Most Common URA Penalty Triggers
| Mistake | Penalty | How to Avoid |
|---|---|---|
| Late PAYE filing | UGX 200,000/month | File by 15th — set calendar reminder |
| Late PAYE payment | 2% interest/month | Pay same day as filing |
| Late VAT return | UGX 200,000/month | File by 15th even if nil return |
| Not deducting WHT | Employer liable for full tax + interest | Deduct WHT on every qualifying payment |
| Incorrect PAYE | Back tax + 2%/month interest | Use correct tax bands, include all allowances |
| Failure to register PAYE | UGX 200,000 + all back tax | Register when first qualifying employee hired |
Voluntary Disclosure — Come Clean Before URA Finds You
If you have historical tax arrears, voluntary disclosure to URA significantly reduces penalties. Benefits: reduced or waived penalties, interest may be negotiated, avoids criminal prosecution, establishes goodwill before any audit.
Building a Compliant Tax System
- Set recurring monthly reminders for the 15th — PAYE, NSSF, VAT, WHT all due same day
- Dedicated payroll officer or outsource — don't leave payroll to a general accountant
- Quarterly internal audit of payroll calculations before URA does it for you
- Retain all payroll records, URA receipts, NSSF schedules for minimum 7 years