Case file ITA-2018-AGRI1
Withholding tax of 1% on persons engaged in agriculture
Highest rung reached: Verified lawLaw: read in a statutory textWithholding · Compliance
1 point pending verification
- Whether the Minister designated any payer under s. 118E, and the section's later history.
Law
- Principal Act
- Income Tax Act (Cap 338), enacted as Act 11 of 1997
- Amending Act
- Income Tax (Amendment) Act 2018 (Act 7 of 2018) (verified)
- Provision, revised numbering (2023 revision)
- pending verification
- Provision, numbering before the revision
- s. 118E and Third Schedule, Part XII(1) of Cap. 340
- Principal Act dates
- commencement 1997-07-01
- Amending Act in force from
- 1 July 2018 (assented 21 June 2018; gazetted 29 June 2018)
- Tax heads and taxpayers affected
- Income tax, Withholding tax. Farmers selling produce.
- Status
- Legal: pending verification. Implementation: implemented.
| Section A: The law | |
|---|---|
| Amending Act | Income Tax (Amendment) Act 2018 (Act 7 of 2018) |
| In force from | 1 July 2018 |
| Assent | 21 June 2018 |
| Section B: What the law said before | |
| The wording before and after is set out in the redline below. | |
| *** END OF CHANGE SLIP *** | |
The redline
as at 2018-06-30
Not in the Act before this amendment: the amending Act inserted the provision.[ACT-ITA-2018-7, PDF page 8, s. 16]
as at 2018-07-01
Inserted: 118E. Withholding of tax on payments for agricultural supplies. A person who makes a gross payment for agricultural supplies in excess of one million shillings shall withhold tax on the gross amount of the payment at the rate prescribed in part XII of the Third Schedule, if the payer is designated by the Minister to withhold tax. [Third Schedule, Part XII] (1) The rate of withholding tax on payment of agricultural supplies is one percent of the gross amount of the payment.Verified law: Wording or a date read in a statutory text, with the version and page named.[ACT-ITA-2018-7, PDF page 8, ss. 16 and 19 (PDF pages 8 and 10)]
Act 7 of 2018 inserted s. 118E and Part XII. The tax applies only to payments above one million shillings, and only where the Minister designates the payer.
In plain English
Interpretation: A reading of the evidence, by a named source or by this register. A small withholding on payments to farmers was introduced to bring them into the tax net. The current Act exempts agricultural supplies from one withholding regime, so the measure's later fate needs checking.
Reason
Enhance tax compliance in the agricultural sector where most income earners are not paying any tax compared to other persons paying tax on relatively lower incomes
Official forecast: What MoFPED or URA said a measure would raise, or why it was made, before the year began. [MOF-CG-1819, printed page 7, PDF page 10]
Policy objective as classified by the register: Compliance. Intended revenue direction: raise.
Revenue
Amendment-level revenue contribution not reliably quantified.
- Rung 1
Observed change
Observed: A value or event as an official source records it, copied without calculation.- Collections for the tax heads affected are drawn on the story page, from URA's annual data books. Before and after is never presented as this amendment's effect.
- Rung 2
Official forecast
Official forecast: What MoFPED or URA said a measure would raise, or why it was made, before the year began.Missing. No official forecast for this measure was found in the budget documents or URA reports read. The budget speech and the Finance Bill memorandum for the year would settle it (MoFPED).
- Rung 3
Reported yield
Reported yield: What URA attributes to a measure after the year. An official attribution, not a causal estimate.- URA prints an achievement rate of 172.97 percent for FY2018/19 but no figure in shillings.[URA-ARR-1819, printed page 31, PDF page 37]
- Rung 4
Static or modelled estimate
Modelled estimate: A mechanical or model calculation, with every assumption shown.Missing. No estimate made. A static estimate needs the taxable base before the change (volumes or values by product), which the register does not hold.
- Rung 5
Causal estimate
Causal estimate: An effect identified by a stated research design against a comparison group.Missing. No study with a defensible identification strategy was found for this amendment.
- Rung 6
Wider impact
Interpretation: A reading of the evidence, by a named source or by this register.Missing. No source read for the register describes effects on prices, compliance cost, investment or equity.
What is known, what is uncertain, and what would settle it
- Known: reported yield.
- Uncertain: official forecast, static or modelled estimate, causal estimate, wider impact; and 1 open point below.
- Would settle it: Request to URA under the Access to Information Act 2005 for the policy measures performance annexes for FY2015/16 to FY2024/25, including 'Policy measures report fy 201819'. Held by Uganda Revenue Authority, Research, Planning and Development Division.
