Aptitude Questions on Domestic Taxes

1. TIN Registration Requirements:

A business entity applies for a TIN and provides a certificate of incorporation, Company
Form 20, and the TINs of its directors. Which of the following is NOT an acceptable
document to support this application?
o A) A valid passport of the director
o B) Village ID
o C) NSSF card
o D) Memorandum of Understanding

2. Income Tax Computation:

A company earns a gross revenue of UGX 500 million in a year. The allowable
deductions include salaries (UGX 120 million), rent (UGX 50 million), and operational
costs (UGX 30 million). What is the corporation tax payable, assuming a tax rate of
30%?
o A) UGX 90 million
o B) UGX 90.5 million
o C) UGX 91 million
o D) UGX 92.5 million

3. VAT Calculation:
A VAT-registered company purchases goods worth UGX 1,000,000 (exclusive of VAT)
and sells them at UGX 1,500,000 (exclusive of VAT). The VAT rate is 18%. Calculate
the VAT payable or refundable.
o A) UGX 90,000 payable
o B) UGX 90,000 refundable
o C) UGX 180,000 payable
o D) UGX 180,000 refundable

4. Rental Tax:
A property owner earns UGX 4,500,000 in annual rent and incurs expenses of UGX
1,500,000 related to generating this rental income. For individuals, the allowable
deduction threshold is UGX 2,820,000, and rental tax is charged at 12%. Calculate the
rental tax payable.
o A) UGX 201,600
o B) UGX 261,600
o C) UGX 321,600
o D) UGX 381,600
 5. Withholding Tax:
A Ugandan company pays UGX 2,000,000 to a non-resident consultant for professional
services. The withholding tax rate for non-residents is 15%. How much tax should be
withheld and remitted to the URA?
o A) UGX 150,000
o B) UGX 200,000
o C) UGX 300,000
o D) UGX 400,000

6. Penalties for Non-compliance:

A taxpayer fails to notify the Commissioner of changes in their business location. The act
was determined to be reckless. What is the maximum fine applicable under Ugandan tax
laws?
o A) UGX 1,000,000
o B) UGX 2,000,000
o C) UGX 3,000,000
o D) UGX 5,000,000

More Questions on Domestic Taxes

7. Pay As You Earn (PAYE) Computation:

An employee earns a gross monthly salary of UGX 1,000,000, which includes a transport
allowance of UGX 200,000 and medical benefits of UGX 100,000. Calculate the PAYE
payable if the applicable rates are as follows:
o First UGX 235,000: Nil
o Next UGX 100,000: 10%
o Next UGX 75,000: 20%
o Above UGX 410,000: 30%
o An additional 10% for income above UGX 10,000,000 per month.
o A) UGX 100,500
o B) UGX 103,500
o C) UGX 115,500
o D) UGX 125,500

8. Withholding Tax on Dividends:

A listed Ugandan company pays dividends worth UGX 10,000,000 to a resident
 shareholder. The withholding tax rate for dividends from listed companies is 10%. What
is the withholding tax amount?
o A) UGX 1,000,000
o B) UGX 1,500,000
o C) UGX 2,000,000
o D) UGX 2,500,000

9. VAT Threshold and Registration:

A business has recorded taxable sales of UGX 40 million over three consecutive months.
The annual VAT registration threshold is UGX 150 million, or UGX 37.5 million over
three months. Should the business register for VAT, and why?
o A) Yes, the business exceeds the three-month threshold.
o B) No, the business does not meet the annual threshold.
o C) Yes, the business meets both thresholds.
o D) No, the business is exempt from VAT.

10. Presumptive Tax Regime:

A small business has annual gross turnover of UGX 45,000,000. Using the presumptive
tax regime, calculate the tax payable if the following rates apply:

● UGX 10 million–30 million: UGX 80,000 + 0.4% of turnover above UGX 10 million
● UGX 30 million–50 million: UGX 200,000 + 0.5% of turnover above UGX 30 million
● A) UGX 225,000
● B) UGX 240,000
● C) UGX 265,000
● D) UGX 300,000

11. Gaming Tax:

A casino earns a monthly revenue of UGX 50,000,000. The gaming tax rate is 15% on
gross earnings. How much gaming tax is payable for the month?

● A) UGX 5,000,000
● B) UGX 6,000,000
● C) UGX 7,500,000
● D) UGX 8,000,000
 12. Objections and Appeals:
A taxpayer is dissatisfied with an assessment decision by the Commissioner. What is the
maximum time within which they must lodge an objection?

● A) 15 days
● B) 30 days
● C) 45 days
● D) 60 days

13. Rental Tax for Corporations:

A company earns UGX 80,000,000 in gross annual rental income and incurs UGX
45,000,000 in expenses. Allowable expenses are capped at 50% of gross income. Rental
tax is 30% of chargeable income. What is the rental tax payable?

● A) UGX 6,000,000
● B) UGX 8,000,000
● C) UGX 10,500,000
● D) UGX 12,000,000

14. Penalties on False TIN Usage:

A taxpayer is convicted of knowingly using a false TIN on a tax return. What is the
maximum penalty under the Ugandan tax laws?

● A) UGX 1,000,000 fine or 2 years imprisonment

● B) UGX 2,000,000 fine or 4 years imprisonment
● C) UGX 3,000,000 fine or 6 years imprisonment
● D) UGX 5,000,000 fine or 10 years imprisonment

15. Digital Service Tax:

A non-resident company provides digital services in Uganda and earns UGX 200,000,000
annually. Digital service tax is charged at 5% of gross earnings. What is the tax payable?

● A) UGX 5,000,000
● B) UGX 7,500,000
● C) UGX 10,000,000
● D) UGX 15,000,000

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VAT Scenarios and Problems

1. VAT on Sales and Purchases:

A VAT-registered business purchases goods worth UGX 2,000,000 (exclusive of VAT)
and sells them for UGX 3,000,000 (exclusive of VAT). If the VAT rate is 18%, calculate:
o Input VAT.
o Output VAT.
o Net VAT payable to URA.
o A) UGX 360,000, UGX 540,000, UGX 180,000
o B) UGX 360,000, UGX 540,000, UGX 360,000
o C) UGX 540,000, UGX 360,000, UGX 180,000
o D) UGX 540,000, UGX 540,000, UGX 0

2. Zero-rated Supplies:
A company supplies medical equipment, which is zero-rated for VAT, worth UGX
10,000,000. If the company incurred UGX 1,500,000 in input VAT for purchases, how
much VAT refund is the company eligible for?
o A) UGX 270,000
o B) UGX 1,500,000
o C) UGX 1,800,000
o D) UGX 0

3. Voluntary VAT Registration:

A business has a quarterly turnover of UGX 20,000,000 and opts for voluntary VAT
registration. Which of the following conditions must it meet?
o A) Maintain a fixed place of business.
o B) Submit regular tax returns.
o C) Keep proper books of accounts.
o D) All of the above.

