ARTICLES

How to advance appointment and function of designated tax payers (withholding agents).

In a Legal Notice No. 8 of 2022[1] published in the Uganda Gazette, the Minister of Finance designated more taxpayers for purposes of withholding tax under Section 119 of the Income Tax Act. Technically, this action appointed about 4,780 new withholding tax payers, following from the previous notice in 2018[2]. This figure assumes that all taxpayers on the previous list were maintained. However, this may not be the case since some business have closed, other taxpayers now withholding tax exempt and others excluded for no longer qualifying.

The outstanding implication of being designated is that where any person or taxpayer on the list as a payer pays an amount in aggregate exceeding Ug. Shs, 1,000,000 (one million Uganda shillings) for a supply of goods or materials of any kind or services of any kind, the payer shall withhold tax on the gross amount of the payment rate at the rate prescribed by the Act.

The amount withheld is creditable from whom it is withheld. The agent issues tax credit certificate for the payee.

The list is only published in the Uganda Gazette and should also appear in the schedules of the current issue of the Income Tax Act and it is expected that the taxpayers have been lawfully notified and must comply. The list is also published online, or shared informally on social media, however, the most recent reprint of tax laws available on URA website is July 2021.

The downside of being listed a designated payer is in Section 124 of the Income Tax Act.

A withholding payer who fails to withhold the tax in accordance with the laws is personally liable to the amount of tax which has not been withheld, but the withholding payer is entitled to recover this amount from the payee[3]. The tax payable is categorized as a tax[4], meaning other penalties or implications apply.

The criteria used to determine that one should be a designated payer remains a mystery as it is not availed to the public or detailed in the legal notice published.

There is a possibility of exemption from withholding tax, meaning designated payers do not have to withhold from. However, for some, it may be practically easier to go through a needle’s eye than get on to the withholding exemption list. Others who have been on the list are eventually dropped without explanation on how the decision was reached. It is indeed a privilege to appear on the exemption list.

Prospects of the withholding tax regime.

A good tax system meets five principles or basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease.[5]

The application of withholding tax is an ingenious way to collect tax and enable compliance. Upon ‘withholding’ the tax and remitting the payment to the revenue authority, the payer issues a withholding tax certificate which the payee shall use to claim a tax credit for the payee. The entire procedure nurtures compliance by the payer and payee.

A designated payer will be compelled to engage with registered and/or tax compliant service providers. A taxpayer who is not compliant to their tax obligations will definitely shy away from transactions with a designated payer. It is expected that a tax compliant business is more ideal to deal with.

For the government and revenue authority, withholding of tax from payees helps tap into the informal sector of the economy. Transactions as low as Ug Shs 1,000,000 accommodate informal suppliers. Further withholding can be on a payee who is registered for tax or not.

Challenges of being designated a payer/withholding tax agent.

A designated payer has to devote more resources to collect the tax. The responsibilities of identifying liable payees and transactions, withholding and remitting payments, issuing, delivering tax credit certificates and keeping records for the payee, is more work.

There is an arbitrariness, unpredictability and randomness to appearing on the list of designated payers. There is no clear criteria available to the public considered for selection and so a taxpayer cannot anticipate when, how or why they are appointed.

The publishing by legal notice in the Gazette which, although it is the government newspaper, is not widely circulated, and if anything it is an archaic form of passing on information.

The process of engaging suppliers of goods and services is contractual and new obligations definitely affect prices already agreed. The application of withholding tax may affect agreed prices between the payer and payee.

In some instances the practicability of withholding is tasking in situations where a designated payer or agent purchases from the open market e.g. a supermarket or hardware shop. This is a challenge particularly for items not available in certain places and upcountry supplies.

Where the payer is also designated for withholding VAT, they end up having to withhold 12%.

Gaps in the withholding tax regime.

One of the tenets of a good tax system is transparency and simplicity on all sides, the revenue authority and taxpayers. Taxes are a creature of statutes whose interpretation should be consistent for all the parties involved. This implies the statute ought to be clear, predictable and strict clauses for consistent interpretation.

The current legal regime on appointment of withholding tax payers is clearly lacking.

1. There is need for a clear criterion as to what qualifies a taxpayer to be designated a payer so as to prepare parties for compliance. This shall assist the revenue authority to enforce collection of tax not withheld. Yes ignorance of the law is not a defence, but the appointee owes the courtesy of informing persons of their new obligations.

