MPs resolved to increase the threshold for those seeking to benefit from incentives to employ 70 per cent of Ugandans, who should also collectively earn 70 per cent of the particular company’s wage bill.
Investors seeking tax incentives will have to adhere to tight requirements in the coming financial year 2020/2021.
This was resolved on Tuesday by MPs while considering the Stamp Duty (Amendment) Bill 2020. The object of the bill is to amend the Stump Duty Act 2014, to provide for the payment of stamp duty on a professional licence or certificate and to clarify on the requirements for incentives on strategic investment projects.
MPs resolved to increase the threshold for those seeking to benefit from incentives to employ 70 per cent of Ugandans, who should also collectively earn 70 per cent of the particular company’s wage bill.
Finance Committee Chairperson Henry Musasizi told parliament that the percentage rate of 70 per cent citizens should be used to replace the current number of 100 citizens. He said citizens employed by the company should earn 70 per cent of the total salary budget for a particular financial year.
“The number of 100 citizens should be expressed as a percentage of the entire workforce as is the case with exemptions under the Value Added Tax Act. The exemption should only apply to those companies ready to reserve seventy percent of the total wage bill for citizens. This will ensure that more citizens are employed in skilled positions,” he justified.
Currently, investors who are citizens of Uganda or the East African Community who inject a minimum of US Dollars 1 million enjoy incentives, while foreigners reap the coveted benefit if they inject US Dollars 10 million.
Parliament further gave incentives to local investors by lowering their threshold for benefitting from the tax incentive to US Dollars 300,000 and US Dollars 100,000 for upcountry investments.
MPs say the additional measures are intended to make a transition to total 100 per cent operations being run by local citizens.
Nakaseke North MP Syda Bbumba additionally said that the companies must have a clear policy aimed at training locals to eventually take over the operations entirely.
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