4. VAT Refund Process:

A taxpayer files a VAT refund claim of UGX 6,000,000. The claim is verified, and the
URA determines that only UGX 5,500,000 is valid. The taxpayer owes UGX 1,000,000
in PAYE. How much refund will the taxpayer receive after offsetting the PAYE liability?
o A) UGX 4,500,000
o B) UGX 5,000,000
o C) UGX 5,500,000
o D) UGX 6,000,000
5. VAT and Exempt Imports:
A taxpayer imports exempt goods worth UGX 50,000,000. These goods are then sold for
UGX 70,000,000. If the goods remain exempt, how much VAT is the taxpayer required
to pay?
o A) UGX 0
o B) UGX 3,600,000
o C) UGX 12,600,000
o D) UGX 18,000,000

6. VAT Threshold Test:

A business reports taxable turnover of UGX 30,000,000, UGX 35,000,000, and UGX
40,000,000 in three consecutive months. The annual VAT registration threshold is UGX
150 million, or UGX 37.5 million for three months. Should the business register for
VAT, and why?
o A) Yes, turnover exceeds the three-month threshold.
o B) No, turnover does not meet the annual threshold.
o C) Yes, turnover exceeds the annual threshold.
o D) No, VAT registration is not required for small businesses.

7. VAT E-Invoicing Requirement:

A business issues paper invoices to customers despite being VAT-registered. If the
business claims input VAT of UGX 500,000 for purchases supported by e-invoices, how
much input VAT is claimable?
o A) UGX 0
o B) UGX 250,000
o C) UGX 500,000
o D) UGX 750,000

8. VAT on Mixed Supplies:

A company supplies both exempt and taxable goods with total sales of UGX 60,000,000
(40% taxable and 60% exempt). The company incurs UGX 9,000,000 in input VAT.
How much input VAT can it claim as credit?
o A) UGX 3,600,000
o B) UGX 5,400,000
o C) UGX 6,000,000
o D) UGX 9,000,000
 9. Failure to Register for VAT:
A taxpayer exceeds the VAT threshold in August but fails to register for VAT by the end
of September. The taxpayer's taxable turnover for the next three months is UGX
45,000,000. What penalty might the taxpayer face under the VAT Act?
o A) Fine of UGX 1,000,000
o B) Penalty equal to the VAT not collected.
o C) Imprisonment not exceeding six years.
o D) All of the above.

10. VAT on Digital Services:

A non-resident company provides digital services to Ugandan customers, earning UGX
100,000,000 in gross revenue. The applicable VAT rate is 18%. How much VAT must
the company pay?

● A) UGX 0 (Exempt from VAT)

● B) UGX 5,000,000
● C) UGX 15,000,000
● D) UGX 18,000,000

● Question: During what hours are URA services available on weekdays, excluding public
holidays?
o a) 9:00 am – 3:00 pm
o b) 8:00 am – 5:00 pm
o c) 8:00 am – 8:00 pm
o d) 24 hours

Answer: b) 8:00 am – 5:00 pm

2. Call Center Availability

● Question: What are the operating hours of the URA call center on weekends?
o a) 8:00 am – 5:00 pm
o b) 8:00 am – 8:00 pm
o c) 9:00 am – 3:00 pm
o d) 24 hours

Answer: c) 9:00 am – 3:00 pm

3. Processing Timelines
● Question: How long does URA take to process a Tax Clearance Certificate after fulfilling
all requirements?
o a) 15 days
 o b) 2 working days
o c) 30 days
o d) 10 days

Answer: b) 2 working days

4. Duty Drawbacks and Refunds

● Question: What is the stipulated timeline for processing VAT refunds?
o a) 15 days
o b) 30 days
o c) 10 days
o d) 90 days

Answer: a) 15 days

5. Tax Identification Number (TIN)

● Question: Within how many business days is a TIN processed once all requirements are
met?
o a) 10 days
o b) 2 business days
o c) 15 days
o d) 30 days

Answer: b) 2 business days

6. Audit Notifications
● Question: How many days’ notice does URA provide before conducting an audit,
excluding investigations?
o a) 30 days
o b) 15 days
o c) 10 days
o d) 90 days

Answer: c) 10 days

7. Objection Decisions
● Question: What is the timeline for URA to serve an objection notice for Domestic Taxes?
o a) 30 days
o b) 10 days
o c) 90 days
 o d) 15 days

Answer: c) 90 days

8. Licensing Updates
● Question: How often does URA update the list of licensed Tax and Clearing Agents?
o a) Monthly
o b) Quarterly
o c) Annually
o d) Biannually

Answer: c) Annually

9. Online Systems
● Question: How frequently are URA online systems available?
o a) Weekdays only
o b) Weekends only
o c) 24/7
o d) 8:00 am – 5:00 pm

Answer: c) 24/7

10. Engagement Notices

● Question: How many days in advance will taxpayers be informed about routine
engagement meetings?
o a) One week
o b) Two days
o c) Three days
o d) Ten days

Answer: a) One week

11. Duty Drawback Refunds

● Question: How long does URA take to process Income Tax refunds after submission of a
request?
o a) 10 days
o b) 15 days
o c) 30 days
 o d) 90 days

Answer: c) 30 days

12. URA Contact Person

● Question: What information will URA provide for taxpayers to follow up on
correspondences?
o a) Physical address and email
o b) Contact person, direct telephone, and official email
o c) General office telephone and postal address
o d) Only email

Answer: b) Contact person, direct telephone, and official email

13. Processing of Exemptions

● Question: What is the timeline for completing the Tax Exemption process after all
requirements are fulfilled?
o a) 15 days
o b) 10 business days
o c) 24 business days
o d) 30 business days