2. There is need for clarity of the effective date for beginning of collection. There should be a timeline or grace period within which a newly appointed payer notifies, renegotiates and or replaces services providers/payees in order to comply with new requirements.

3. Taxpayer education and sensitization is necessary. There is an assumption that designated payers know their obligations which is not always the case, especially where not enough emphasis is made to inform the new payer of their new duties.

4. Coupled with earlier concerns on effectiveness and timelines, there is need for provision on how the revenue authority can support a payer to recover tax not withheld.

5. There is need for incentives for compliance by a payer. Notably, the regime of withholding tax comprises a taxpayer collecting tax on the revenue authority’s behalf. However, no tools or benefits are given to the payer to carry out this duty.

6. The method of notice or communicating that a person has been designated needs to be widely circulated for effectiveness. Thereafter, it is prudent that induction of appointed payers to acquaint them of their new duties.

Finally, the Taxpayer Charter rightly recognizes taxpayers as viable partners in the collection of tax and development of the economy[6]. Taxpayers need to know in advance not necessarily always after they have defaulted.

Appointment of designated payers (withholding tax agents) need not be by ambush. Taxpayer participation and education should be emphasized as it eases ability to collect tax and lends credence to value of the taxpayer.

[1] Income Tax (Designation of Payers) Notice, 2022, Legal Notice No. 8 of 2022

[2] Income Tax (Designation of Payers) Notice, 2013, Legal Notice No. 13 of 2018, revoked by Legal Notice 8/2022.

[3] Section 124(1) of the Income Tax Act, Cap. 340 Laws of Uganda as Amended.

[4] Section 124(2) of the Income Tax Act.

[5] Taxation Handbook, A Guide to Taxation in Uganda, 4^th Edition, 2022, 10.02.2022, page 14.

[6] Ibid, page 23, 24.

Registration and Compliance Requirements for NGO Registration in Uganda.

Regulation of civil society and Non-Government Organisations (NGOs) in Uganda is under the NGO Act of 2016 establishing the NGO Bureau of Uganda which provides compliance requirements for NGOs in Uganda.

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Types of NGOs recognized in Uganda:

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1. Indigenous or Local NGO – organisation founded and controlled by Ugandan Citizens. In some instances, the control can be attributed to Ugandans whereas founded by foreigners.

2. Foreign NGO – incorporated outside Uganda, controlled by non-citizens of Uganda or East African Community (EAC) member countries operating in Uganda under permit issued by Bureau.

3. International NGO – incorporated outside Uganda and EAC, wholly or partially controlled by citizens of countries other than Uganda or EAC.

4. Regional organisation – incorporated in one or more of the Partner States of the East African Community, partially or wholly controlled by Citizens of one or more of the EAC states and operating in Uganda under permit issued by the Bureau.

Key Institutions that regulate NGOs:

The overall regulating body is the NGO Bureau to which every organisation must be registered. The bureau makes decisions through NGO Bureau Board appointed by the Minister of Internal Affairs.

Below the board is the Executive Director NGO Bureau in charge of the Day-to-day activities of the running of the bureau.

At Local government level, is a District NGO Monitoring Committee (DNMC) which is comprised of:

1. The Chief Administrative Officer (CAO) who is the chairperson of the committee;

2. The District Community Development Officer (DCDO) who is the secretary to the

3. The District Health Officer(DHO);

4. The District Internal Security Officer (DISO);

5. Resident District Commissioner (RDC);

6. A representative of NGOs in the district;

7. The District Education Officer (DEO); and

8. The Secretary for Gender and Community Services.

The primary role of the DNMC is to recommend NGOs to the Bureau for registration and provides a supervisory role in the event of inspection of a locally operating NGO.

Below the DNMC is a Sub-County NGO Monitoring Committee (SNMC) comprised of:

1. The Senior Assistant Secretary who is the Chairperson of the committee;

2. Sub-County Community Development Officer (CDO) of the sub county who is the Secretary to the committee;

3. The sub-county Health Inspector;

4. The Gombolola Internal Security Officer (GISO) and

5. A representative of organizations in the sub-county.

The SNMC primarily recommends for registration and conducts monitoring of the work of the NGO on ground.

Important requirements the NGO Must achieve:

These requirements cut across different laws and structures. They include:

1. Incorporation to operate in Uganda as a company limited by guarantee with the Registrar of Companies (Uganda Registration Services Bureau).

