Edgar Mukasa
On the 3rd day of Christmas, I have attempted to demystify the notice to show cause as issued to especially expatriates requesting them to regularise their tax affairs to correct any errors or omissions in their tax declarations.
On 31st July 2025, Uganda enacted the convention on Mutual Administrative Assistance and Cooperation (MAAC) implementation Act on Tax Matters.
The MAAC is a major international agreement for tax transparency and cooperation to facilitate various types of administrative assistance in tax matters such as automatic exchange of information, conducting simultaneous tax examinations, and aiding in the collection of tax debts between countries that are party to the convention.
As of 2025, over 150 countries have signed the convention which enables Uganda Revenue Authority (URA) access information on income sourced outside Uganda from all those jurisdictions.
According to the Ugandan Income Tax Act provisions, a resident person should pay tax on both incomes earned from within and outside Uganda. However, a few expatriates have only been accounting for taxes on income sourced in Uganda on the premise that they already remit taxes on that income in countries where it is sourced.
Under the circumstances, next steps to resolve this quagmire would include:
– Listing of all incomes earned from jurisdictions outside Uganda during the period under review with the corresponding taxes (if any) paid on that income.
– Review guidance on the tax treatment of incomes earned outside Uganda as per the Double Taxation Treaties (DTA) in place with source country, if any.
– Compute additional taxes payable to the Uganda Revenue Authority (if any) or prepare responses / context on why there isn’t any additional tax payable in that regard.
Ultimately, deep engagement will be required with the Uganda Revenue Authority to ensure that there is full understanding of the facts and circumstances in arriving at the declarations being made in this respect.
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Written by
Edgar is an Associate Director in KPMG Uganda with over 13 years experience working as a tax advisor in KPMG.
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