events that will be taking place within the institute. We would like to hear from you about this newsletter: “Share your

feedback”.

CA Gourang Shah

Editor


Email: [email protected]

Gourang Shah

Ashok Goyal

Editorial Board

4

Managing committee for ICAI-2014-2015

Chairman

CA RAJESH CHAPLOT

M/S GRAPHIC SYSTEMS (U) LTD

FACTORY:8, BUVUMA ROAD, LUZIRA,

P.O. BOX 22631, KAMPALA—UGANDA

M.No.73834

Tel: +256 41-4504503/4

Fax +256 41-4054501

M: +256 772 220 074

Vice Chairman

CA DILIP SAREMAL BHANDARI

REGIONAL MANAGER - OIL & GAS

SPEDAG INTERFREIGHT UGANDA LTD,

PLOT 284, NAKAWA INDUSTRIAL AREA,

KAMPALA – UGANDA.

M.No.112621

Telephone : +256 414 562000 / +256 312 562000

Fax : +256 414 562111

Direct: +256 414 562119 / +256 312 562119

M: +256 772 721086

Email:- [email protected]; [email protected]; dilipbhan-

[email protected]

Secretary

CA MOHAN REDDY YADLA

DIRECTOR

TIRUMALA ENTERPRISES LTD

PLOT – M695; UMA SHOW GROUNDS, LUGOGO,

P.O. BOX 4042, KAMPALA, UGANDA

M.No.205111

Tel: +256 414 505474 / +256 312 505 474

M: +256 756 569 369 / +256 712 569 369

Treasurer

CA ANIL PATEL

Managing Partner

GRANT THORNTON

2ND FLOOR, PLOT 5, KATEGO ROAD

OPP: BRITISH HIGH COMMISSION, OFF KIRA ROAD, KAMWOKYA


M.No.108225

Tel: + 256 312 266850 ; +256 414 535145 ;

M: +256 751 100105 | F: +256 41 4533771

Member

CA MAHESH KARKI

M/S GRAPHIC SYSTEMS (U) LTD

FACTORY:8, BUVUMA ROAD, LUZIRA,


M.No.101434

Tel: +256 41-4504503/4

Fax: +256 41-4054501

M: +256 712220074

Member

CA ASHOK GOYAL

(Gapco Uganda Ltd)

Plot No. 13/14, 7th Street Industrial Area,

PO Box 7105, Kampala, Uganda

M.No.75646

Tel: +256 414 259101/102 Direct +256 414 259 103

M: +256 776 7776 76 / +256 711 22 22 68

E-mail:- [email protected]; [email protected]; [email protected]; [email protected]

5

Sub committee for ICAI-2014-2015

CPE / Seminar / Study Circle Committee Name

Chairman CA Mahesh Karki

Convener CA Murtuza Dalal

Committee Member CA Himmat Patel

Committee Member CA Shakil Shafi

Committee Member CA Manjit Kothari

Committee Member CA Nilesh Patel

Mobile

712220074

772200094

783469046

772744282

712699906

718209220

E-mail

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Sports & Cultural Committee Name Mobile E-mail

Chairman CA Mohan Reddy 712569369 [email protected]

Convener CA Rishitosh Kabra 776004083 [email protected]

Committee Member CA S. Srikant 712233796 [email protected]

Committee Member CA Adinalayana Balcha 715947050 [email protected]

Committee Member CA Dilip Mali 753541556 [email protected]

Advocacy committee Name Mobile E-mail

Chairman CA Rajesh Chaplot 772220074 [email protected]

Convener CA Dilip Bandari 772721086 [email protected]

Library & Media Committee Name Mobile E-mail

Chairman CA Ashok Goyal 776777676 [email protected]

Convener CA Gourang Shah 750333098 [email protected]

Committee Member CA Hirak Bhansali 794705070 [email protected]

Committee Member CA Paresh Shah 717631208 [email protected]

6

What is Tax?

It is a compulsory and non-refundable contribution, charge or levy insti-

tuted by law and executed by government for public purposes.

Who is a Taxable Person?

The term person is defined to include an individual, a partnership, a

trust, company, a retirement fund, a government, a political subdivision

of government, and a listed institution. These can be residents or non-

residents that have derived any taxable income from Uganda.

What is Taxable Income?