2. Registration with the NGO Bureau to operate in Uganda. A certificate is provided and a permit for each year of operation.

3. Every NGO has an obligation to follow conditions set in the permit as it operates. Failure to follow these conditions will result into punishment of the organization or the directors or officers of the organization. The failure can also result into closure of the organisation or suspension of the permit.

4. Carry out what was specified in its constitution.

5. Operate within its area specified in the permit. If there is need to expand, the NGO must inform the Bureau.

6. Apply for renewal of its permit within 6 months before it expires.

7. Sign an MOU with the district(s) where it operates.

8. Notify/inform the DNMC of the activities before conducting the activity.

9. The NGO Must not engage in acts prejudicial to national security.

10. The organization MUST file annual returns to the NGO Bureau every year.

11. If the organization is employing any person who is not a citizen of Uganda, the organization should ensure such a person has a valid work permit allowing such a person to work in Uganda.

How to Register as an NGO:

The proposed name is reserved with Uganda Registration Services Bureau (URSB).

The NGO then develops a constitution which is reduced into a Memorandum and Articles of Association (MEMARTS).

MEMARTS, details of members, directors and secretary, address of the organisation are registered into a company limited by Guarantee at the URSB.

• Fees are required for payment at registration of Company limited by Guarantee for items such as:

  • Reservation of Name,

  • Form for Appointing Directors and Secretaries,

  • Form providing address of the Company Form for Registration,

  • Registration Fees

  • Stamp Duty,

  • Bank Charges.

Then NGO must fill the application form as provided in the NGO Regulations, pay application fees, and apply to the NGO bureau with the following:

1. Application for registration by completing Form A as prescribed in the Schedule;

2. A certified copy of the certificate of incorporation;

3. A copy of the organization’s constitution or governing documents;

4. A chart showing the governance structure of the organization;

5. Proof of payment of the prescribed fees

6. Proof of source of funding of the activities of the organization;

7. A copy of a valid identification document for at least two founder members;

8. Minutes of a meeting of members or the governing body authoring the organization to register with the Bureau;

9. A resolution of members (or governing body) authorizing the organization to register with the Bureau;

10. A statement complying with section 45 of the Act showing the organogram of the organization, the requirements for employment of non-Ugandans and how non-Ugandans will be replaced with Ugandan counterparts in cases where the organization employs non-Ugandans;

11. Recommendations from DNMC where organization’s headquarters are located and from the responsible ministry or government department; and

12. Any statements that the minister may require through a regulation.

13. After fulfilling the above, the NGO Bureau shall register the NGO.

14. A registered NGO will be given a certificate of registration (Form B of the regulations).

Once registered, the NGO will remain registered unless the registration has been cancelled by the Bureau (for one of the reasons provided for by the law) or if the organization voluntarily applies for deregistration or if it is wound up and dissolved.

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Registration where organisation has been incorporated outside Uganda - International NGO:

An organization incorporated outside Uganda, which intends to operate in Uganda, must apply to the Bureau to be registered and issued with a permit. The organization shall fill the application form in Form N of the regulations accompanied by:

1. a reservation of name from URSB;

2. a certified copy of certificate of incorporation from the country of incorporation;

3. a certified copy of its constitution, or charter or documents governing the organization;

4. a resolution authorizing registration in Uganda;

5. a certificate of good conduct of at least two members;

6. a curriculum vitae of at least two members;

7. a recommendation from their government or missions accredited to Uganda from their home country;

8. a recommendation from the Ministry of Foreign Affairs of Uganda; and

9. Proof of payment of prescribed fees. (Registration fees of a foreign organization is Uganda shillings 520,000).

The organization incorporated outside Uganda may be required to fulfil other conditions such as those relating to registration of Ugandan organizations.

Upon registration, the NGO must provide annual reports and documentation as detailed below.

