Its almost Monday. In Uganda fuel prices, traffic jams and an unpredictable shilling all sit like black birds on the shoulders of citizens. Government income in the current environment is also a major issue of discussion. Like i posted here earlier- government policy wonks are circling around pools draining cash from the economy like the huge energy subsidy related to the high cost of thermal power.One interesting development this June was the announcement by URA in a circular that it requires any property transferred above the value of 50 million shillings should indicate income tax status of the transferees.
” It has been noticed over time that, where as the real estate and automobile sectors is growing at double digit rate, persons acquiring the property were not declaring or paying tax on the income used to acquire such property” the public notice states. I asked URA Commissioner Allen Kagina about this on Friday and she was categorical that it was for information purposes. So if you buy property or sale property the tax collector wants to know how you earn your money. After all if you are doing large purchases- you must own a business or some source of income that is potentially taxable.
We can have a debate on this but this move has far reaching implications ( mostly positive) for the tax bracket. The notice No 700 is effective from 20th of June. A high five to URA. For one it means that folks ( whose dodgy income sources are a source of many of the investments we see in high rises and high end cars) who have money will now be less inclined to spend on brick and steel and on a business as a going concern to meet the tax collectors requirements. All this is good news in a bad economy.