Rental Tax, Experts Say Government Likely To Collect shs700 billion

Experts Say Government Likely To Collect Shs700 Billion From Rental Tax

Posted by: Suubi Anne in Uganda news May 20, 2021

Experts have said the government can collect shs713 billion worth of the rental tax. Recently, parliament amended the Income Tax Amendment Bill to introduce a levy obliging owners of rental premises to pay 25 per cent of their rental income as tax to government. For this reason, the ministry of finance contracted RippleNami, an American technology company to develop the Rental Tax Compliance System.

The system will be able to detect those that have been underpaying their rental income tax. Jaye Connolly-LaBelle, the Ripple Nami Uganda chairperson also says depending on what they are collecting, they can still get more.

“Right now, there is probably 10% of the rental income tax being collected. I would say it should be around $200milion(shs713billion)a year. That is a rough estimate from the 30million collected currently.”

“There has not been a lot of tax compliance because there has not been information. We are trying to make it simpler,” he said.

Many are also blaming the low gain from the rental income on low compliance from the public.

“The problem has been non-declaration of incomes that people earn from their property. And partly our inability to access the respective data about those who own property from the various institutions that collect them. What this system is going to help us is to aggregate all the data together,” James Odong, the acting commissioner in charge of domestic taxes at URA said.

Meanwhile, Jaye emphasized the need for government to educated the public about rental income tax.

“It is more about education and communication between government and the public. The public has got to be able to concern its opinions in regards to tax and government must respond to the concerns inform of a two-way communication. I don’t think education and marketing have been addressing this.”

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