Answer: d) 30 business days

14. Objection Timelines for Customs Duties

● Question: Within how many days will URA serve an objection notice for Customs
Duties?
o a) 30 days
o b) 90 days
o c) 15 days
o d) 10 days

Answer: a) 30 days

15. Approval and Cancellation of Agency Notice

● Question: What is the maximum timeline for processing the approval and cancellation
of an agency notice?
o a) 15 business days
o b) 24 business days
o c) 30 business days
 o d) 10 business days

Answer: b) 24 business days

16. Border Posts

● Question: How often are services available at One Stop Border Posts?
o a) Weekdays only
o b) Weekends only
o c) 24/7
o d) 8:00 am – 8:00 pm

Answer: c) 24/7

17. Inquiries and Complaint Management

● Question: What should URA provide for managing taxpayer inquiries and complaints
effectively?
o a) A list of available channels
o b) A complaint hotline only
o c) Contact details of all URA offices
o d) Updates about processing delays

Answer: a) A list of available channels

18. System Notifications

● Question: What action does URA take when their online systems experience
interruptions?
o a) Halt all online processes
o b) Notify taxpayers of system intermittence
o c) Extend service hours
o d) Automatically resolve issues

Answer: b) Notify taxpayers of system intermittence

19. Stakeholder Engagements

● Question: For routine engagements, how much advance notice does URA provide about
the time and venue?
o a) 2 days
o b) 7 days
o c) 10 days
o d) 1 month
 Answer: b) 7 days

20. VAT Refunds

● Question: A taxpayer submits a VAT refund request on July 1. By which date should the
refund ideally be processed?
o a) July 16
o b) July 10
o c) July 31
o d) July 25

Answer: a) July 16
● axpayers' Charter
1. Taxpayers' Rights
o Question: Which of the following rights ensures that URA applies tax laws
consistently to all taxpayers?
▪ a) Right to finality
▪ b) Right to confidentiality
▪ c) Right to fair treatment
▪ d) Right to representation

Answer: c) Right to fair treatment

2. Taxpayer's Privacy
o Question: The right to privacy guarantees taxpayers that URA’s investigations
will:
▪ a) Avoid any need for search and seizure actions
▪ b) Comply with the law and respect due process rights
▪ c) Be shared openly with third parties
▪ d) Be as intrusive as necessary

Answer: b) Comply with the law and respect due process rights

3. Timely Services
o Question: What right allows taxpayers to receive prompt, courteous, and
professional assistance from URA?
▪ a) Right to appeal
▪ b) Right to be informed
▪ c) Right to timely, quality, and professional services
▪ d) Right to challenge
 Answer: c) Right to timely, quality, and professional services

4. Taxpayer Obligations
o Question: What is the primary responsibility of taxpayers regarding tax returns?
▪ a) File tax returns accurately and timely
▪ b) Delegate the filing to URA staff
▪ c) Submit returns only when penalties are imposed
▪ d) File returns once every three years

Answer: a) File tax returns accurately and timely

5. Taxpayer Identification Number (TIN)

o Question: In every interaction with URA, what must the taxpayer quote?
▪ a) Passport number
▪ b) Taxpayer Identification Number (TIN)
▪ c) National Identification Number (NIN)
▪ d) Business registration number

Answer: b) Taxpayer Identification Number (TIN)

E-Tax System
6. E-Tax Introduction
o Question: What is the primary purpose of URA’s eTAX system?
▪ a) To replace all physical offices
▪ b) To enable taxpayers to manage tax processes online
▪ c) To penalize taxpayers for non-compliance
▪ d) To limit access to tax information

Answer: b) To enable taxpayers to manage tax processes online

7. Benefits of E-Registration
o Question: Which of the following is a benefit of e-registration?
▪ a) Manual submission of tax returns
▪ b) Streamlined and time-efficient process
▪ c) Increased complexity of TIN application
▪ d) Limited communication with URA
 Answer: b) Streamlined and time-efficient process

8. E-Filing Process
o Question: What evidence confirms a successful e-filing of a tax return?
▪ a) Return Modified Advice Notice
▪ b) E-acknowledgement receipt
▪ c) Payment registration slip
▪ d) Application for late filing

Answer: b) E-acknowledgement receipt

9. E-Payment Options
o Question: What payment methods are enabled under the e-payment system?
▪ a) Cash only
▪ b) Mobile money, Payway, and VISA cards
▪ c) Cheques and postal orders
▪ d) Online wire transfers only

Answer: b) Mobile money, Payway, and VISA cards

10. Filing Deadline

o Question: To avoid penalties, when must a taxpayer submit their return and
payment?
▪ a) Before the tax year ends
▪ b) On or before the deadline
▪ c) Within 30 days of filing the return
▪ d) After receiving a notice of penalty

Answer: b) On or before the deadline

Residency Determination

A person spends the following number of days in Uganda during a three-year period:

● 2021: 120 days

● 2022: 135 days
● 2023: 110 days

Does the person qualify as a resident for tax purposes in 2023 under the Income Tax Act?

● A) Yes, because the average number of days is above 122 for the past three years
 ● B) No, because the total number of days is less than 183 in 2023
● C) Yes, because the person has a permanent home in Uganda
● D) No, because residency requires presence for 183 days in one year

2. Chargeable Income Calculation

A taxpayer earns the following income during a year:

● Business income: UGX 100,000,000

● Employment income: UGX 40,000,000
● Property income: UGX 20,000,000

The taxpayer also incurs the following allowable deductions:

● Operational costs: UGX 30,000,000

● Capital losses: UGX 10,000,000

What is the taxpayer's chargeable income?

● A) UGX 130,000,000
● B) UGX 120,000,000
● C) UGX 100,000,000
● D) UGX 90,000,000

3. Capital Gains Tax

A taxpayer sells a piece of land for UGX 50,000,000 in December 2022. The land was purchased
in January 2019 for UGX 30,000,000. The CPI for January 2019 is 150, and the CPI for
December 2022 is 200.

Using the formula CB×CPIDCPIACB \times \frac{CPID}{CPIA}CB×CPIACPID, what is the

indexed cost base of the land?

