The Uganda Revenue Authority (URA) has urged landlords to voluntarily declare their properties and register for rental income tax to avoid penalties for non-compliance.
Isaac Aijuka, the Acting Supervisor of Tax Education Outreach in South Western Uganda, made this appeal while addressing landlords in Mbarara and Lyantonde.
“URA has a voluntary disclosure program through which you can declare your rental properties,” Aijuka stated. “You must declare all the rooms from which you receive rent, whether in Uganda or abroad. If URA discovers undeclared properties through its intelligence, you will face substantial penalties.”
Aijuka explained that rental income tax is levied on immovable property and that landlords are responsible for self-declaring their expected rental earnings for the financial year. He also provided practical calculations to illustrate how URA determines rental income tax.
Additionally, he advised property owners to maintain records of rental payments, emphasizing their importance when filing a provisional rental income tax return within the first three months of the financial year.
“Rental payment records help determine how much you will collect by year-end,” Aijuka stressed. “If you file a final tax return without proper records, URA will assess your tax forcefully, which we do not prefer. We encourage voluntary compliance.”
During the meeting, Samuel Tayebwa, the Mbarara City Principal Tax Officer, clarified the difference between rental income tax and property tax.
“Rental income tax is charged by URA on the rent earned from letting a property, while property tax is levied by the city council on buildings within the city,” he explained.