Taxable income is gross (Business, Property, and Employment) income

less exempt income and allowable deductions. The gross income of a

resident person includes income derived from all geographical sources

whereas for a non-resident person it comprises of only income derived

from sources in Uganda

Allowable deductions include expenditure and losses to the extent to

which they are incurred in the production of income included in gross

income, and capital allowances such as initial allowance, depreciation

allowances, industrial buildings allowances computed at rates specified

in the Income Tax Act.

TAX Rates

Annual Tax Rates for Resident Individuals

• The annual income tax threshold for resident individuals is now

UShs. 2,820,000 (up from Ushs 1,560,000 to June 2012).

• Employment income tax is paid through the Pay-As-You-Earn

(PAYE) system.

• Tax is withheld by the employer monthly and remitted to the tax

authorities by the 15th of the following month.

Annual Income Tax Rates for Non-residents

Taxable Income Per annum Ushs

Rate %

0 - 2,820,000 0

2,820,001 - 4,020,000 10

4,020,001 - 4,920,000 20(+)

4,920,000 – 120,000,000 30 (+)

Over 120,000,000 40(+)

Taxable Income Per annum Ushs

Rate %

0 - 4,020,000 10

4,020,001 - 4,920,000 20

4,920,001- 120,000,000 30

Over 120,000,000 40(+)

• Non-residents with no permanent establishment in Uganda pay tax at

the specific withholding tax rates.

Corporation Tax Rates

Net Operating Tax Losses

Years

Carry back 0

Carry forward unlimited

Payment of Corporation Tax by Companies

Companies are required to pay their tax in two equal installments within the

financial year by the end of the 6th and 12th month.

The annual self-assessment return is due for submission by the end of the

6th month after the financial year end and all the unpaid taxes are due on

that date.

Penalties of 20% are imposed if the final tax liability for the year exceeds the

tax liability shown in the provisional return by more than 10%.

Failure to submit a final return by the due date attracts penalty of Ushs

200,000 per month or 2% of tax assessed whichever is higher.

Foreign Tax Relief

A foreign tax credit is granted for foreign tax paid on foreign source income

taxable in Uganda. The credit is limited to the Ugandan tax on such income.

CAPITAL ALLOWANCES–ALL TAX PAYERS

Wear & Tear allowances are granted on reducing balance method except on

Commercial, Industrial buildings and farm works which is on straight line

basis.

Corporate Tax Rates Rate %

Resident and Non Resident Companies 30

Branch Tax 30

Branch profit remittance tax 15

Capital gains tax 30

Mining companies 25 - 45

Wear & Tear

Commercial Buildings **5%

Industrial Buildings 5%

Computers & Data handling Equipment

40%

Vehicles with sitting capacity of less than 30,

and load capacity less than 7 tonnes. 35%

Motor vehicles with sitting capacity of 30 or more, and load capacity of 7 tonnes or more.

30%

Plant & Machinery used in farming, manufac-

turing or mining 30%

Railroad cars, locomotives and water transporta-

tion equipment, aircrafts 20%

Furniture, fixtures 20%

Other Plant & Machinery 20%

Farm works 20%

Articles by Members

7

* Depends on the geographical location

** Where construction was started on or after 1 July 2000 and 1st July

1997 in case of approved hotels and approved hospitals.

Other Capital Allowances

Intangible assets Cost/useful life

Start-up costs 25%

Start-up costs and intangible asset allowances are on straight line basis.

WITHHOLDING TAX RATES

Important Notes

Note 1: * Applies to all resident professionals except those who are ex-

empted from WHT or provide written clearance from Uganda Revenue

Authority.

Note 2: ** The tax so withheld is a final tax if it arose from;

A payment of interest

By Bank of Uganda to any person on Treasury bills or other Government

securities;

By a financial institution to a resident individual (other than a trustee),

resident retirement fund, or to an exempt organization;

A payment of dividends to a resident individual.

Note 3: *** Following July 2012 amendment, the rate for resident indi-

viduals was increased from 15% to 20%.

Note 4: WHT is not applicable to an amount attributable to the activities

of a branch of a non-resident.

WHT on Investment Income

WHT on payment of interest to resident persons does not apply to interest

paid;

• By a natural person;

• To a financial institution (except interest from Government securities);

• By a company to an associated company (≥ 50% of voting power);

• But is exempt from tax in the hands of the recipient.

