By Mulengera Reporters
The Commissioner General of the Uganda Revenue Authority, John R. Musinguzi, has issued firm guidance on key tax matters affecting Ugandans, responding to taxpayers’ questions in the Ask the Commissioner General column published in the New Vision on Thursday, February 26, 2026.
Responding to a question about the taxes required when starting a private hospital, Musinguzi explained that every business must register and account for the relevant taxes. A private hospital is required to pay income tax on profits, whether it is owned by an individual or registered as a company. It must also deduct Pay As You Earn (PAYE) from employees’ salaries and remit it to URA by the 15th of the following month. Where applicable, the hospital may be required to withhold six percent tax on certain payments to resident suppliers and professionals, and 15 percent when paying non-residents. In addition, if the hospital operates a canteen or any other side business, it must register and account for Value Added Tax (VAT).
The Commissioner also addressed a query from a Ugandan residing in the United Arab Emirates who sought clarification on whether he qualifies for tax exemption on a 2019 two-tonne cargo vehicle. He explained that exemption is possible for returning residents who meet specific conditions.
The individual must be returning to Uganda permanently after living abroad for at least two years without exceeding 90 cumulative days in Uganda during that period. The vehicle must have been owned and registered in the applicant’s name for at least 12 months before shipping, and its load capacity must not exceed two tonnes. Vehicles exceeding that limit are classified as commercial and do not qualify for the exemption.
On the issue of accumulated tax liabilities after business closure, the Commissioner responded to a former second-hand clothes trader whose business collapsed during the COVID-19 period. He clarified that a registered taxpayer is still required to file returns even when the business is no longer operating. In such cases, NIL returns should be submitted. If a taxpayer disagrees with an assessment, they may file an objection and provide supporting documents for review.
He encouraged affected individuals to visit the nearest URA office for assistance. He also noted that taxpayers can benefit from the ongoing waiver of interest and penalties accumulated up to June 30, 2024, provided the principal tax is paid by June 30, 2026. Taxpayers who have closed their businesses are advised to clear outstanding liabilities and apply for temporary deactivation of their TIN until they resume operations.
Musinguzi further explained the concept of deemed VAT, noting that it applies to mining, petroleum and donor-funded projects. Under this arrangement, VAT is treated as paid without an actual exchange of cash between the parties. However, it does not apply to passenger vehicles, food and beverages, accommodation, or entertainment expenses. Only qualifying licensees and contractors benefit from this mechanism.
He also clarified that motorcycle owners are only required to pay income tax if the motorcycle is used for commercial purposes. Motorcycles used strictly for private purposes do not attract income tax.
The Commissioner emphasized the importance of compliance, urging taxpayers to understand their obligations, file returns on time, and seek guidance from URA whenever in doubt. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
