URA struggles to collect rental tax

Ignorance about rental tax is believed to be hampering Uganda Revenue Authority’s plan to enhance revenue mobilisation.

Some landlords have since 2004 been reluctant to file their returns.

Allen Kyomugisha, the supervisor rental tax at URA told The Nile Post that enhancing revenue mobilisation in real estate is still a challenge yet it is among the fastest growing sectors in Uganda.

The real estate sector is among the most profitable business ventures in Uganda whose contribution is seen with the capability of adding revenues to the government coffers.

But statistics from Uganda revenue Authority shows that in last financial year 2016/2017, only Shs 71 billion was collected from the real estate sector.

"In this running financial year 2017/208, the tax body has only collected Shs 48 billion from rental tax," Kyomugisha said.

By definition rental income is the total amount of rent derived by a person for the year of income from the lease of immovable property like land rented for a washing bay, customs bond, selling sand or gravel and buildings such as a house, flat, apartments and offices.

Kyomugisha said the country has many rentals but landlords still have to be reminded, and in most cases wait for

URA to force them to do their obligations.

"It’s the taxpayer’s obligation to maintain and declare accurate and complete records of all their transactions to the URA on time to avoid incurring interests and penalties," he said.

Despite the ignorance exhibited by most landlords on their tax obligation; Joan Mugenzi a landlady in Kampala took it upon herself to approach URA.

"When I started building my rentals the first thing that came into my mind was visiting URA to get more information regarding rental income," Mugenzi said.

She believes that no one can avoid taxes, advising URA to look for the landlords other than waiting for them to file returns.