Pathway
From the amendment to its wider consequences. Select a link to read what supports it. No money is drawn along the chain, because no flow along it is measured.
Verified: A source read for the register documents this link.
The provision is read in the ULII consolidated text.
- amendment: verified. The provision is read in the ULII consolidated text.
- mechanism: verified. Tax collected at source by the payer.
- implementation: verified. URA reports performance for the measure, so it was applied.
- response: no evidence. No source read describes how taxpayers responded.
- outcome: hypothesised. URA reports only an achievement rate, without a figure.
- wider: no evidence. No source read measures wider effects. No evidence found is not evidence of no effect.
Consequences
Graded against ten criteria. No composite score: a reform that raises money can still be regressive or costly to comply with, and one that loses revenue can serve a legitimate aim. Revenue effectiveness is graded by a stated rule; the rest only where a source speaks to them.
What worked
No criterion graded effective on the evidence read.
What did not
No criterion graded ineffective or counterproductive on the evidence read.
Open or not evaluated
Revenue effectiveness
No pair of official forecast and reported yield in shillings.(graded by rule)
Not evaluated
Legal clarity and certainty
No source read for the register speaks to this criterion.
Not evaluated
Administrative feasibility
No source read for the register speaks to this criterion.
Not evaluated
Compliance cost
No source read for the register speaks to this criterion.
Not evaluated
Efficiency
No source read for the register speaks to this criterion.
Not evaluated
Investment and competitiveness
No source read for the register speaks to this criterion.
Not evaluated
Vertical and horizontal equity
No source read for the register speaks to this criterion.
Not evaluated
Distributional effect
No source read for the register speaks to this criterion.
Not evaluated
Implementation quality
No source read for the register speaks to this criterion.
Not evaluated
Unintended consequences
No source read for the register speaks to this criterion.
Not evaluated
Afterlife
Later changes, cases and practice
- Verified law: Wording or a date read in a statutory text, with the version and page named.The current Act excludes agricultural supplies from withholding on payments for goods and services (s. 136(5)(c)). Whether the 2018 measure was later removed, or sits elsewhere, is pending verification.[ULII-ITA-2024, PDF page 78, s. 136(5)(c)]
No Tax Appeals Tribunal or court decision on this provision is on record yet. That is not evidence that none exists.
Pending verification
- Whether the Minister designated any payer under s. 118E, and the section's later history.
Sources
MOF-CG-1819
Know Your Budget 2018: A Citizen's Guide to the Budget of FY 2018/19
Ministry of Finance, Planning and Economic Development. 2018-06. Covers FY2018/19.
Status: verified. Pages confirmed for this record in the source audit: 10 (PDF).
Fetched online and read page images of PDF pages 10 and 11 (printed pages 7 and 8). It summarises the budget speech; the speech itself was not read.
URA-ARR-1819
Annual Revenue Report FY 2018/19
Uganda Revenue Authority. 2019. Covers FY2018/19.
Desktop/Personal/URA DATA BOOKS AND REVENUE REPORTS/Annual Revenue Report FY 2018-19.pdf
Status: verified. Pages confirmed for this record in the source audit: 37 (PDF).
Figure 15 (PDF page 24, printed 18), Table 10 (PDF page 37, printed 31) and Table 11 (PDF page 38, printed 32) read from page images. The measure-level annex (A3) is an embedded Word file that is not in the PDF.
ULII-ITA-2024
Income Tax Act (Chapter 338), version of 23 December 2024
Uganda Legal Information Institute (ULII) and Laws.Africa, from the Law Reform Commission revision. 2024-12-23. Covers Text in force 23 December 2024 to 30 June 2025.
Desktop/Personal/Tax Legislation and URA Returns/Income Tax Act Cap 338.pdf
Status: verified. Pages confirmed for this record in the source audit: 78 (PDF).
Read in full with pdftotext. Lists amending Acts with commencement dates on PDF page 8. This version predates any 2025 amendment.
ACT-ITA-2018-7
Income Tax (Amendment) Act, 2018 (Act 7 of 2018)
Parliament of Uganda, published by the Uganda Printing and Publishing Corporation. 2018-06-29. Covers Assented 21 June 2018; in force 1 July 2018.
Desktop/Tax legislation Amendment Acts/Income Tax (Amendment) Act, 2018.pdf
Status: verified. Pages confirmed for this record in the source audit: 8 (PDF).
Acts Supplement No. 2 to the Uganda Gazette No. 33, Volume CXI, dated 29 June 2018. Read from the text layer of the copy supplied by the author (10 pages).