Mbarara, Uganda – The Uganda Revenue Authority (URA) has urged landlords across the country to declare their rental properties and register for rental income tax to avoid heavy fines.
Speaking at a tax sensitization meeting in Mbarara and Lyantonde, Isaac Aijuka, the Acting Supervisor for Tax Education Outreach in South Western Uganda, encouraged property owners to take advantage of URA’s voluntary disclosure programme.
“Declare all the rooms from which you receive rent, whether in Uganda or abroad,” Aijuka said. “If URA finds out through its intelligence network, you will face serious penalties.”
Understanding Rental Income Tax in Uganda
Rental income tax in Uganda is charged on money earned from renting out residential and commercial properties. Landlords must declare their expected rental income at the start of every financial year. URA calculates the tax based on these declarations, and landlords are advised to keep proper records to avoid forced tax assessments.
According to Samuel Tayebwa, the Principal Tax Officer for Mbarara City, rental income tax is different from property tax.
“Rental income tax is collected by URA on rent earned from a property, while property tax is charged by the city council on buildings within the city,” Tayebwa clarified.
How URA Tracks Undeclared Rental Properties
Despite rental income tax being in place, compliance among landlords remains low. Many landlords do not declare their rental earnings, causing revenue losses for the government. To address this, URA has strengthened enforcement using satellite images, utility data, and physical inspections to track undeclared properties.
Individuals who earn rental income are taxed at a rate of 12% after allowable expenses, while companies and other non-individuals pay 30% on profits from rental properties.
Benefits of Declaring Rental Income Early
URA’s voluntary disclosure programme allows landlords to report their rental income without penalties. This prevents audits, fines, and legal action.
“Keeping records of rental payments helps you avoid unnecessary tax assessments,” Aijuka said. “It’s better to comply voluntarily than to wait for URA to find out.”
The URA is also promoting the use of digital platforms where landlords can file their taxes, plan their payments, and understand their tax responsibilities with ease.
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Why This Matters
Rental income tax is an important revenue source for the government, funding infrastructure, health, and education. By complying with tax laws, landlords contribute to national development while avoiding financial and legal risks.
For more information, landlords are encouraged to visit the URA website or contact their nearest URA office.
