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DEDUCTION ALLOWED TO PRIVATE EMPLOYERS EMPLOYING PERSONS WITH DISABILITIES

 



PRACTICE NOTES ISSUED UNDER SECTION 160 OF THE INCOME TAX ACT CAP 340

No. URA/IT/PN2/09: DEDUCTION ALLOWED TO PRIVATE EMPLOYERS EMPLOYING PERSONS WITH DISABILITIES

The Commissioner General of Uganda Revenue Authority hereby issues these Practice Notes under Section 160 of the Income Tax Act, Cap 340 for the guidance of officers of URA and the Public on the effective date as per the Income Tax (Amendment) Act 2008 under Section 22(1) (e) which allows as a deduction 15% of tax payable to all private employers who employ ten or more persons with disabilities. The practice notes also define key terms in the provision.

Section 22(1) (e) provides that “Private employers who employ ten or more persons with disabilities either as regular employees, apprentices or learners on full-time basis shall be entitled to tax deduction of 15% of all payable tax upon proof to the Uganda Revenue authority.”
Effective date of the amendment

This amendment applies to years of Income commencing on or after 1st July 2008.

Implication
of the amendment


A deduction of 15% of tax payable by a private employer who employs ten or more persons with disabilities shall be allowed in ascertaining chargeable income.

Illustration

If chargeable income ascertained of a corporate body is ………… 1,000,000

Tax thereon at 30%..........................................................................  300,000

15% deduction allowed …………………………………..15% × 300,000 = 45,000

Deduction under Section 22(1) (e) ……………..1,000,000-45,000 = 955,000

Tax thereon at 30% ………………………………………….30% × 955,000= 286,000
The meanings below shall be attached to the terms as in the provision:

“Apprentices
or learners on full time basis” means a person who has agreed to work for a skilled employer for a fixed period usually for a low wage in return for being taught that persons skill.

“Disability”
means a substantial functional limitation of daily life activities caused by physical, mental or sensory impairment which substantially limits one or more of the major life activities of that person. 

“Private employer” means an employer other than Government or Government controlled entities liable to income Tax.

Note

An entity partly owned by Government but to less than 51% stands to benefit from the deduction.

“Regular employees” means are following a constant definite pattern done or happening often, lasting or happening over a long period.



Allen Kagina (Mrs.)
Commissioner General