By Mulengera Reporters
Private schools across the country have been reminded to comply fully with all tax requirements or risk serious penalties, as the Uganda Revenue Authority (URA) moves to tighten enforcement on institutions operating outside the tax net.
The warning was issued by Commissioner General John Musinguzi Rujooki in response to a public question in the latest edition of the Ask URA column, where he clarified the tax responsibilities that apply to private schools, particularly those in their formative years.
According to the Commissioner General, operating a private school in Uganda is no different from running any other business, and owners are expected to register their institutions for taxation and remain compliant throughout their operations. He said that failing to do so not only attracts financial penalties but could also lead to legal consequences.
“Planning is important in starting any business, including the operation of a private school. Without proper registration, tax obligations may be missed, leading to legal risk.”
The URA boss explained that schools are expected to file returns and remit all applicable taxes, including income tax on profits made, Pay-As-You-Earn (PAYE) for salaries paid to staff, withholding tax where applicable, and Value Added Tax (VAT) if they provide taxable services such as catering or boarding.
He emphasized that all these must be accounted for within the timelines provided by law.
He pointed out that some schools are designated as withholding tax agents by URA, which means they are legally required to deduct 6% tax from payments to service providers or suppliers and remit this tax to URA by the 15th of the following month, cautioning that any failure to do so constitutes a violation that can be penalised.
Regarding staff payments, Rujooki said all schools that employ teachers and support staff must deduct PAYE from employee salaries and submit both the tax and monthly returns to URA on time. Rujooki reiterated that this requirement is now fully in force and no school should claim exemption.
The Commissioner clarified that although private schools were once exempt from PAYE between July 2008 and June 2014, that policy was discontinued. “This is no longer applicable. All schools are now required to account through a PAYE return and remit the taxes due,” he said.
He also warned school proprietors earning rental income from school properties (such as canteens, shops or other hired spaces) to declare that income and pay the necessary rental tax, adding that failure to do so is a growing concern, especially among private schools in rural and peri-urban areas.
The statement comes as URA intensifies its domestic revenue mobilisation efforts, with growing attention placed on under-taxed sectors.
The Commissioner observed that while many private schools have grown into profitable institutions, several still operate outside the formal tax system, either due to negligence or deliberate evasion.
But Rujooki was firm in his warning, that all businesses must file returns and meet their tax obligations. “Where the taxpayer fails, enforcement measures will apply,” he said, adding that ignorance of tax laws is not an acceptable excuse.
The tax body says it remains committed to working with school owners to ensure compliance through dialogue, education, and support, but stressed that enforcement will be carried out where necessary. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