Income distributed to holders of Unit Trusts and other Collective Invest-

ment Schemes is exempt from withholding tax.

Interest Income earned by Financial Institutions on loans granted to persons

engaged in Agriculture is exempt from Income Tax.

TRANSFER PRICING (TP) POLICIES

Business entities in Uganda which have dealings (to the tune of UShs. 500m

or above) with both resident and non-resident related entities may be tar-

geted by the Uganda Revenue Authority (URA) in a campaign to curtail

revenue loss in relation to businesses involved in cross-border transactions.

The Income Tax (Transfer Pricing- TP) Regulations, 2011 ought to be applied

by related enterprises in determining the arm’s length price of goods and

services in transactions involving them.

Under the TP rules, such companies or groups are now required to prepare

and put in place transfer pricing documentation in accordance with these

rules by the next filing of the company’s annual return.

Payment of Withholding Tax

Withholding taxes are required to be paid by the 15th day of the month fol-

lowing the month of deduction.

INDUSTRIAL ZONES

Industrial zones have been set up for the production of exports with the

following incentives:-

a. A ten year tax holiday for air craft business, exportation of finished

consumer and capital goods.

b. Duty exemption on raw materials, plant and machinery and other in-

puts

c. Stamp duty exemption

d. Duty drawback to apply on import of goods from domestic tariff area.

e. No export tax on goods exported.

f. Exemption of withholding tax on interest on external loans.

g. Dividends repatriated to get relief from double taxation.

Note: The above applies to those who apply in writing to the Commissioner

and have been granted the certificate of exemption.

NEW INCENTIVES/EXEMPTIONS

With effect from 1st July 2009, the following new incentives/exemptions have

been granted:

Residents %

Non-Residents

%

Dividends **15% 15%

Dividend from listed

companies **10% 15%

Interest **15% 15%

Interest on T. Bills &

Bonds *** 20% 15%

Royalties - 15%

Management fees - 15%

Sporting or Entertainment income

- 15%

Natural resource payment - 15%

Lease of equipment - 15%

Payment by Government Entities

6% -

Professional fees *6% *15%

Imports of final consumer goods

6% 6%

Shipping, air transport, or

road transport *2%

Business of transmitting

messages

5%

8

1. The incentives granted to new agro-processing investments have

been modified to exempt income of a person derived from agro-

processing where the person--

A. applies in writing to the Commissioner to be issued with a certifi-

cate of exemption at the beginning of his or her investment;

B. invests in new plant and machinery to process agricultural products

for final consumption;

C. processes agricultural products grown or produced in Uganda;

D. undertakes to fulfill regularly all obligations under this Act relating

to his or her investment;

E. has been issued with a certificate of exemption by the Commis-

sioner.

“Agro processing” in relation to agricultural products of pastoral, agri-

cultural, or other farming operations, means an industrial or manufactur-

ing process that substantially transforms or converts raw agricultural

produce in order to convert the produce into a different chemical or

physical states and includes the activities that take place between

slaughter or harvest of the raw product in order to change it or preserve

it.

NSSF CONTRIBUTIONS

The combined employer and employee contribution by a member to the

NSSF is 15% of the total employee cash emoluments. The 5% employee

contribution is not tax deductible on the employee while the employer’s

10% contribution is tax deductible against the employer’s income.

Amounts commuted from a registered pension fund, including the Na-

tional Social Security Fund (NSSF), are tax exempt. Similarly, amounts

commuted from a registered provident fund are tax exempt. There is no

limit on the amount that can be withdrawn.

VALUE ADDED TAX

Value Added Tax (VAT) is chargeable on the supply of goods/services in

Uganda and on the importation of goods/services into Uganda. There are

exceptions to the tax, which are dealt with either by zero-rating or ex-

emption.

Taxable Persons

A business entity is required to register for VAT if it has supplied or

expects to supply taxable goods or services up to the value of Ushs 50

million in a year or if the gross income for three consecutive calendar

months exceeds Shs. 12.5 million.

The categories of supplies for VAT are standard rated, zero (Schedule

III) and exempt (Schedule II) supplies.

What is VAT?

Tax Base

The taxable value of supply is the price for which the supply is provided.

