Story by Tabitha Agaba and Lydia Nabakooza
Uganda Revenue Authority has embarked on nationwide campaign to register all landlords. The authority expects to collect over 117 billion shillings from rentals before the end of this running financial year. Landlords are however crying foul, citing poor service delivery as the major reason they evade taxes.
Brian Kibuuka, one of the middle-income landlords, who owns over 10 rental houses in Mulago, a Kampala suburb, says landlords will be forced to transfer the burden of the new tax on tenants. He also says he has been paying the previous rental tax but not enjoyed any social services like garbage collection.
Before 2004 owning such rentals within the capital was such a profitable business. But as government moved to widen the tax base, a rental tax was slapped on landlords.
Kibuuka’s financial woes worsened, when URA asked him to pay accumulated arrears amounting to 2.5 million shillings.
Since then, Kibuuka has been complaining about this tax.
Kibuuka is not alone. Several landlords are crying foul. They say rental tax has had a great impact on the development of the real estate sector.
Kibuuka is among the many that have been paying this tax for the last ten years.
Ian Rumanyika the deputy spokesperson of Uganda revenue authority explains why the tax body is registering all landlords within the city.
So far over 18,000 landlords have been registered and the number is expected to increase by 40 percent after the verification of the exercise.
Rental tax is paid annually and a person who earns more than 2,820,000 million shillings from rentals is eligible to pay the tax
Property identification using satellite imagery to get visual impressions of the areas will be used to guide the field verification team whose job is to give the authority more details on ownership and the status of the building whether it’s commercial or residential.
In a phone interview with the CSBAG Executive director Julius Mukunda, he said that URA can effectively do this if they have an updated tax register and work together with district administrators to collect it on their behalf.
Mukunda also noted that this tax is likely to affect the rent rates.