Overview:
Andrew Kyakonye, the regional tax education officer, said investigations had uncovered cases where schools operate two payroll systems—one for internal use and another declared to URA.
The Uganda Revenue Authority (URA) has cautioned school owners and administrators against the use of parallel payroll systems, a practice some institutions reportedly employ to deliberately underdeclare income and evade taxes.
Speaking during a tax compliance engagement at Prime Hotel on Tuesday, Andrew Kyakonye, the regional tax education officer, said investigations had uncovered cases where schools operate two payroll systems—one for internal use and another declared to URA.
“This results in under-declaration and is not acceptable,” Kyakonye warned.
He emphasised that tax compliance should be treated as a planned financial obligation, noting that late filing attracts penalties of Shs200,000 or 2 per cent of the tax due, whichever is higher.
The meeting, which brought together school directors, bursars and teachers, focused on Pay As You Earn (PAYE) and Withholding Tax (WHT) obligations.
Mr Umar Kiyaga, the Tororo Domestic Taxes Station in-charge, urged schools to withhold taxes on transactions expected to exceed statutory thresholds.
“If you know your supplier will exceed Shs1 million in a year, start withholding immediately. Do not wait,” he said.
Addressing concerns from teachers over salary deductions, Mr Kiyaga noted that taxation is strictly guided by established legal thresholds.
Participants were also advised to properly structure contracts for part-time and secondary employees to ensure correct tax treatment and avoid future legal disputes.
The engagement forms part of URA’s sector-based outreach aimed at addressing tax issues, enhancing understanding and simplifying compliance among taxpayers.