Key documents and returns to be filed by NGO Annually:

Uganda Registration Services Bureau (Registry of Companies):

1. Annual Return of company limited by guarantee – Form A.10.

2. Copy of recent audited books of accounts certified by a public accountant (CPA).

3. Notice of any change of directors or secretaries.

4. Company resolutions, special and ordinary resolutions,

NGO Bureau:

1. Annual Return – Form R.

2. A copy of audited book of accounts of the organization.

3. A copy of the Annual Report of activities.

4. Minutes of a general assembly or governing body of the NGO.

5. Proof of payment of prescribed fees.

6. May also be required to provide information on sources of income, estimates and budgets.

Local Government:

1. Budget and estimates

2. Estimates of Income and expenditure statement (submitted to district technical committee and DMNC).

3. Work plan (submitted to district technical committee and DMNC)

4. Sources of funding; and

5. Any other information that may be required.

Uganda Revenue Authority (where applicable):

1. Provisional income tax returns.

2. Income tax returns.

3. Value Added Tax returns

4. Pay as You Earn Tax returns for (employees).

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NGO Fees

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ITEM

MATTER

FEES UGX Shilling

1 The application fees for registration of an indigenous organization- 100,000

2 The application fees for registration of a foreign organization -520,000

3 The application fees for registration of a continental organization -260,000

4 The application fees for registration of a regional organization - 100,000

5 The application fees for registration of an international organization - 800,000

6 Fees for issuance and renewal of a permit of indigenous organization or community Based Organization or regional organization every year. - 60,000

7 Fees for issuance and renewal of a permit of a continental organisation or foreign organisation or international organization every year. -400,000

8 Fees for application to review conditions of a permit.- 60,000

9 Fees to substitute certificate of registration or permit or any document in the register.- 60,000

10 Fees for a request of certified copy of a certificate or permit or any document in the register per copy. - 25,000

11 The application fees for registration of community based organization- 40,000

12 The application fees for registration of a self-regulatory organization- 60,000

13 Fees for filing annual returns of an organization other than community based organization - 50,000

14 Fees for filing annual returns of community based organization- 40,000

15 Fees for an inspection report - 50,000

16The application fees for search of the register and search report- 20,000

Company Registers and Duties of Company Secretary under The Companies Act, 1 of 2012 Laws of Uganda.

What registers should a company keep?

1. A register of holders of debentures to be kept at the registered office of the company. S. 98 (1)

2. A register of charges to be kept at the registered office of the company. S. 113(1)

3. A register of members to be kept at the registered office of the company except at another office or place of work agreed upon. S. 119(2)

4. A register of Director’s shareholding with related particulars as respects each director kept at the registered office of the company. S.215.

5. A register of Directors and Secretaries at the registered office of the company. S.228(1)

6. A branch register to be kept in any part of the commonwealth outside Uganda. S. 128(1)

The Act punishes defaults in the keeping of registers, permitting inspections or the taking of copies of registers. The penalties prescribed are fines on the Company and each officer in default. The fines range from Ug. Shs. 20,000,000/= to Ug. Shs. 100,000/=.

Some fines accrue on a daily basis for each day of default. In addition, some defaults are prescribed as criminal offences.

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Role of a company secretary in a public and private company

S.187 (1) of the Companies Act 1 of 2012 provides that every Company shall have a secretary.

It forbids a sole director from being a secretary. Therefore, it is mandatory that every company has a secretary except for a single member company (s. 187(3)).

A single-member company is one where one person owns all the shares in the private company.

S.190 provides for the qualifications of a Company Secretary in a public company in Uganda.

It provides that in a public company, a secretary should have requisite knowledge and experience to discharge the functions of a company secretary. He or she should be an advocate, a member of a body that appears to directors by virtue of the position held to be capable, or he or she should belong to an institute of Chartered public Accountants in Uganda or Institute of Chartered Secretaries and Administrators.

Role and duty of the Company Secretary

Article 10 of Table F provides for the role of the Company secretary.

Sub-article (1) provides that the secretary shall have a pivotal role in corporate governance. In detail:

1. Issuing notices of the Board and general meetings to the Directors and shareholders respectively.

2. Taking minutes of the board meetings and general meetings.

3. Countersigning company documents with the Directors of the company.

4. Making the statutory filings of the company at the Companies Registry.

5. Keeping the company’s statutory books and registers.

6. The company secretary is mandated to provide directors individually and collectively with detailed guidance on discharging their responsibilities.

7. The secretary’s role is to induct or participate in the induction of directors;

8. Assist the chairperson and the chief executive officer in setting the annual board plan;

9. Administer other strategic board-level matters,

10. Provide a central source of guidance on ethics and good governance

Table F (Article 1(4)) of the Companies Act, the board (board of directors) can delegate some powers to management and therefore this may include delegation to the secretary.

Table F sets out the code of corporate governance, a model for companies. It is mandatory for public companies.

A list of resolutions that can be made by the various organs of the company

The annual general meeting shall be held each year by public or private company. S.138.