● A) UGX 30,000,000
● B) UGX 35,000,000
● C) UGX 40,000,000
● D) UGX 50,000,000

4. Business Income
Which of the following would not be considered business income under the Income Tax Act?

● A) Rent derived by a company whose main business is letting property

● B) UGX 500,000 received as a gift from a business partner
● C) UGX 1,000,000 profit from the disposal of depreciable business assets
● D) Income derived from gambling

5. Scope of Tax Liability

A resident taxpayer earns UGX 100,000,000 from a business in Uganda and UGX 50,000,000
from employment in another country. How much of their income is taxable in Uganda?

● A) UGX 100,000,000
● B) UGX 50,000,000
● C) UGX 150,000,000
● D) None of the above

6. Determination of Adventure in Trade

A person purchases a rare collectible for UGX 2,000,000 and sells it six months later for UGX
5,000,000. Which of the following characteristics best qualifies this as an adventure in the nature
of trade?

● A) Profit seeking and short interval between purchase and sale

● B) Number of transactions and regularity
● C) Nature of the asset and method of financing
● D) Compliance with statutory obligations

7. Capital Gains Tax (Advanced Calculation)

A business owner purchases a building for UGX 200,000,000 in June 2017 and sells it for UGX
300,000,000 in December 2022. The CPI for June 2017 is 140, and the CPI for December 2022
is 200. What is the taxable capital gain?

● A) UGX 80,000,000
● B) UGX 85,714,286
● C) UGX 100,000,000
● D) UGX 70,000,000
8. Residency of Companies

Which of the following conditions does not qualify a company as a resident for tax purposes?

● A) It is incorporated under Ugandan law

● B) Its operations are managed and controlled in Uganda
● C) It derives all its income from Ugandan sources
● D) It undertakes most of its operations in Uganda

9. Substituted Year of Income

A company changes its accounting year-end from June 30 to December 31. Which of the
following describes the period July 1 to December 31?

● A) Substituted year of income

● B) Transitional year of income
● C) Previous accounting date
● D) None of the above

1. Residency Determination (Scenario-Based)

A consultant spends the following days in Uganda:

● 2021: 110 days

● 2022: 130 days
● 2023: 140 days

In addition, the consultant maintains a rented apartment in Uganda, which is used whenever they
visit.

Based on the above, which of the following qualifies the consultant as a resident for tax
purposes in 2023?

● A) Having a permanent home in Uganda.

● B) Spending more than 122 days per year on average over the past three years.
● C) Spending over 183 days in Uganda during 2023.
● D) Both A and B.

2. Chargeable Income Computation (Complex Deductions)

A taxpayer earns the following during a year:

● Business income: UGX 200,000,000

● Employment income: UGX 50,000,000
● Property income: UGX 70,000,000

The allowable deductions for the year include:

● Operational costs: UGX 30,000,000

● Interest expense: UGX 10,000,000
● Capital losses: UGX 20,000,000

What is the taxpayer's chargeable income?

● A) UGX 260,000,000
● B) UGX 270,000,000
● C) UGX 280,000,000
● D) UGX 300,000,000

3. Capital Gains Tax (Detailed Scenario)

A taxpayer sells a piece of land for UGX 90,000,000 in December 2023. The land was purchased
in January 2020 for UGX 50,000,000. The CPI for January 2020 is 120, and the CPI for
December 2023 is 180.

Calculate the indexed cost base and the taxable capital gain, given the 30% tax rate on capital
gains.

● A) Indexed cost base: UGX 60,000,000; Taxable gain: UGX 30,000,000; Tax: UGX
9,000,000
● B) Indexed cost base: UGX 75,000,000; Taxable gain: UGX 15,000,000; Tax: UGX
4,500,000
● C) Indexed cost base: UGX 75,000,000; Taxable gain: UGX 15,000,000; Tax: UGX
9,000,000
● D) Indexed cost base: UGX 60,000,000; Taxable gain: UGX 30,000,000; Tax: UGX
4,500,000

4. Business Income vs Non-Business Income

Which of the following items is not considered business income under the Income Tax Act?

● A) Profit from the sale of trading stock.

 ● B) Rent from property held for commercial purposes.
● C) Interest on trade receivables.
● D) Winnings from gambling activities.

5. Residency of Companies (Real-World Example)

Company A is incorporated in Kenya but maintains a branch office in Uganda. The Ugandan
branch generates 70% of the company's revenue and is managed entirely from Kampala.

Is Company A considered a resident company in Uganda for tax purposes?

● A) No, because the company is incorporated in Kenya.

● B) Yes, because most of its operations are in Uganda.
● C) No, because it only operates a branch office.
● D) Yes, because its management and control are in Uganda.

6. VAT Implications for Capital Gains

A taxpayer sells a piece of property (not a depreciable asset) for UGX 500,000,000 and incurs an
indexed cost base of UGX 400,000,000. Assuming the transaction involves VAT and the VAT
rate is 18%, what is the total tax liability, including VAT and capital gains tax (30%)?

● A) UGX 110,000,000
● B) UGX 118,000,000
● C) UGX 126,000,000
● D) UGX 135,000,000

7. Transitional Year of Income (Tailored)

Company X changes its accounting year from ending on June 30 to ending on December 31. For
the period July 1, 2023, to December 31, 2023, what type of year of income applies?

● A) Transitional year of income

● B) Substituted year of income
● C) Standard year of income
● D) None of the above

8. Taxable Scope for Residents and Non-Residents (Advanced)

A Ugandan resident taxpayer earns the following during the year of income:

● Business income from Uganda: UGX 100,000,000

● Employment income from Kenya: UGX 50,000,000
● Dividends from South Africa: UGX 10,000,000

A non-resident taxpayer earns:

● Business income from Uganda: UGX 60,000,000

● Property income from Uganda: UGX 40,000,000

What is the total taxable income for each taxpayer in Uganda?

● A) Resident: UGX 150,000,000; Non-Resident: UGX 100,000,000

● B) Resident: UGX 160,000,000; Non-Resident: UGX 100,000,000
● C) Resident: UGX 100,000,000; Non-Resident: UGX 60,000,000
● D) Resident: UGX 160,000,000; Non-Resident: UGX 60,000,000

9. Characteristics of Adventure in Trade

Which of the following characteristics is most likely to qualify a transaction as an adventure in

the nature of trade?

