Is the new VAT law on donated goods, services a gift or burden?
The new law empowers the Uganda Revenue Authority (URA) to collect VAT on donated goods or services provided by employers to their employees, a move aimed at increasing the country's tax revenue.
The Value Added Tax Amendment Act 2024, recently signed into law by President Yoweri Museveni, has stirred a pot of mixed reactions among employees across various sectors.
The new law empowers the Uganda Revenue Authority (URA) to collect VAT on donated goods or services provided by employers to their employees, a move aimed at increasing the country’s tax revenue.
Martha Nankya, a marketing executive in a leading tech firm, expressed her concerns.
She said, “This new VAT law feels like a heavy burden. Gifts and bonuses from employers were a way of recognizing hard work, but now it seems like we’re being penalized for being appreciated.”
On the other hand, John Mwangi, an accountant at a multinational corporation, sees the logic behind the law.
“From a financial perspective, it’s about fairness. If businesses are getting tax breaks on donations to employees, it’s only fair that these benefits are taxed to maintain a balanced revenue system.”
The sentiments are echoed by Peter Okello, a teacher in a private school.
“As an educator, every little bonus or gift helps, especially with the rising cost of living. This VAT on donations feels like an additional pinch on our already stretched salaries.”
However, some employees view the law as a necessary step towards economic stability.
Jane Kiggundu, a healthcare worker, commented, “If this VAT helps the government provide better services and infrastructure, then perhaps it’s a sacrifice we need to make. But transparency on how these funds are used will be crucial.”
The corporate sector is also reacting to the new legislation. A spokesperson from a prominent media house, who requested anonymity, said, “While we understand the government’s need to increase revenue, this move might affect employee morale.”
He added that they hope there will be further discussions to find a balance that works for both employees and employers.
As the dust settles on the newly signed Value Added Tax Amendment Act 2024, it remains to be seen how this law will shape the financial landscape for both employers and employees in Uganda.
