Overview:
According to the Minister of Finance Matia Kasaija, the Bill amended the Value Added Tax Act, Cap. 349 to expand the definition of electronic services.
The Government of Uganda has proposed that imported services, among them music, films and games, self-education packages, web-hosting, should pay tax.
According to the Value Added Tax (VAT) Amendment Bill, 2023, currently being scrutinized by Parliament, the other services targeted for tax are political, cultural, artistic, sporting, scientific and other broadcasts and events; including television, advertising platforms, streaming platforms and subscription based services.
Others are cab-hailing services, cloud storage, and data ware housing.
The draft Bill suggests that tax returns will be done and filed reflecting in the form of the United States Dollar (USD) currency as opposed to the current form which allows business owners to do the same in local currency thus Uganda Shillings.
Section 31b of the amended Bill states: “A person who makes a supply of a total annual value in excess of the amount specified in section 7(2) and who imports a service, shall lodge a tax return with the Commissioner General within fifteen days after the end of the tax period in which the service was imported.”
According to the Minister of Finance Matia Kasaija, the Bill amended the Value Added Tax Act, Cap. 349 to expand the definition of electronic services; to provide for a limit on input tax to activities related to output tax being accounted for and disallow input tax credit to a registered foreign supplier.
The other is to provide for the declaration of value added tax on imported services by large unregistered persons and un registered government entities; to provide for ZEP-RE (PTA Reinsurance Company) as a listed institution; and for related matters.