● A) Profit-seeking intent and short interval between purchase and sale.

● B) Long-term holding of assets for appreciation.
● C) Regularity of transactions over a period of years.
● D) Presence of trading interest in unrelated fields.

10. Capital Gains Inflation Adjustment (Scenario)

A taxpayer purchases a property for UGX 120,000,000 in July 2018 and sells it for UGX
200,000,000 in January 2024. The CPI for July 2018 is 130, and the CPI for January 2024 is 210.
What is the taxable capital gain, and how much tax is payable at a 30% tax rate?

● A) Taxable capital gain: UGX 74,000,000; Tax: UGX 22,200,000

● B) Taxable capital gain: UGX 80,000,000; Tax: UGX 24,000,000
● C) Taxable capital gain: UGX 84,000,000; Tax: UGX 25,200,000
● D) Taxable capital gain: UGX 70,000,000; Tax: UGX 21,000,000

Employment Income Composition

Which of the following would not qualify as employment income under the Income Tax Act?

● A) Bonus paid to an employee.

● B) Dividends earned by an employee from shares they personally own.
● C) Insurance premiums paid by the employer for an employee’s dependents.
● D) Payment in lieu of leave.

2. Benefits in Kind (Private Use of a Motor Vehicle)

An employer provides an employee with a motor vehicle for personal and official use. The
vehicle's market value at the time it was first used is UGX 80,000,000. It was available for the
employee's private use for 200 days in the year of income (365 days). The employee contributes
UGX 1,000,000 annually for the use of the vehicle.

Calculate the taxable value of the benefit.

● A) UGX 4,383,561
● B) UGX 4,383,560
● C) UGX 4,400,000
● D) UGX 4,000,000

3. Employee vs. Independent Contractor

Which of the following factors is most likely to classify an individual as an independent

contractor rather than an employee?

● A) The employer determines the hours and location of work.

● B) The individual uses their own tools and materials for the work.
● C) The employer provides meals and utilities.
● D) The employer has control over the sequence of work performed.

4. Property Income Classification

A company earns UGX 50,000,000 annually from renting out its properties. The company’s
main business is providing financial services. How should this income be classified?

● A) Business income
● B) Property income
● C) Exempt income
● D) Employment income
5. Valuation of Housing Benefit

An employer provides accommodation for an employee whose annual salary is UGX

50,000,000. The fair market rent for the accommodation is UGX 10,000,000. The employee pays
UGX 2,000,000 toward the rent annually.

What is the taxable value of the housing benefit?

● A) UGX 8,000,000
● B) UGX 10,000,000
● C) UGX 7,500,000
● D) UGX 7,000,000

6. Exempt Income for Employees

Which of the following is not considered exempt income for employees?

● A) Pension income.
● B) Medical expenses reimbursed by the employer.
● C) Bonuses paid to an employee.
● D) Meals provided to all employees on equal terms.

7. Taxation of Low-Interest Loans

An employer provides an employee with a loan of UGX 10,000,000 at an interest rate of 5%.
The Bank of Uganda discount rate at the start of the year is 12%.

What is the taxable benefit value of the loan?

● A) UGX 50,000
● B) UGX 500,000
● C) UGX 700,000
● D) UGX 10,000,000

8. Tax-Free Non-Cash Benefits

Which of the following non-cash benefits is exempt from taxation?

 ● A) Accommodation provided to the employee.
● B) Meals valued at UGX 15,000 provided to an employee monthly.
● C) Refreshments provided to all employees on equal terms.
● D) Utility bills paid by the employer on behalf of the employee.

9. Distinguishing Employment from Property Income

An individual receives UGX 40,000,000 annually from a rental property. The individual also
earns UGX 25,000,000 as a director of a company.

How should their income be classified for tax purposes?

● A) UGX 65,000,000 as employment income.

● B) UGX 40,000,000 as property income and UGX 25,000,000 as employment income.
● C) UGX 65,000,000 as property income.
● D) UGX 25,000,000 as business income and UGX 40,000,000 as property income.

10. Calculation of Accommodation Benefit

An employer provides an employee with housing worth UGX 20,000,000 annually. The
employee’s annual salary is UGX 60,000,000.

What is the taxable housing benefit?

● A) UGX 20,000,000
● B) UGX 9,000,000
● C) UGX 15,000,000
● D) UGX 6,000,000

11. Relief on Terminal Benefits

What percentage relief is applied to terminal benefits for an employee who has served an
employer for at least 10 years?

● A) 10%
● B) 15%
● C) 25%
● D) 30%
12. Composition of Exempt Income

Which of the following forms of income is classified as exempt income?

● A) Employment income of an expatriate in a listed institution approved by the Minister.

● B) Rent received by a company as part of its primary business.
● C) Dividends received by an individual investor.
● D) Employment bonuses for employees earning below UGX 235,000 per month.

13. Debt Waiver Benefit

An employer waives a debt of UGX 5,000,000 owed by an employee.

What is the taxable value of this benefit?

● A) UGX 0
● B) UGX 500,000
● C) UGX 5,000,000
● D) UGX 2,500,000

Multiple Choice Questions

1. What does TIN stand for?

A. Taxpayer Identification Number
B. Taxpayer Income Notification
C. Tax Incremental Number
D. Tax Identification Network

Answer: A. Taxpayer Identification Number

2. Which of the following is NOT a requirement for individual TIN registration?

A. National ID
B. Certificate of Incorporation
C. Passport
D. Driving Permit

Answer: B. Certificate of Incorporation

3. What is the VAT registration threshold in terms of gross turnover?

A. 50 million
B. 100 million
C. 150 million
D. 200 million
 Answer: C. 150 million

4. What is the penalty for knowingly using a false TIN?

A. Fine of Shs. 1,000,000
B. Fine of Shs. 3,000,000 or imprisonment up to 6 years
C. Fine of Shs. 2,000,000 or imprisonment up to 4 years
D. No penalty