All general meetings other than annual general meetings shall be called extraordinary general meetings.

The AGM is held within 18 months from the date of incorporation. A return must be filed after this meeting. (S.138 (3)). Each subsequent year, the company shall hold an annual general meeting and it shall be not more than 15 months apart.

Decisions passed or made at meetings are called resolutions. Resolutions are in categories;

1. Ordinary resolutions,

2. Special resolutions which are provided for by the Act clearly and passed at a general meeting; and

3. Board resolutions which comprise decision passed by the board of directors’ meeting.

All business that is transacted at an extraordinary general meeting, and also at an annual general meeting shall be special. Article 9 of Table A.

All meetings must have quorum. 3 members is quorum in normal circumstances. In exceptional circumstance, quorum may be or less. Article 10(1) & (2)

Any notice shall for a meeting shall not be less than 21 days and it shall be in writing. S.140

Resolutions that can be passed by the general meeting or extra-ordinary meetings.

1. Special resolution to alter memorandum of association S. 10.

2. Special resolution to alter articles of association. S.16.

3. Special resolution to re-register a public company as private. S. 33.

4. Special resolution for reduction of share capital. S.76

5. Ordinary resolution for appointing auditors and remuneration of auditors. S.167.

6. Special resolution of limited liability Company making liability of directors unlimited. S.167

7. Special resolution to authorize amalgamation of a company. S. 241(4)(a)

Other duties that in our opinion, the Company secretary ought to consider;

1. Facilitate the Board in performing their responsibilities to the Company.

2. Support the Board to operate effectively and efficiently i.e. by having an annual plan & budget approved and complied.

3. Coordinate Board Strategic level matters and make the Board of Directors perform.

4. Ensure statutory compliance by the company for instance licenses and tax compliance.

5. Highlight issues relating to reputational risk and advise management.

Taxes in Uganda.

Income tax

This is tax imposed on a person’s taxable income at specific rates. A person includes an individual, company, partnership, trustee, Government and sub divisions of Government. Income tax is charged on every person who has chargeable income for each year of income. Chargeable income is derived from three main types of income, namely; business, employment and property.

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Withholding Tax

This is a system of collecting tax by a withholding agent on a specified range of payments.

These include: (i) Employment income (ii) International payments (iii) Payments to non-resident Contractors or professionals (iv) Payments on dividends (v) Payment for Goods and services by Governnment, Government institutions and designated withholding agents (vi) Payments on professional fees (vii) Payment on imports

The Income Tax Act Cap 340 specifies the persons who are required to withhold the tax as well as those upon whom the tax should be imposed, depending on the nature of the transaction. This tax is deducted at source by a withholding agent upon making payment to another person. A withholding agent is the person making payment and obliged to withhold tax; and the recipient of the payment is the payee.

Value Added Tax (VAT)

This is an indirect tax that is paid by a person who consumes or imports goods and/or services in Uganda. The Tax is charged on the value added at different stages of production or supply of goods and services. VAT was introduced in Uganda in July 1996 to replace Sales Tax and Commercial Transactions Levy (CTL). VAT is administered under the Value Added Tax (VAT) Act.

Output Tax

This is the VAT a taxable person charges upon making taxable supplies i.e. tax charged upon selling taxable goods and services.

Input Tax

This is the VAT a taxable person is charged on taxable purchases and expenses incurred for business purposes. The purchases could be from local sources or imported.

Taxable Supply

This is a supply of goods and/or services other than an exempt supply, by a taxable person for a consideration.VAT is charged on a taxable supply at either zero rate or standard rate.

Excise Duty Tax

Excise duty is a tax on consumption of specified goods and services. It is imposed to protect revenue resources as domestic production replaced importation and regulate consumption of certain goods with negative health implications like spirit and cigarettes. It is in respect to the supply of specified locally manufactured goods and provision of specified services in Uganda. It is also levied on specified imported goods.

Non-Tax Revenue (NTR)

This refers to duties, fees, and levies that are charged by Government for the provision of specific services and penalties for specified offences.

Non-Tax Revenues in Uganda (NTR) are imposed by specific Acts of Parliament and administered by ministries and other government departments.

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The NTR directly administered by URA includes:

• Stamp duty and

• Motor vehicle transaction fees these include: registration fees, change of ownership fees, duplicate fees , alteration fees, re-registration fees, OTV fees, cancellation and endorsement fees, search and certification.

