The Uganda Revenue Authority (URA) has established mechanisms to start collecting VAT from non-resident service provider companies operating in the Ugandan economy, including Facebook, Netflix, and Amazon, among other internet giants.
Ibrahim Bbosa, the URA spokesperson, said the tax collection will start on July 1 without detailing how much is expected as well as the enforcement mechanism in case of non-compliance.
“The entities we are talking about appreciate the need to contribute to social-economic development in the areas they operate.” Besides, there are laws.
We have had conversations with these entities, and we can only hope for the best, “said Bbosa.
He added, “The measure is largely reliant on trust between the large entities and URA. The reputation and risk of non-compliance by these Non Resident service providers outweigh the reasons for them not to comply.”
The government increased URA’s revenue collection target to Shs 25 trillion, up from Shs 23 trillion for the next financial year, yet there have been no new tax policy measures introduced.
Uganda currently has a public debt of more than Shs 73 trillion.