Answer: B. Fine of Shs. 3,000,000 or imprisonment up to 6 years

5. Which tax is imposed on a person's taxable income?

A. Local Excise Duty
B. Rental Tax
C. Income Tax
D. Gaming Tax

Answer: C. Income Tax

2. Fill in the Blanks

1. A Taxpayer Identification Number (TIN) can be obtained through the URA web portal or
by visiting a __________.
Answer: URA designated office
2. The tax imposed on the supply of taxable goods and services and imports other than
exempt goods or services is called __________.
Answer: Value Added Tax (VAT)
3. The penalty for failing to notify the Commissioner of changes in registration details may
result in a fine not exceeding __________ or imprisonment not exceeding six years.
Answer: Shs. 3,000,000
4. Proper business transaction records should be kept for at least __________ years.
Answer: 5
5. The Digital Service Tax is imposed on non-resident persons providing digital services in
Uganda at a rate of __________ on gross earnings.
Answer: 5%

3. True/False Questions

1. A TIN is required for anyone engaging in a business generating income in Uganda.

Answer: True
2. A taxpayer may deregister their TIN if they no longer satisfy the registration
requirements.
Answer: True
 3. Local Excise Duty applies only to imported goods and not locally manufactured goods.
Answer: False
4. An applicant must have a fixed place of business to register for VAT.
Answer: True
5. A taxpayer can update their registration details only through manual amendment forms.
Answer: False

4. Short Answer Questions

1. What are the general requirements for VAT registration?

Answer: The applicant must already be in business, have a fixed place of abode or
business, keep proper books of accounts, submit regular and reliable tax returns, and be
considered a fit and proper person by the Commissioner General.
2. Name three products that must have Digital Tax Stamps in Uganda.
Answer: Wines, spirits, and bottled water.
3. What are the benefits of acquiring a TIN?
Answer: Enables importing/exporting goods, claiming tax benefits (e.g., refunds),
accessing bank loans, registering motor vehicles, and processing stamp duty on land
transactions above Shs. 50 million.
4. Who are the members of the Tax Agents Registration Committee (TARC)?
Answer: The Commissioner General of URA, a representative from ICPAU, a
representative from Uganda Law Society, and two members from the private sector.
5. What is the penalty for failing to maintain proper records of business transactions?
Answer: A fine not exceeding Shs. 2,000,000 or imprisonment not exceeding six years or
both on conviction.

Multiple Choice Questions (MCQs)

1.1 What is the penalty for failing to furnish a tax return by the due date?
a) A fine not exceeding Shs. 1,000,000
b) A fine not exceeding Shs. 2,000,000
c) Both a) and b) depending on the prescribed time
d) Imprisonment for 10 years

Answer: c) Both a) and b) depending on the prescribed time

1.2 By when must VAT returns be filed?

a) By the 15th day of the following month
b) By the 30th day of the following month
c) By the 6th month after the end of the year of income
d) By the last day of the tax period
Answer: a) By the 15th day of the following month

1.3 What is the maximum extension period allowed for filing a tax return?
a) 30 days
b) 60 days
c) 90 days
d) 120 days

Answer: c) 90 days

1.4 What must taxpayers with an annual turnover above 500 million shillings include in their
income tax returns?
a) Only a signed declaration
b) Audited financial statements prepared by a registered accountant
c) Quarterly rental income reports
d) Certificates from a tax agent

Answer: b) Audited financial statements prepared by a registered accountant

1.5 What is the penalty for understating provisional chargeable income by more than 10% of
actual chargeable income?
a) 10% of the difference in tax
b) 15% of the difference in tax
c) 20% of the difference in tax
d) 25% of the difference in tax

Answer: c) 20% of the difference in tax

2. True or False

2.1 Tax agents must retain copies of certificates and statements provided to taxpayers for three
years.
Answer: False (They must retain them for five years.)

2.2 Excise duty returns must be filed on or before the 10th day of the following month.
Answer: False (They must be filed by the 15th day.)
2.3 A taxpayer can amend a tax return if it is under investigation.
Answer: False (Amendments are not allowed if the return is under investigation.)

2.4 Non-resident suppliers of services must file quarterly returns within 30 days after the end of
the three consecutive calendar months.
Answer: False (They must file within 15 days.)

3. Fill in the Blanks

3.1 Tax returns must be filed using the prescribed format, and the Commissioner can appoint
________ to assist a taxpayer at their cost.
Answer: another person

3.2 For taxpayers who submit self-assessments, they are treated as having ________ the amount
of tax payable for the tax period.
Answer: declared

3.3 The penalty for knowingly making false statements is a fine of up to ________ currency
points or imprisonment not exceeding ________.
Answer: 5,500; ten years

4. Short Answer Questions

4.1 What are the consequences of failing to file a self-assessment by the required date?
Answer: The Commissioner will issue a default assessment, which includes the estimated
taxable income, tax payable, penal tax, and interest.

4.2 What should taxpayers do if they encounter challenges while filing returns online?
Answer: Send an email to [email protected] or call the toll-free lines
0800117000/0800217000 for assistance.

4.3 List three scenarios where the Commissioner can require advance tax returns to be filed.
Answer:

● If a taxpayer has died.

● If a taxpayer has become bankrupt or gone into liquidation.
● If a taxpayer is about to leave Uganda permanently.

1. What is the time limit for lodging an objection to a tax decision after receiving the
notice?
A. 30 days
B. 45 days
 C. 60 days
D. 90 days

Answer: B. 45 days

2. Which of the following is NOT a condition for the Commissioner to consider an

objection?
A. The taxpayer must have filed the related return.
B. The taxpayer must provide evidence supporting the objection.
C. The taxpayer must have paid the tax due along with any penalties or interest.
D. The taxpayer must request a waiver of the tax amount.

Answer: D. The taxpayer must request a waiver of the tax amount.

3. If the Commissioner fails to make a decision on an objection within 90 days, the

taxpayer may:
A. File a new objection.
B. Treat the objection as allowed and notify the Commissioner.
C. File a case in the High Court.
D. Wait for the Commissioner to respond.

Answer: B. Treat the objection as allowed and notify the Commissioner.

4. To whom can a person dissatisfied with the Tax Appeals Tribunal's decision
appeal?
A. Supreme Court
B. Court of Appeal
C. High Court
D. Commissioner General

Answer: C. High Court

5. Which of the following statements about the burden of proof is correct?

A. The Commissioner must prove the correctness of a tax assessment.
B. The taxpayer must prove that the tax assessment is incorrect.
C. Both the taxpayer and Commissioner share the burden of proof equally.
D. There is no burden of proof in objection procedures.
 Answer: B. The taxpayer must prove that the tax assessment is incorrect.