• Passport fees

• Work permit fees

• Court fees and fines

• Traffic Express penalties

• Land transfer fees

• Royalties

• Business and Company registration fees

• Tender fees

• Permit fees

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Procedures and Processes of Taxation in Uganda

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E-tax.

URA, through its modernisation process, has introduced a new eTAX system to cater for registration of taxpayers, filing of returns, assessments and payment of taxes. eTAX is a name given to an Integrated Tax Administration System that provides online services to the taxpayer on a 24 hour basis. To pay tax in Uganda, you are required to register for a TIN (Tax Identification Number).

E – Filing

A taxpayer registered with URA for any tax type as the only source of income other than employment has an obligation to submit a return for the tax period defined by the respective tax law. URA has facilitated the taxpayer to fulfill this obligation by introducing electronic filing in of TAX The taxpayer can obtain a return from the web poortal (http:// ura.go.ug), save a template on any storage devise, take time to fill in the return and validate the return before they finally upload it on thhe web portal. If the upload is successful, the taxpayer will receive an auto generated e-acknowledgement receipt which is evidence of submission. In casse of any problems in filling the respective returns, do not hesitate to send an email about the challenge to URA on the email address; services@ura.go.ug or call the toll free lines

E – Payment

A taxpayer required to make payments to URA for any tax type can do so using the new e payment process. All the taxpayer needs to do is to go onto the URA web portal (http://ura. go.ug), access the payment registration slip, register the payment and go to the bank to make the actual payment over the counter. The taxpayer in future may even not need to go to the bank as such facilities like , MTN mobile money will be enabled per use e.g apply to tax payments.

The Legality of Taxes collected by the Central Government of Uganda

Articles 152 (i) of the Uganda Constitution provides that “No tax shall be imposed except under the authority of an Act of Parliament”.

The Uganda Revenue Authority Act Cap 196 was put in place to provide the administrative framework in which taxes under various Acts are collected. The Uganda Revenue Authority administers the tax laws (Acts) on behalf of the Ministry of Finance, Planning and Economic Development under the following legislation regulating taxes:

1. Customs Tariff Act. Cap 337.

2. East African Customs Management Acct

3. Excise Tariff Act Cap 338.

4. Income Tax Act Cap 340

5. Stamps Act Cap 342

6. Traffic and Road Safety Act Cap 361

7. Value Added Tax Act Cap 349

8. The Finance Acts.

9. All other taxes and non-tax revenue as the Minister responsible for Finance may prescribe.

Direct and Indirect Taxes in Uganda

Taxes are classified as either direct or indirect.

Direct Taxes are imposed on income arising from business, employment, property and the burden of the tax is borne by the individual or business entity. Examples of direct taxes include Corporation tax, Individual Income Tax, e.g. Pay As You Earn, capital gains tax and rental tax.

Indirect Taxes are taxes levied on the consumption of goods and services collected by an Agent (Taxpayer). Notable indirect taxes include Value Added Taxes (VAT), excise duty, import duty.

Land Ownership under the laws of Uganda

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Article 237 (3) of the Constitution provides that land in Uganda shall be owned in accordance with the tenure systems. These are:

1. customary,

2. freehold,

3. mailo and

4. leasehold:

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• Ugandan citizens may own land under any tenure.

• Non - citizens of Uganda may only own land under lease for up to 99 years.

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All Ugandan citizens owning land under customary tenure may acquire certificates of ownership in a manner prescribed by Parliament.

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Article 237 (9) of the Constitution provides that Parliament shall enact a law regulating the relationship between the lawful or bona fide occupants of land and the registered owners of that land and that for acquisition of registrable interest in the land by the occupant. These laws are the Registration of Titles Act, The Land Act and Regulations made thereunder.

Land must be registered in the names of the owner.

For one to be safe, you must have a registered title and it is very important when you are in possession.

Always demand for Certificate of Title and such title can be confirmed to be genuine.

One may need to caveat their land to stop unscrupulous people from transferring it.

Procedures of registration of land:

All procedures for land registration to acquire legal ownership of land must be followed.

Leasehold Land Title

• The applicant must have possession of, fully completed forms, a set of three authentic deed plans, three passport photographs, receipts of payment and a forwarding letter requesting for Leasehold title signed by the District Land Officer of the respective district where the land is located.

• The applicant must present a full set of original documents and a photocopy of the same, to the Department of Land Administration for checking.

