URA urges landlords to comply with the rental property tax  

By John Baptist Ahumuza

Kampala: The Uganda Revenue Authority (URA) has met up with different tenants and landlords from Kampala Central, Nakawa, and Lubaga Business Districts to pave the way on how rental tax collections can be increased in Kampala city and also brief them on the 12% property tax scheme.

In a dialogue meeting at their headquarters in Nakawa, Kampala, the Commissioner General of URA, Mr. John Musinguzi Rujoki, expressed concern about the low rental tax collections in Kampala City despite the new technologies the authority has deployed. He urged them to comply with these taxes, as this is of great benefit to the country.

Mr. Musinguzi added that people with houses with an annual income of less than 235,000 Uganda Shillings are exempt from these taxes.

“Let us rethink our strategy because the only way we can be successful is by getting back to the people who pay this rent because the authority and the country as a whole are suffering with this head tax,” Commissioner General Musinguzi said.

According to the URA, every landlord is required to pay 12% tax for individual tenants, while corporate tenants are required to pay 30% of the annual rent.

It should be remembered that URA collected 215.10 billion shillings in rental tax against a target of 171.09 billion shillings in the last financial year, much as this is not the authorities target.

According to the Commissioner General, they are also planning to collaborate with KCCA to count all rental properties in Kampala to determine the owners and amounts they are required to pay, but each property owner will pay tax after deducting 25% of the expenses that have enabled them to sustain their property each year. This is one of the strategies to improve tax collections.

“We shall consult with KCCA, which will provide us with lists of all commercial buildings to guide our officials in the fields in executing their duties by ticking off the list to ensure all are covered,” Musinguzi added.

The owners of rental properties in the suburbs expressed their dissatisfaction with these taxes and the harshness of tax collectors, who at times use force while collecting them.

However, by the end of the meeting, URA and tenants agreed to work together to realize compliance with rental property taxes.

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