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Buganda, URA clash over donations levy
Kabaka Ronald Muwenda Mutebi II (centre), his son Prince Junju (3rd right) and Katikkiro Charles Peter Mayiga (2nd right) receive gifts from kingdom subjects in Kayunga District in 2021. PHOTO/FILE
What you need to know:
- Buganda Kingdom documents show that they collected more than Shs1.5b in donations last year, which URA thinks should have been taxed.
Uganda Revenue Authority (URA) top officials are set to meet with Buganda officials following allegations that the government is planning to tax donations well-wishers offer to the kingdom.
The Buganda Kingdom’s spokesperson, Mr Israel Kazibwe, said the two parties would meet soon to iron out the differences about the taxation on donations.
“There were some scenarios that sparked Katikkiro’s fears but both parties have sought audience and they will discuss the matter,” Mr Kazibwe said in an interview on Wednesday.
A day earlier, the Buganda Prime Minister (Katikkiro), Mr Charles Peter Mayiga, while addressing guests at Bulange in Mengo, said he had received information that the central government, through URA, was targeting donations to the kingdom, commonly known in Luganda as Oluwalo, that are offered by the king’s subjects to sustain the kingdom.
The donors often visit the kingdom and give money and items to the king. Buganda Kingdom documents show that they collected more than Shs1.5b in donations last year.
Mr Mayiga said it was unfair to tax the kingdom’s donations which sustain its operations.
Mr Kazibwe told this publication that they got to know about it when one of the kingdom agencies that relies entirely on the Oluwalo wrote to URA for clearance of its operations but the tax collectors demanded them to present documentation that they had paid tax on the donations.
“One of the kingdom agencies was asked by URA to present documents including VAT (Value Added Tax) certificates on donations. So, Katikkiro was concerned about it and it is one of the reasons why he mentioned it on Tuesday,” Mr Kazibwe said.
According to Section 21(1) (J) of the Income Tax Act, the value of any property acquired by gifts is exempted from taxes.
“The following amounts are exempt from tax-the value of any property acquired by gift, bequest, devise or inheritance that is not included in business, employment or property income,” Section 21 (1) (J) reads.
A top official in URA, who was unwilling to speak on record yesterday, said Mr Mayiga’s statement could be inaccurate because the law exempts taxes on gifts.
He also confirmed the meeting with Buganda officials will be held soon.
In Katikkiro’s words
“It is extremely unjustified given the fact that the Kabaka renders the kind of services that actually the government should be carrying out like in education, health and fighting poverty,” Mr Mayiga said.
He added: “The churches and other religious institutions render tremendous service that is why offertory is exempt from taxation. We think the same should apply to the kind of money that the Kabaka receives from his people.”
He further said: “Of course the Kingdom companies pay taxes and we support and encourage them to ethically run as companies but the money brought in forms of voluntary contributions shouldn’t be looked at, that is my take.”