• The documents are forwarded to the Department of Land Registration for preparation and issuance of lease agreements.

• The applicant must present fully signed and sealed lease documents by the District Land Board Chairperson and Secretary and lease agreements embossed by URA.

• The applicant must present the photocopy given by the Department of Land Registration stamped ‘Received’ and identification documents on collecting the leasehold title.

Mailo Land Title

• The applicant must have in possession a fully completed set of transfer forms which include a transfer form and two consent forms, a photocopy of the duplicate certificate of title, and two authentic Passport photographs of the buyer and seller.

• The applicant must present the documents to the Valuation Division for valuation assessment for stamp duty.

• The applicant must pay the fees in the bank, get a receipt, and his/her transfer form embossed. Submit all documentation together with the duplicate Certificate of Title, receipts and photocopies of all documents to the Mailo Registry.

• The photocopy is stamped ‘Received’.

• The applicant must present identification documents and photocopies to collect the duplicate Certificate of Title.

• The applicant signs for the title and the photocopy is stamped ‘Returned’ on completion.

Freehold Land Title

• The applicant must have in his/her possession fully completed forms, a set of three authentic deed plans, three passport photographs, receipts of payment and a forwarding letter requesting for a freehold title signed by the District Land Officer of the respective district where the land is located. The Applicant must present the full set of original documents in duplicate and a photocopy of the same, to the Department of Land Administration for checking.

• Once approved, the documents are forwarded to the Department of Land Registration for issuance of a freehold land title.

• The applicant presents the photocopy given by the Department of Land Administration stamped ‘Received’ and identification documents on collecting the freehold title.

Kibanja

• Where it is a Kibanja holder, it means there is a landlord.

• So you need to know the landlord and start processing how to acquire the interests.

• If the landlord is not willing to sell to you and you are a bona fide occupant, you can get formal interest on the land. You can do this by way of acquiring a certificate of occupancy as provided for under the Land Act,”

EMPLOYMENT IN UGANDA

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Employment in Uganda is governed by the Employment Act and other labour laws in Uganda.

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Employment concerns engagement of employees to work under a contract of services. Employment does not include employment contractors or independent contractors.

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Independent contractors or Contract for Services

An independent contractor is one engaged under a contract for services. Such individuals are not defined or regulated under the Employment Act. The court in Uganda in Meera Investments Ltd v Andrea T/A Wipfler Designer and Co Ltd, H.C.C.S. No. 28 of 2004 defined an independent contract as one who is entrusted to undertake a specific project but who is left free to do the assigned work and to choose the method for accomplishing it.

In effect, an independent contractor:

1. Does not have benefits such as National Social Security Fund - NSSF.

2. Their payments are subject to 6% Withholding Tax which is deducted on payment under Section 118A of the Income Tax Act unless they are exempt.

3. They are subject to 18% VAT under the Value Added Tax Act.

Employment/Employees relationship or Contract of Services

An employee is defined by Section 2 of the Employment Act, 2006 as any person who has entered into a contract of service or an apprenticeship.

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The characteristics of an employee are:

1. Benefits such as lunch, medical insurance, allowances.

2. A substantial degree of control such as supervision, code of conduct and ethics and a schedule and dictates how work is done.

3. Paid salary which is subject to PAYE and NSSF.

4. Works exclusively for the employer.

5. Work done by an employee is an integral part of the business.

6. The contract is characterized as a contract of services (employment).

7. The employer is under an obligation to provide work and the employee is under obligation to do the work.

Employees must pay a tax known as Pay As You Earn Tax.

Pay As You Earn (PAYE) is a tax charged on all employees earning a monthly salary income above the stated threshold as per Section 19(1) of the Income Tax Act.

Employees earning income not exceeding Ugx 235,000 per month are not subject to PAYE. Therefore, persons employed and earning above this threshold are subject to PAYE.

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Employees are subject to NSSF deductions.

Section 11(a) of the National Social Security Fund Act provides that:

Subject to this section, on and after the appointed day, every contributing employer shall, for every month during which he or she pays wages to an eligible employee, pay to the fund, within fifteen days next following the last day of the month for which the relevant wages are paid, a standard contribution of 15 percent calculated on the total wages paid during that month to that employee.

Therefore, the employer will be required to deduct and remit the 15% requirement NSSF contribution within 15 days of the month following the month for which salary was paid.

