Taxes payable by NGOs

Taxes payable by NGOs in Uganda

The Non Governmental Organisations Act which is the parent legislation on NGOs in Uganda is itself silent about taxation of NGOs. However, NGOs like any other organization are subject to the tax regime of Uganda.

Income tax

In respect to income tax, NGOs are charitable organizations and are exempt from payment of income tax. Under the Income tax act, income of an exempt organization is exempt from income tax. An NGO is an exempt organization under the Act. Income tax is that tax which is chargeable a persons income for a year of income. Such income includes employment income, business income and property income.

Customs duties

NGOs are also exempt from customs duties under the EAC-CMA which is the law that regulates customs in all the EAC partner states. Customs duty is that tax payable on imports or exports. With respect to imports, the specific tax payable is called import duty.  It is illegal to remove goods from a customs area at the Boarder entry point before they are duly reported and cleared. An owner or authorized agent (declarant) must on arrival at the customs boarder entry point declare to a customs officer the goods imported within 24 hours of arrival. However, NGOs are exempt from payment of customs duty on importation of goods for purposes of their operations. S. 114 of the EAC-CMA exempts from customs duty goods and equipment imported by international and regional organizations with diplomatic accreditation or bilateral or multilateral agreements with the partner states of the EAC for their official use.