The taxable value for a supply that is not arm’s length is the price at

which the goods would have been sold in the ordinary course of busi-

ness.

Tax Rates

The standard rate is 18%. However, VAT on sale of residential properties for

the period July 2008-June 2009 was at 5%. Effective 1st July 2009, the sale of

residential properties is exempted from VAT.

Input Tax

A taxable person is allowed to deduct input tax incurred on purchase of

goods and services used in making taxable supplies from the output tax

charged. Any excess output tax is payable to the Commissioner of Domestic

Taxes while excess input tax is refunded.

Mixed Supplies

Where a registered person provides both taxable and exempt supplies, the

input tax is apportioned. Tax on certain inputs is non-deductible. This in-

cludes tax on expenditure on all vehicles other than commercial vehicles and

entertainment unless the taxable person is involved in the business of car

hire (car rentals) or entertainment respectively.

VAT on Imported Services

Where a ‘vatable’ service (taxable at 18%) is received from outside Uganda

by a person or business which is in Uganda, VAT must be accounted for by

the recipient at the time of making payment (for that service) to the non-

resident. This is called VAT on Imported Services (also called ‘Reverse VAT’

in some other Tax Jurisdictions).

The VAT on Imported Services mechanism transfers the liability to account

for, and pay VAT on imported services from the non-resident person who is

making the supply, or providing the service (the supplier), to the resident

person who is receiving the service.

Effective 01st July 2011 claim of VAT on imported services was 'revoked'. As

such it becomes a cost.

VAT Representatives of Non-resident Persons

A non-resident person may be required to apply for registration for VAT

purposes. Where such a person does not have a fixed place of business in

Uganda, they shall appoint a VAT representative in Uganda. Alternatively,

the Commissioner General may appoint a VAT representative for the non-

resident person.

The requirements, rights and obligations of a VAT representative of a non-

resident person are defined in the VAT Act.

The meaning of ‘non-resident person’ in this case is in accordance with the

interpretation given by the Income Tax Law.

VAT Refund Claims

A person claims, returns, submits or declares a wrong, false or incorrect off-

set claim for any tax period is liable to a penal tax of 100% of the difference

between the correct amount and the wrong offset.

9

Payment of VAT

VAT is payable to Uganda Revenue Authority and is due by the 15th day

of the month following the month of supply. Tax on imported goods is

payable at the customs clearing point.

Record-Keeping for VAT

A registered person must keep records of all supplies made and received

for a period of 6 years. The person is also required to furnish the pur-

chaser with a tax invoice at the time of supply.

OTHER TAXES

Customs duties are charged on imported goods. Customs duty rates vary

from 0% to 25%.

Excise Duty

Excise duties are charged on designated imported and local goods and

services.

Customs Duty

Stamp Duty

Stamp duty is charged at varying rates on various legal documents/

agreements e.g. transfer of shares, issue of shares.

Gambling Tax

The Gaming and Pool Betting (Control & Taxation) Act, Cap 292 pre-

scribes a tax of 20% (an increase from 15% to 30th June 2012) on the gross

receipts which is however interpreted by Uganda Revenue Authority as a

WHT when computing annual income tax.

Levies and fees

Effective 1st July 2009 environmental levies have been imposed on im-

portation of used items as follows;

Levies & Fees Imposed

Some fees are charged in various areas including road fund, environ-

mental levy on used locomotives and spares, registration fees, visa fees

and work permits.

Tax Rates

The standard rate is 18%. However, VAT on sale of residential properties for

the period July 2008-June 2009 was at 5%. Effective 1st July 2009, the sale of

residential properties is exempted from VAT.

DOUBLE TAXATION AGREEMENTS (DTAs)

◊ Uganda has DTAs with United Kingdom, Denmark, Norway and South

Africa, Italy, Mauritius and India.

◊ DTA with Belgium has been signed and is awaiting ratification by Par-

liament

◊ DTAs with the following countries are yet to be signed; Egypt, China,

UAE, Sudan, Seychelles, Netherlands,

◊ The East African Community Tax Agreement with Tanzania, Kenya,

Burundi & Rwanda is awaiting enforcement.

Local Service Tax (LST) and Local Hotel Tax (LHT)

♦ Effective 01st July 2008 LST is levied on all individuals in gainful em-

ployment and collected by all Local Governments.

