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URA to impose taxes on Facebook, Netflix

Uganda Revenue Authority (URA) will start collecting VAT from non-resident service provider companies operating in the Ugandan economy, especially electronic service providers such as Facebook, Netflix, Amazon, Uber and others, effective July 1st, 2022.

John Musinguzi

John Musinguzi, the URA commissioner general, says that that the tax body has agreed with said companies on certain levies, adding that other taxes will follow as time goes on.

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Without giving away any specifics with respect to enforcement mechanism in case of non-compliance thereof, Musinguzi said the URA now has a digital infrastructure in place to effectively collect this tax.

Under section 16 (2) of the VAT Act, a non-resident person who supplies electronic services to a non-taxable person in Uganda makes a taxable supply. Such a supplier is therefore required to charge VAT on the supply, file quarterly returns, and pay VAT due on supply within fifteen from the end of each quarter.

Such companies include websites, web hosting software companies, and those supplying images, text and information, self-education packages, music filmed including gambling, and other broadcasts and events, as well as those on remote maintenance of programs and equipment.

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Next financial year, the government will up URA’s revenue collection target to shs 25 trillion shillings, which is a jump from shs 23 trillion, despite the fact that there have been no new tax policy measures introduced.

“We are left with only one option we must efficiently collect revenues from within the country, and we must mobilize more stakeholders to join us within this effort,” Musinguzi said.

The Commissioner-General revealed this plan at the URA post-budget conference on Monday.

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