KAMPALA, September 4, 2024 — The national tax collector, the Uganda Revenue Authority [URA], and the local telecom giant MTN Uganda are embroiled in a quiet tax dispute worth billions of shillings. This is just one of the several tax disputes that URA has been engaged in as it tries to raise tax revenue to finance government programmes.
Just a few days Savings and Credit Cooperative Organisations [SACCOs] in Uganda were up in arms against the tax collector following a decision to collect withholding tax on members’ dividends. It would take the intervention of other agencies of government for the URA to stop charging this tax. This was communicated as per a July 4, 2024 internal memo to the Domestic Taxes Department where URA instructed its staff to “stay any compliance action relating to the recovery of withholding tax on dividends or any other distribution to members of SACCOs.” This means that URA today cannot require SACCOs to withhold tax on dividend distributions.
The latest edition of theCooperator Magazine has comprehensively explained why URA cannot impose withholding tax on the dividends of SACCO members.
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