♦ Similarly, effective 01st July 2008 Hotels/lodges to collect Local Hotel

Tax (LHT) from occupants and remit to Local Governments where lo-

cated.

♦ Five and four staff hotels – US$ 2 per room per day or its equivalent in

Uganda Shillings.

♦ Other hotels/lodges have several tax bands prescribed for them

Disclaimer:

This information is prepared for guidance only and is not a substitute for

professional advice. Whilst every care has been taken to ensure accuracy of

information contained herein, the author, ICAI Uganda Chapter and the

publishers cannot accept responsibility for any action taken without appro-

priate professional advice.

Article written by:

Article by:

FCA/CPA MURTUZAALI DALAL

PARTNER, PKF UGANDA

MEMBER: ICAI UGANDA CHAPTER

Used Item Rate or %

Motor vehicles more than 8 years old 20% of CIF

value

Cookers, radios & household appliances Shs. 50,000

Motorcycles, scooters, mopeds, bicycles

& (used) spare parts of motor vehicles 20%

Worn clothing, worn shoes and other

worn articles 10% of CIF

value

10

Impact of VAT on Feeds for Poultry

and livestock on farmers: - Normally the small farmers opt for poultry , diary, pig farming to gen-

erate additional income and support their families. Even at present the

rate of success in this sector is very little mainly due to the fact that

factory made feeds are more expensive than the home mixed feeds

and that makes them to choose the home mixed feeds. These home

mixed feeds are highly inefficient due to their sub standard quality.

People who are mixing these feeds are not technically trained to know

the nutritional requirement of the animal or the birds. In our studies of

the field we have invariably found that the farmer lost their business

because of non performance or under performance of their live stocks.

Sub standard feeds are the main reason for this collapse. Now with

VAT factory made feeds would become more expensive and this would

deter the farmers from buying the quality feeds. These farmers nor-

mally are not organized and sell their products in informal markets so

they would not be able to claim the VAT input and ultimately whole

VAT on purchase would become cost for their farm output. This cost

would certainly make the produce of the farm expensive and given the

state of purchasing power of the country, it would become unafford-

able to public. This may lead public to avoid this type of product which

may ultimately kill these small farms.

Impact of VAT on Feeds for Poultry

and livestock on Feed Industries: - There are very few good feeds factories in the country and even these

are not being run on as a profitable venture. The organized feed indus-

try faces immense competition from the local feed which are manufac-

tured in every nook and corner of the country. These feeds are nor-

mally cheaper than the factory produced feeds because of their sub

standard quality. Since these local feed mixers are not in organized

sector they would not be caught under tax net and can easily evade

tax and also increase the margin. In our opinion, the feed industry,

which is already ailing can really collapse completely. This will cause

big direct and indirect employment loss along with detrimental effect

on farmers who sell their produce to factories. Any way collapse of any

kind of industry in any country is not good for the economy.

Impact of VAT on Diary industry: - Diary industry is one of the biggest hopes for Uganda’s economic

prosperity along with the Oil industry. This is the time when farmers

and investors both were looking at this industry as big time opportuni-

ties. By subjecting the diary machineries and milk products to VAT, this

budget has dampened the mood of farmers and investors. This sector

would not be seen as some opportunity where the government would

help it. VAT imposition on these items would increase the cost of in-

vestment and cost of the milk products. This industry is still in a nas-

cent stage and public is about to include in their nutritious food menu.

Now the increase cost would convert it in luxury, not for everyone.

Under these circumstances, in absence of local market no industry can

survive. Further our neighbor Kenya which has very high capacity of

milk processing in comparison of ours can push their product in our

market through smuggling which our system has never been able to

stop. This would result into revenue loss to the government and at the

same time business loss to the industry.

General opinion: - Everywhere in the world farmers and agriculture related industry is

protected by the government for it is understood that farmers are very

important contributor to the country’s GDP. Almost all the developing

countries are doing everything to protect them and nurture them. It

would be very much in the interest of the country if government could

withdraw mentioned VAT budget proposals and find other alternative

way of raising the revenue.