This 15% comprises 10% contribution from the employer and 5% contribution from the employee under Sections 12(1) and 13(1) of the NSSF Act.

PROCEDURE FOR OBTAINING LICENSE FOR NEW PRIVATE EDUCATION INSTITUTION OR SCHOOL.

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Once the proprietor is granted permission in writing by the Permanent Secretary Ministry of Education, to start and operate a school, he/she must put up buildings in accordance with the level and type of school/institution he/she has in mind.

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The procedure for licensing a private school/institution is as follows:-

1. Proprietor collects forms for licensing from MoES HQ/district/Municipal Education Office and fills them in triplicate following requirements as listed above.

2. The proprietor seeks inspection of the school/institution by DIS/MIS and D/MHI to assess compliance with the requirements.

3. The District/Municipal Inspectors of Schools (D/MIS) and District/Municipal Health Inspectors (D/MHI) after inspection write detailed inspection reports, and endorse the application forms and forwards to DEO/MEO to endorse application form as well.

4. The District/Municipal Education Officer forwards (3) three copies of the application forms and the relevant supporting documents on (3) three files to the PS/ES (in case of post primary) and CAO/Town Clerk (in case of Primary).

5. The PS/ES (in case of post primary), CAO/Town Clerk (in case of primary), basing on the reports or recommendations from the district or a report following a physical inspection by the inspectors, approves or rejects the application for licensing.

6. The PS/ES/ CAO/Town Clerk upon approval awards an operational licence to the school/institution to last for (2) two school years as stipulated in Section 32 of the Education –( Pre- Primary , Primary and Post- Primary) Act 2008, and copies of the licence are also sent to the Director for Directorate of Education Standards, District/Municipal Education Officer, and District/Municipal Inspector of Schools.

7. MoES/DEO/MEO retains one file; the second file is for the DEO (in case of post primary) and the third file is for the school. Proprietor ensures that the school is given a copy.

8. Six months to the expiry of the two-year licence, the proprietor collects from the MoES (Headquarter), District/Municipal Education Offices a form for Registration.

9. In case the school does not qualify for registration, the proprietor must apply for renewal of license within one month of expiry of the license and it is granted once. License renewal is for one year only. If at the end of the year renewal the proprietor is not ready to register the school, it will be closed summarily by PS/ES.

10. All new schools/institutions should start at the beginning of the academic year as set out in the schools/institutions calendar issued from time to time by the Ministry of Education and Sports.

11. Applications for licensing schools, such as Pre – Primary, Primary and Secondary schools, should therefore be submitted to the PS/ES /CAO/Town Clerk starting from June. Licenses will be issued by the 30th December so that schools can start in January or February of the preceding year.

12. The proprietor must provide copies of the occupancy permit for the school structures.

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Note:

1. All the above apply to one site only. Any new/subsequent sites/extensions MUST be processed separately and independently.

2. The school opens to the general public at the beginning of the calendar year.

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CHECKLIST OF REQUIREMENTS FOR OPERATION OF A NEW EDUCATION INSTITUTION OR SCHOOL IN UGANDA

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NB: Requirements (To be filed in 3 PLASTIC SPRING FILES)

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• Application form duly signed by District Health Inspector, D.I.S and D.E.O

• Land Title/Sales agreements

• Tenants Agreements: Not less than 4 years

• Bank statement and proof of financing (recent 3 months)

• Staff Certificate (photocopies verified by Teacher Instructional and Training Department – floor legacy Towers) NB: Original copies of teachers’ registration certificates to be provided and photocopies of National Identity Cards

• Partnership Dees/Articles of Association

• Proprietor’s CV’s and photograph (s)

• L.C III Recommendation Letter

• Head teacher’s CV’s and photograph

• Site layout (to be technically drawn and approved)

• Signed -Appointment letters/contracts for all teaching and non-teaching staff & acceptance letter for each staff.

• School rules/Code of conduct approved by the BOG’s and/or Management Committee

• Proprietors photograph

• Detailed School Inspector’s Report

• Detailed School Inspector’s Report

• 3 Referees, men or women of standing in society from the school eg: LC.1 chairperson, LC 1 secretary for Education and a local religious/opinion leader

• L.C III Chairperson’s letter confirming that the school is within the sub-county education plan.

• Photographs of the children/pupils/students showing:

  • Children on assembly

  • Children in class

  • Empty classes

  • Children in co-curricular activities.