Taxation in Uganda: School Owners Disagrees Over Certain Taxes, Rates

Taxation in Uganda: School Owners Disagrees Over Certain Taxes, Rates
  • The Uganda Tax Revenue in the quest of increasing tax revenue has brought about an uproar between private school owners and the administrators of the public counterpart.

Taxation in Uganda has received a revolt as school owners in Uganda have kicked against a new tax order that compels private schools to pay taxes to the government while excluding government schools.

The concerned group lamented recently during a meeting with the Uganda Revenue Authority (URA) that the “discriminatory tax levy” creates inequality in taxation, which could hinder private schools’ ability to deliver quality education in Uganda. 

They also protested a new government condition compelling all educational institutions to get supplies from only dealers that hold tax identification numbers (TIN).

Held at the URA headquarters in Nakawa, the goal of the meeting was to deal with, among others, enlightening investors in private school education on their responsibilities and rights as taxpayers, and for the owners to share with the government their concerns regarding the current tax regime.

Taxation in Uganda: More on the Private Schools Petition

According to the petition presented to the URA commissioner for domestic taxes, Sarah Chelengat Muzungyo, school owners are not against the idea of paying taxes, they just want an unbiased system that charges every player fairly.

The petition was submitted by Christopher Kaweesa Kiwanuka, the director of the Proprietors of Private Educational Institutions’ Association in Uganda, on behalf of over 100 schools that attended the meeting.

Schools registered as companies disburse tax at a rate of 30% on their income while schools registered by individuals pay tax at a continuous rate of 10% or 20% or 30% and +10% where applicable.

Likewise, schools are obligated to collect a Withholding tax of 6% from their suppliers of items above sh1m and remit it to the URA. Also, when schools import items, customs duties are applicable depending on items that have been imported.

Schools are also required to pay VAT on materials like electricity and paper used by the schools.

During the presentation, Kiwanuka implored the government to apply education laws in the education sector in a way that creates a leveled playing ground for all investors in the sector.

Citing article 18 of the Constitution of Uganda, which declares that the state shall take appropriate steps to provide its citizens equal opportunities to achieve the highest educational standards possible, he reminded the government that private schools are providing a service on their behalf.

In response, the URA commissioner assured the school owners that the government recognizes them as critical stakeholders.

She also mentioned that school owners pay primarily PAYE (pay as you earn) for employees that they employ and the director’s income. A school should be dealt with as a business entity.

Chelengat further conceded that many schools are in losses because of the enormous capital expenditure they put into constructing their buildings.

She empathized that having to pay many statutory obligations must be tough on the schools and promised to get a focal person who will pick up on their issues so they can serve the schools better.

She then implored them to always proactively engage the tax body to avoid any issues in the future.

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