Article by:-

Ashok Mishra

VAT on milk product and feeds for poultry and livestock is highly detri-

mental to the interest of farmers and industries in Uganda

11

As companies strive to bolster competitive advantage in a com-

plex global environment, savvy business leaders are leveraging

technology to accomplish their goals. Over few years, growing

companies have invested in various technologies to streamline

their business like Enterprise Resource Planning (ERP), SCM

(Supply Chain Management), Business Intelligence (BI) etc.

While ERP solutions and enterprise business applications inte-

grate information from legacy systems and specialized best-of-

breed software, most enterprise solutions do not provide a

simple dashboard, or analytical approach to information pres-

entation. Standard reports provided by business applications do

not satisfy the need for on-the-fly, end-user reports that enable

the kind of sophisticated decision-making and monitoring

power a business needs.

A tool like Business Intelligence can help business centralize

their data provides better access, helps business concentrate

on key business metrics and identify the root cause.

There are numerous market micro-segments in the small and

medium size business community, and in many of these seg-

ments business intelligence tools are still a new concept that

has yet to be adopted. Yet, these tools are just as critical to

small and medium sized businesses as they are to large compa-

nies.

A typical enterprise will require graphical reporting and presen-

tation, data integration, filtering, sorting, ranking, drill through

capabilities, forecasting and predictive analysis, balanced score-

card and KPI features, custom alerts, publishing and sharing of

meaningful data and personalized dashboards. These tools can

be deployed throughout the enterprise to cascade strategy and

goals, improve productivity and enforce accountability.

Flexible, affordable, adaptable tools and features make it easier

to employ a self-service approach to business intelligence. The

enterprise can quickly acquire, implement, train and deploy BI

across the company, and thereby achieve optimal business per-

formance and improved revenue.

Good business intelligence must integrate data from every

available data source in the company, and present that data in

a way that is meaningful to every user - in other words, it must

be personalized to the role and function of the users. BI solu-

tions must provide high-performance, mobile tools and fea-

tures like deep dive analysis, cross-tab OLAP and graphical

OLAP, key performance indicators (KPIs), forecasting and pre-

dictive analysis and more.

Business Intelligence tools are now redefined to meet the ex-

panding needs and aspirations. For an instance, ad hoc analysis

like Profit and Loss analysis with drill down to daily transactions

can be made with single drag and drop. Sales Analysis by region

with drill down on region and period with benchmarking

through spot lighters can be done to highlight exception values.

Ratio analysis using key performance indicators (KPIs) an or-

ganization can compare annual reports of their competitors on

certain KPI and ratios, which are intrinsic to their industry. This

helps them track their performance, vis-a-vis their competitors.

Such advanced business intelligence tools enables slice and

dice, drill through, drill up, benchmarking and virtually makes

data speak to you and answer critical business question.

A Chartered Accountant or an auditor can act as an ambassador

of change in any organization and provide cutting edge consult-

ing drawing on aspects like Financial Accounting, Corporate

Finance perspectives, Governance, Risk and Compliance in

Banking, Insurance, Capital Market etc. They can identify excep-

tions, variations and demarcation from pattern with ad hoc

analysis and exception alerts and highlighting to identify varia-

tions, gaps and exceptions for diverse domains.

Tools like ElegantJ BI provide a self-serve environment to im-

prove competitive advantage and make positive changes in the

business with clear, concise data and integrated information

from disparate systems and sources. There is no need to spend

millions of dollars or months or years implementing a cumber-

some, unwieldy business intelligence solution. The once daunt-

ing obstacles of cost, usability, and implementation time and

user adoption no longer apply. If your enterprise is on the fence

about business intelligence, or is looking to improve BI accessi-

bility and open the borders of information access to every user,

this is the time to seriously consider the new business intelli-

gence solution environment. Improve competitive response

and the quality and speed of decisions. Get your users involved

and encourage accountability and empowerment. There is no

reason to wait!

Article by:-

Mr. Paresh Shah

Business Intelligence for Chartered Accountants

Leverage Business Intelligence and become an Ambassador for Change

12

News from India

International Taxation

India urges all nations to join tax information pact

Delhi : Welcoming the G20 pact on exchange of information to curb tax evasion, India on Monday urged all nations to join the pact

but expressed reservations about the mandatory arbitration in the Mutual Agreement Procedure (MAP) of tax treaties saying it not

only "impinges" on the sovereign rights of developing countries in taxation but also limits the ability of developing countries to ap-

ply their domestic laws for taxing non-residents and foreign companies.

