Uganda Revenue Authority (URA) is enhancing the power of technology to start collecting VAT from non-resident service providers operating in Uganda including Netflix, Apple Music, Amazon and Facebook that is still limited and is only accessible via VPN.
Collection of VAT from these companies is starting effective July 1, 2022 and will focus on all electronic service providers. Others are Netflix, Amazon, Uber, and the like. John Musinguzi, URA commissioner general says that collection of this tax has been delayed by the lengthy discussions with these companies, but they agreed and have been finalized, then other levies will follow as time goes on.
Without detailing how much is expected as well as the enforcement mechanism in case of non-compliance, Musinguzi says the authority has finalized all the digital infrastructure required to effectively collect this tax.
Under section 16 (2) of the VAT Act, a non-resident person who supplies electronic services to a non-taxable person in Uganda makes a taxable supply. Such a supplier is therefore required to charge VAT on the supply, file quarterly returns, and pay VAT due on supply within fifteen days from the end of each quarter.
Such companies include those websites, web hosting software companies, and those supplying images, text and information, self-education packages, music films including gambling, and other broadcasts and events, as well as those on remote maintenance of programs and equipment.
