Yesterday, the Uganda Revenue Authority issued a public notice adjusting the Pay As You Earn (PAYE) rate for employees with secondary formal employment that exceeds 10 million shillings from 30 to 40 percent.
According to URA, the new adjustment had been in place since 2012, but the enforcement was made this month to add to the government’s revenue.
“This financial year, we are mobilizing more resources for government expenditures than ever before because this year there were no tax policies,” said the URA Spokesperson Ibrahim Bbosa while speaking to James Onen during the Fatboy Show.
“ We are to work smarter, more efficiently to plug leakages and do arrears management. In instances where there were revenue leakages either because of a misreporting, we are doing this cleaning, and this endeavor alone is projected to bring in about 18 billion shillings,” he added.
Mr. Bbosa informed RX Radio that the change will affect more than 33,000 Ugandans with secondary employment.
Primary employment refers to the initial formal employment one has, and any other formal employment is secondary. Previously the URA has been deducting a PAYE of 30 percent for employees earning 10 million of primary employment.
The adjustment will see salary earners receiving 10 million from more than one job in the formal sector have a PAYE deduction of 40 percent from both primary and secondary employment.
According to URA, the adjustment will not affect the personal businesses of the salary earner but rather their formal jobs.
“If you have a restaurant or a salon, rentals as a side hustle, that is a business, and you will pay income tax. The adjustment is strictly for formal employment and people with this kind of contract,” he clarified.
The Fatboy show is hosted by James Onen aka Fatboy, Olive, and Sarah every weekday from 6 am to 10 am on RX Radio.