SERVICE TAX

Service taxes set to get a big infrastructure bump

Delhi : The service tax net will be cast wider soon to include a wide range of construction-related services, which are currently ex-

empt as “infrastructure services” and form more than a third of the country’s Rs 4.5-lakh-crore construction sector.A 12% levy on

services such as construction and upkeep of highways, bridges, airports, metro rail networks, post-harvest storage infrastructure,

mechanised food grain handling systems and possibly even low-cost housing projects would add to the cost of these services, ex-

perts said.

RBI

Street expects RBI to hold rate for entire year

Maharashtra : The current financial year might end up being the first in seven years to see the Reserve Bank of India (RBI) keep-

ing the benchmark repo rate unchanged, indicates a Business Standard poll among 15 financial experts, days before the central

bank’s review of its monetary policy.As many as nine respondents — all leading names in the public sector, private and foreign

banks, as well as other financial intermediaries — said RBI would hold the repo rate at eight per cent at least until the end of March

2015.

FDI Policy

Red Carpet for FDI in Construction

Delhi : The Narendra Modi government is set to substantially ease norms for foreign investment in the construction sector, hoping

to drum up interest in the prime minister’s plans for 100 smart cities as well his affordable housing initiative. The government is

seriously considering the removal of all restrictions on size and minimum capitalisation for the smart cities as well as affordable

housing projects. “The discussions are on for exempting smart cities from all FDI conditionalities. We need to give them a push by

making it attractive for investors,” said a government official. The new policy is also expected to provide easier exit windows.

Misc. Corporate Laws & Other Commercial Policies

Govt considers price control on medical devices

Delhi : Lack of transparency in the health care sector could invite stricter norms and regulation. The government might cap the

maximum retail price of medical devices, mainly the ones meant for hospital usage such as stents, catheters and implants, sources

said.The health ministry and Department of Pharmaceuticals are working on a proposal to bring price regulation of medical devices

under the National Pharmaceutical Pricing Authority, which monitors the prices of medicines.

Finance & Money Markets

Government mulls another ETF comprising stocks of L&T, ITC and Axis Bank and some blue chip PSUs

Delhi : Buoyed by the success of its exchange-traded fund comprising stocks of state-owned companies, the government is now

looking to launch another such exercise to take advantage of the ownership of blue chips such as ITC and Larsen & Toubro through

the Specified Undertaking of Unit Trust of India (SUUTI), besides some other key public sector stocks. "We are looking at another

ETF with L&T, ITC and Axis Bank and some blue chip public sector companies," said finance secretary Arvind Mayaram.

13

Women’s corner

Great Women Power!!!

“ They say it is a man’s world,

What a myth unfurled!

It is a woman who gives life,

She is a daughter and a wife!

She is a mother and a friend,

A survivor to the end!

A most dignified being,

Who teaches the art of living!

She is no more a house mat,

And can put on a multiple hat!

An engineer, doctor and accountant,

Still retaining the master chef patent!

Gods most precious creation,

Radiates love and illumination!

It is no longer a man’s world,

It’s a Woman's World!”

Article by:-

Darshana Bhatia

Heart of a Women in

Business !!!

A woman in business is like no other

Multi-brilliant at work, and a great mother.

Ready to go, whenever the need

She knows in her heart, there’s a calling to feed.

To do right, to speak up, determined to succeed

A role model that plants the possibility seed.

Knows who she is, right down to the core

Her essence, her passion—shine all the more!

She’s in charge with a handle on it all.

At the office, at home, or at the mall.

So energetic, creative and fun…

Early rise, there’s much to be done!

She still finds time to laugh and to play

Sacred time too, to kneel and to pray

Her daily prayer resides in God’s grace

Serving others from her heart sets the pace

Making use of her talent, wisdom and skill

From strengths and trust in Divine will.

Gentle, compassionate, loving and strong

In this sisterhood of success you want to belong

The road to get here has been quite a ride

“Call me ‘Woman’– it’s my source of pride!”

Come along, she’s blazing new trail

A woman in business—whom we all hail!

