The gross income of a resident person includes income derived from all geographical sources. The gross income of a non-resident person includes only income derived from sources within Uganda.
Tax is charged on the gross income of an individual for the year less any allowed deductions granted by the ITA.
Personal income tax rates
|Annual chargeable income (UGX*)||Tax on column 1 (UGX)||Tax on excess (%)|
* Uganda shillings
|Annual chargeable income (UGX)||Tax on column 1 (UGX)||Tax on excess (%)|
The tax rate applicable to an individual for the purposes of rental income is 20% of the chargeable income in excess of UGX 2,820,000.
In determining the chargeable income of an individual, the individual is allowed expenses of 20% of their rental income.
Individuals are now allowed a deduction in respect of interest incurred on mortgages obtained from financial institutions to acquire or construct premises that generate rental income.
Withholding taxes (WHTs)
As in the case for corporations, individuals that are employers are also obligated to withhold tax on payments of employment income made to their employees. This is a final tax for an individual who does not have other sources of income.
Individuals also incur WHT on payments of interest made to them. The WHT is at a rate of 15%. However, individuals are not obligated to withhold tax on payments made by them to taxable persons.
WHT is also incurred at a rate of 15% on dividends received by individuals. However, if the dividend is received from a listed company, the WHT incurred is 10%.
WHT is also charged on the importation of goods into the country. The tax charged is at a rate of 6% on the value of goods imported. Individuals are required to maintain records of the WHT paid on imported goods.
Tax at 6% is also deducted on receipt of payment from the government of Uganda, a government institution, a local government, or designated withholding agents for supplies exceeding UGX 1 million.
Tax credits are available for the WHT suffered. However, tax suffered on interest from government securities is a final tax. Such interest is therefore not included in the chargeable income of the individual and no tax credits are granted on it.