By Aggrey Baba
Uganda Revenue Authority (URA) has issued a strong call to landlords, urging them to voluntarily declare their rental properties and register for rental income tax to avoid severe penalties for non-compliance.
Speaking to landlords in Mbarara and Lyantonde, Isaac Aijuka, the Acting Supervisor of Tax Education Outreach in South Western Uganda, emphasized the importance of full disclosure.
“URA has a voluntary disclosure program where landlords can declare all the buildings they rent out,” Aijuka stated. “You must account for every room generating rental income, whether in Uganda or abroad. If URA uncovers undeclared properties through its intelligence, landlords will face substantial penalties.”
Aijuka clarified that rental income tax is levied on immovable property, and it is the landlord’s duty to self-declare their expected earnings for the financial year. He also provided practical examples to help landlords understand how URA calculates rental income tax.
Additionally, landlords were advised to keep proper records of rental payments to simplify the process of filing provisional rental income tax returns within the first three months of the financial year.
“Without rental records, URA will impose an estimated tax assessment, which may not be favorable,” Aijuka warned. “We prefer voluntary compliance rather than forced assessments.”
During the meeting, Samuel Tayebwa, Mbarara City Principal Tax Officer, clarified the difference between rental income tax and property tax, two often-confused levies, with rental income being the tax collected by URA on income earned from renting out a property, and property tax being the one imposed by the city council on all buildings within the city, regardless of whether they generate rental income or not.
“These taxes are mandated by the constitution, and landlords must comply with both,” Tayebwa stressed.
To avoid unnecessary penalties and financial strain, landlords were advised to engage in tax planning and take advantage of URA’s educational platforms to deepen their understanding of taxation.
As URA tightens its grip on tax compliance, landlords who fail to register their rental income could find themselves in deep trouble. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