Article by: -

Mrs. Shefali Shah

(Masters in Pharmacy)

14

Women’s corner

Lesson from Life for Happy Living: DOOR TO DIVISION

We come from a turbulent past

To an info-age moving way to fast

The fate of these lands

Is now placed in our hands

Will we bring destruction to an end

Will we have the power to mend

Save this fragile dreamland

Wash away our footprints in the sand

Global warming is causing weather changes right before our eyes

But we still blacken our skies

Sunrays take less time to burn our faces

But we still destroy our rain forests and just leave empty spaces

The men spill out of the factories everywhere

Punching their time clocks basically unaware

Don’t realize what's happening to the big picture

The massive devastation of the atmospheric mixture

Every day go through their daily motions

Waiting it out for measly promotions

Distant stares and silent prayers

Monday to Friday . . . say goodbye

Our oceans are slicked with oil spills

Our waterways full of toxic waste that kills

We build our cities on mountains of pollution

Without an environmental solution

We live our lives in search of wealth

In the process damage our good health

Crime stories are found on every newspaper page

People loosing control in an uncertain age

The victims of greed are getting younger

In a world that still allows their hunger

Our petty problems make us hang down our heads

While million's go unfed

Desire unfolds the light of our day

But we cannot give in to the subtle decay

We must rise above the haze descending

Toward mass action mending

We must take control of our actions today

or the children of tomorrow will be the one's to pay

The new innkeepers shall soon take charge

of the next generation’s voyage at large

Trends are patterned and patterns trended

But man's damage must be ended!

Article by:-

Anju Goyal

15

Itinerary for ICAI Uganda (Kampala) Chapter (September 14 to November 14)

SR. No Item Responsible person Target date

1 Speaker

• NRI Taxation

• NRI schemes

• Money repatriation

• Many other

Rajesh Chaplot November 2014

2 India Vision - Article of Mr. Dalal Rajesh Chaplot October 2014

3 India Vision - Article of Mr. Dalal Mr. Dalal / Rajesh Chaplot November 2014

4 Study circle

• Transfer pricing

• VAT on imported service

Mahesh Karki / Anil Patel October 2014

5 CPE hours - IFRS Mr. Dalal October 2014

6 CPE hours - IFRS Mr. Dalal November 2014

7 Discussion on finance bill Uganda Mr. Anil Patel / Mr. Ashok Goyal 27/09/2014

Congratulation Master Yadla

Lohit Reddy s/o Sh. Mohan

Reddy for winning the sec-

ond price in drawing compe-

tition for children below 7

years while a great grand

social program of 15oth Birth

Anniversary of Swami

Vivekanand organised by HSS

and HSC, Uganda.

GEN NEXT We are always proud of our

upcoming generation. They are

the future and they are the lead-

ers of tomorrow.

We encourage our members to

share their children’s achieve-

ments, awards, their recognition.

In this edition, we wish to con-

gratulate:

⇒ Master Yadla Lohit Reddy

⇒ Mr. Parth shah

Congratulations to Mr. Parth shah on completing his Char-

tered Accountancy course from the Institute of Chartered

Accountants of India (equivalent to the ACCA UK degree).

He also completed Bachelors of Commerce from H L Insti-

tute of Commerce from Ahmedabad University. He is cur-

rently pursuing CFA course.

16

Photograph’s of ICAI Chapter Launch

Chapter launch– 1st feb 2014 Chapter launch– 1st feb 2014

Chapter launch– 1st feb 2014




17

Photograph’s of ICAI Uganda– India election result party 16th may

Awaiting results Final picture of the winning party

Celebrations of the history created Members with Indian High Commission, Uganda

Post results discussion Dignitaries & their participation

18

Photograph’s of ICAI Uganda– First picnic

19

Photograph’s of ICAI Uganda– First picnic

Couple game Winner-Couple game

Tour-Madhvani sugar industry

Tour- Lubira hill

Tour-Madhvani sugar industry

Winner of shier bazar game

Winner- Balloon game Balloon game

20

ICAI Uganda Publication

E–Newsletter (For private use only)

Registered office:


Plot no. 10/12, Nakasero Lane,

P.O.Box 21138,

Kampala, Uganda

Phone: +256 414 340087

Fax: +256-414 340088

E-mail: [email protected] or

[email protected]

Editorial Board

Chief Editor: Mr. Ashok Goyal

Editor: Mr. Gourang Shah

Printed by: Graphic Systems

Sepnewsletter

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