True or False Questions

6. A taxpayer can pay taxes through mobile money, Payway, or Visa/MasterCard services.
Answer: True

7. The Commissioner must serve a notice of an objection decision within 60 days from
receiving the objection.
Answer: False (The time limit is 90 days.)

8. The Supreme Court can only hear appeals involving questions of law of great public
importance.
Answer: True

9. A taxpayer may lodge an appeal to the Tax Appeals Tribunal within 60 days of the
Commissioner’s decision.
Answer: False (The time limit is 45 days.)

10. Taxes paid by a taxpayer are always allocated to penalties and interest first before
principal tax liability.
Answer: False (The principal tax liability is cleared first.)

Fill-in-the-Blank Questions

11. Taxes are paid by registering a payment online through the URA web portal or using the
__________ app.
Answer: Askura

12. Temporary closure of business premises for unpaid taxes can last for a maximum of
__________ days.
Answer: 14
 13. A person dissatisfied with a High Court decision may appeal to the __________ within
30 days.
Answer: Court of Appeal

14. If a taxpayer is found to have an outstanding liability, the Commissioner must issue a
__________, giving them at least 28 days to settle the payment.
Answer: Notice of demand

15. Provisional tax for companies is paid in __________ installments.

Answer: Two

Scenario-Based Questions

16. Scenario: A taxpayer receives a tax assessment but disagrees with it. They have evidence
supporting their objection but have not paid the tax due under the return. What is the next
step for the taxpayer?
A. Submit an objection with the evidence provided.
B. Pay the tax due and then file the objection.
C. Appeal directly to the Tax Appeals Tribunal.
D. Wait for a demand notice before taking action.

Answer: B. Pay the tax due and then file the objection.

17. Scenario: A taxpayer is leaving Uganda permanently and has an outstanding tax liability.
What action can the Commissioner take to secure the payment?
A. Issue a demand notice with a 28-day deadline.
B. Request the taxpayer to pay through mobile money.
C. Notify the immigration control officer to prevent the taxpayer from leaving.
D. File a case in the High Court.

Answer: C. Notify the immigration control officer to prevent the taxpayer from leaving.

Numerical Aptitude
 18. A company pays provisional tax in two installments. If the total provisional tax due for
the year is UGX 10,000,000, how much should the company pay in each installment?
Answer: UGX 5,000,000

19. An individual pays provisional tax in four installments. If their total tax liability is UGX
8,000,000, how much is due per installment?
Answer: UGX 2,000,000

Question 1:
Which of the following is NOT considered an allowable deduction under the Income Tax Act?
a) Interest on a loan used for business purposes
b) Repair expenses for an office building
c) Purchase of a motor vehicle
d) Depreciation allowance for equipment
Answer: c) Purchase of a motor vehicle

Question 2:
What is the rate of depreciation allowed for an industrial building under Uganda’s tax laws?
a) 5% on a straight-line basis
b) 10% on a reducing balance basis
c) 20% for five years
d) 25% per year for four years
Answer: a) 5% on a straight-line basis

Question 3:
For a small business taxpayer whose gross turnover is UGX 40 million with records, what is
their annual presumptive tax?
a) UGX 80,000
b) UGX 200,000
c) UGX 100,000
d) UGX 140,000
Answer: b) UGX 200,000

Question 4:
What is the chargeable income threshold beyond which an additional 10% tax is charged for
resident individuals?
a) UGX 10 million
b) UGX 120 million
c) UGX 150 million
d) UGX 180 million
Answer: b) UGX 120 million

2. Numerical Questions
Question 5:
Mukasa earns UGX 75 million annually from a business where he keeps records. Calculate the
presumptive tax payable.
Solution:

● Tax = UGX 180,000 + 0.6% of (75,000,000 – 50,000,000)

● = UGX 180,000 + 0.006 × 25,000,000
● = UGX 180,000 + UGX 150,000
● Answer: UGX 330,000

Question 6:
A taxpayer has a chargeable income of UGX 6,000,000. Calculate their individual income tax.
Solution:

● For income exceeding UGX 4,920,000: Tax = UGX 300,000 + 30% of (6,000,000 – 4,920,000)
● = UGX 300,000 + 30% × 1,080,000
● = UGX 300,000 + UGX 324,000
● Answer: UGX 624,000

3. Fill in the Blanks

Question 7:
The presumptive tax for a business with a turnover of UGX 90 million without records is
________.
Answer: UGX 900,000
Question 8:
Startup costs for a business are deductible at a rate of _______ per year for four years.
Answer: 25%

4. True or False
Question 9:
A non-resident taxpayer is charged income tax only on income derived from sources within
Uganda.
Answer: True
Question 10:
A person can opt out of the presumptive tax regime by filing financial statements and notifying
the Commissioner in writing.
Answer: True

5. Scenario-Based Question
Question 11:
A resident individual earns the following:

● UGX 3,000,000 from employment

● UGX 5,000,000 from a rental property
● UGX 8,000,000 from a business

Determine their total income tax.

Solution:

● Income tax for UGX 3,000,000: 10% × (3,000,000 – 2,820,000) = UGX 18,000
● Income tax for UGX 5,000,000:
o UGX 120,000 + 20% × (4,920,000 – 4,020,000) = UGX 120,000 + UGX 180,000 = UGX
300,000
UGX 300,000 + 30% × (5,000,000 – 4,920,000) = UGX 300,000 + UGX 24,000 = UGX
o
324,000
● Income tax for UGX 8,000,000:
o UGX 300,000 + 30% × (8,000,000 – 4,920,000) = UGX 300,000 + UGX 924,000 = UGX
1,224,000

Total Tax: UGX 18,000 + UGX 324,000 + UGX 1,224,000 = UGX 1,566,000

Income Tax for Non-Resident Individuals

A non-resident individual has a chargeable income of Ushs 7,000,000. How much income tax is
he liable to pay?
A) Ushs 900,000
B) Ushs 1,242,000
C) Ushs 1,536,000
D) Ushs 1,740,000

2. Determination of Income Tax Liability

A company earns revenue of Ushs 250,000,000 from sales and incurs the following costs:

● Production costs: Ushs 60,000,000

 ● Administrative costs: Ushs 30,000,000

What is the company's corporation tax liability?

