Overview:
Cuthbert Byomugabi, the Supervisor Compliance at the Gulu Domestic Taxes office, clarified that while church collections are exempt from tax, income earned from a church-owned business is taxable.
Uganda Revenue Authority (URA) has refuted claims that it plans to tax tithes and offerings collected by churches.
Speaking during a tax sensitization meeting with students and teachers at Roots Christian School in Gulu City, Cuthbert Byomugabi, the Supervisor Compliance at the Gulu Domestic Taxes office, clarified that while church collections are exempt from tax, income earned from a church-owned business is taxable.
“Donations to charity and religious institutions and their collections are exempt from tax, he said.” However, if the church goes beyond the ministry and starts an income-generating business, URA taxes income earned from that business.”
He added, “If the church has employees, we collect PAYE from the employees’ salaries. We tax the income, not the institution.” His clarification followed concerns from Ocira Pius, a senior three student, about media reports indicating that the Taxman is targeting religious institutions.
During the engagement, Lodia Vicky, the Acting Supervisor of tax education outreach in the Northern region, sensitized the students on URA’s mandate, Uganda’s tax laws, and the role of taxes in development.
She emphasized the importance of young people engaging with taxes early. “We believe that from the seeds we are planting now, we shall have a compliant and literate generation in the future,” Lodia stated.
The engagement also addressed differences between tax revenue and local government levies, URA’s support to SMEs, and the taxation of education institutions, among other topics.