In an effort to enhance tax compliance, the Uganda Revenue Authority (URA) has called on landlords across the country to voluntarily declare their properties and register for rental income tax.
The appeal, issued by URA officials, highlights the need for landlords to comply with tax regulations to avoid penalties for non-compliance.
This move is part of a broader initiative to strengthen tax collection and ensure that all income-generating activities, including rental income, are duly taxed. Landlords who fail to declare their properties and register for rental income tax risk facing significant fines and legal action.
While addressing landlords in Mbarara and Lyantonde, Isaac Aijuka, the Acting Supervisor of Tax Education Outreach for South Western Uganda, made a clear appeal for voluntary compliance with rental income tax regulations.
“URA has a voluntary disclosure program that allows you to declare your rental properties,” Aijuka stated.
He emphasized that landlords are required to declare all rooms from which they receive rental income, whether located in Uganda or abroad.
“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,” he warned.
Aijuka explained that rental income tax is levied on immovable property, and landlords are responsible for self-declaring their expected rental earnings for the financial year. To help landlords understand the process, he also provided practical examples of how URA calculates rental income tax.
In addition, he advised property owners to maintain accurate records of rental payments, stressing their importance when filing a provisional rental income tax return within the first three months of the financial year.
“Rental payment records are crucial for determining how much you will collect by the end of the year,” Aijuka explained. “If you file a final tax return without proper records, URA will assess your tax forcefully, which is not the preferred approach. We encourage voluntary compliance.”
During the meeting, Samuel Tayebwa, the Mbarara City Principal Tax Officer, further 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.