A) Ushs 48,000,000
B) Ushs 52,500,000
C) Ushs 54,000,000
D) Ushs 60,000,000

3. Pay As You Earn (PAYE)

An employee earns a gross monthly income of Ushs 380,000. Calculate the PAYE to be
deducted.
A) Ushs 15,000
B) Ushs 17,000
C) Ushs 19,000
D) Ushs 20,000

4. Allowable Deductions

Which of the following costs is NOT allowable as a deduction when calculating chargeable
income?
A) Annual rent for a store
B) Staff party expenses
C) Salaries for employees
D) Fuel expenses

5. Withholding Tax Deduction

A trader earns Ushs 100,000,000 from selling goods, and 6% withholding tax is deducted at the
source. How much withholding tax is deducted, and what is the net income after deduction?
A) Ushs 5,000,000; Ushs 95,000,000
B) Ushs 6,000,000; Ushs 94,000,000
C) Ushs 6,000,000; Ushs 90,000,000
D) Ushs 10,000,000; Ushs 90,000,000

6. PAYE Threshold
An employer pays an employee Ushs 250,000 per month. Which of the following statements is
correct?
A) PAYE of 10% applies
B) No PAYE is deductible because the income is below the threshold
C) PAYE of Ushs 15,000 applies
D) PAYE of Ushs 20,000 applies

7. High-Income Taxation for Non-Residents

If a non-resident individual has a chargeable income of Ushs 150,000,000, how much additional
tax is charged due to the 10% on income exceeding Ushs 120,000,000?
A) Ushs 2,000,000
B) Ushs 3,000,000
C) Ushs 5,000,000
D) Ushs 10,000,000

8. Gross Income Calculation

Alech earns the following monthly amounts:

● Salary: Ushs 200,000

● Transport allowance: Ushs 75,000
● Medical allowance: Ushs 95,000

What is his gross monthly income?

A) Ushs 200,000
B) Ushs 275,000
C) Ushs 370,000
D) Ushs 395,000

9. PAYE Calculation for Alech

Using Alech’s gross monthly income (Ushs 370,000), calculate the PAYE deducted.
A) Ushs 10,000
B) Ushs 15,000
C) Ushs 17,000
D) Ushs 20,000
10. Corporation Tax Rate

What is the tax rate applied to a company’s chargeable income in Uganda?

A) 20%
B) 25%
C) 30%
D) 35%

uestion 1
What is the withholding tax rate for payments on professional fees to a resident professional?
a) 10%
b) 15%
c) 6%
d) 5%
Answer: c) 6%

Question 2
A resident company pays Ushs 20,000,000 in dividends to a resident shareholder. What is the
withholding tax rate applicable if the company is listed on the stock exchange?
a) 15%
b) 10%
c) 6%
d) 20%
Answer: b) 10%

Question 3
How much withholding tax is deducted on winnings from betting or gaming?
a) 6%
b) 10%
c) 15%
d) 20%
Answer: c) 15%

Question 4
If an individual imports goods into Uganda with a Customs Value of Ushs 50,000,000, how
much withholding tax is payable on the imports?
a) Ushs 2,500,000
b) Ushs 3,000,000
c) Ushs 4,000,000
d) Ushs 6,000,000
Answer: b) Ushs 3,000,000 (6% of Ushs 50,000,000)

Question 5
Who is responsible for remitting withheld tax to the Uganda Revenue Authority (URA)?
a) The payee
b) The withholding agent
c) The supplier
d) The Commissioner General
Answer: b) The withholding agent

2. True or False
Question 6
Withholding tax is a final tax for all transactions.
Answer: False (It is a final tax in some cases, such as withholding on interest paid to
individuals.)
Question 7
If a withholding agent fails to withhold tax, they are personally liable to pay the tax along with
penalties and interest.
Answer: True
Question 8
For withholding tax on airtime distribution commissions, the rate is 15%.
Answer: False (The rate is 10%.)
Question 9
Records of payments and corresponding withheld tax must be maintained for a minimum of five
years.
Answer: True
Question 10
A withholding agent must remit withheld tax to URA within 30 days of the end of the month in
which the payment was made.
Answer: False (It must be remitted within 15 days.)

3. Fill in the Blanks

Question 11
Withholding tax on payments to foreign entertainers and sports persons is charged at a rate of
_________.
Answer: 15%
Question 12
A withholding tax credit certificate must be issued to the _________ after tax is withheld.
Answer: Payee
Question 13
Withholding tax on professional fees is not applicable to professionals who are _________.
Answer: Regularly compliant with the obligations under the Income Tax Act.
Question 14
The withholding tax rate for commissions paid to insurance agents is _________.
Answer: 10%
Question 15
Payments for goods and services exceeding Ushs _________ are subject to 6% withholding tax.
Answer: 1,000,000

4. Scenario-Based Questions
Question 16
Scenario: Kato supplies goods worth Ushs 80,000,000 to XYZ Ltd. The withholding tax rate is
6%. How much will XYZ Ltd remit to URA on behalf of Kato, and what net amount will Kato
receive?
Answer:

● Withholding tax = Ushs 80,000,000 × 6% = Ushs 4,800,000

● Net amount received by Kato = Ushs 80,000,000 – Ushs 4,800,000 = Ushs 75,200,000

Question 17
Scenario: A withholding agent fails to remit withheld tax of Ushs 10,000,000 to URA. What are
the consequences?
Answer:

● The agent is personally liable to pay the withheld tax (Ushs 10,000,000) along with any penalties
and interest. The agent may recover the amount from the payee afterward.

5. Numerical Questions
Question 18
A telecommunication service provider pays Ushs 20,000,000 in commissions to an agent for
airtime distribution. Calculate the withholding tax.
Answer:

● Withholding tax = Ushs 20,000,000 × 10% = Ushs 2,000,000

Question 19
A resident company pays a dividend of Ushs 15,000,000 to a shareholder. Calculate the
withholding tax if the dividend income is taxable.
Answer:

● Withholding tax = Ushs 15,000,000 × 15% = Ushs 2,250,000