Presentation by Keith Kalyegira, Chief Executive Officer, Capital Markets Authority, at the Conference on Reshaping the tax system to support the Financial Sector Development Strategy (FSDS) Kampala, Uganda, 14th–15th December 2022 The two-day conference was convened by Uganda's Ministry of Finance, Planning and Economic Development, and co-hosted by ICTD's DIGITAX Research Programme and TaxDev.

1. Keith Kalyegira
Chief Executive Officer,
Capital Markets Authority
By

2. 1. Introduction
2. Current taxation of Uganda’s Capital
Markets
3. Other Considerations

4.  These are markets where financial securities like shares, bonds, units in collective
investment schemes and derivative are traded.
 CMA is a statutory body, established in 1996 by the Capital Markets Authority Act
(Cap 84) as amended, to promote, develop and regulate the capital markets
industry.

5.  Total of UGX 5.4 trillion has been raised in the equity market
Type of Offer Amount raised (Ugx billion)
Initial Public offer 983.3
Secondary offer 322
Rights issue 237
Total 1,542.3

6.  The value of all listed domestic companies stands at UGX 7,159 billion as at the
end of 12th December 2022.
Uganda Clays
14 bn UGX
Listed Jan. 2000
BAT (Uganda)
736 bn UGX
Listed Oct. 2000
Bank of Baroda
213 bn UGX
Listed Nov. 2003
New Vision
12 bn UGX
Listed Dec. 2004
DFCU Group
406 bn UGX
Listed Oct. 2004
Stanbic Bank
1,177 bn UGX
Listed Jan. 2007
National Insurance Corporation
11 bn UGX
Listed Mar. 2010
Umeme
341 bn UGX
Listed Nov-2012
Cipla
219 bn UGX
Listed Sept. 2018
MTN
4,030 bn UGX
Listed Dec. 2021

7.  Total of UGX 288.7 billion has been raised in the corporate debt market

8. Trends in Collective Investment Schemes (2013-2021)

10. Product Current Taxation Recommendation
Dividends WHT of 10% for listed companies Lower WHT to 5%. In Kenya WHT
is 5% for residents and 15% for non
residents
Interest on corporate bonds WHT of 10% Lower to 5%. Rate is 10% in Kenya
and Tanzania and 0% in Mauritius
Interest on Treasury bonds below
10 years
WHT of 20% Lower to 15% as is the case in
Kenya. Rate is 5% in Rwanda and
0% in Tanzania
Interest on Treasury bonds above
10 years
WHT of 10% Lower to 5% (Rwanda) or 0%
(Tanzania)
Special Purpose Vehicles (SPVs) Stamp duty of 1.5% Lower stamp duty to 1% (Kenya) or
0% (Rwanda)
CIS distribution to unit holders Section 21(1) (t) of the ITA exempts
the income of a Collective
Investment Scheme from tax to the
extent of distribution of the income
MoFPED is working on providing
clarity on the tax exempt status of
CISs. We recommend that
distribution to unit holders remain
tax exempt.

11. invests in the fund
manages the fund
General Partners
/Fund Manager
(WHT on management
fees at 6% if the Fund
Manager is resident in
Uganda and 15% if the
Fund Manager is a
non-resident)
Limited Partners/
Shareholders
(Withholding tax on
dividends from the fund
at 15%)
Private Equity Fund
(Corporate tax on income
at 30%;
WHT tax on dividends
from investee companies
at 15%; &
CGT on disposal of
interest in investees at
30%)
Investee Company
A Investee Company
B
Investee Company C
All pay corporate tax on income at 30%
Effective tax rate on a PE
investor is 65% of income
earned

12.  Exempt PE funds registered with CMA from 30% corporate tax (as PE funds are
pass-through vehicles).
 Reduce the WHT rate on dividend payments from investee companies to PE
funds from 15% to 10%, similar to that paid on listed company dividends
 Reduce the stamp duty rate on the transfer of shares of investee companies
receiving or that have received PE financing from 1.5% to 1%
 Exempt PE funds registered with CMA from Capital Gains tax as a result of
disposal of interest in investee companies

14.  Grant a three-year tax amnesty to companies following a material restatement of
financials prior to listing on an exchange, companies that issue bonds, and to
companies that obtain private equity investment;
 Amend the Income Tax Act to provide clarity on waiver of capital gains tax on
gains realised by those selling shares in private companies when such companies
become public;
 Introduce preferential corporation tax for companies that go public; and

15. “More investment sins are probably committed by otherwise quite
intelligent people because of "tax considerations" than from any other
cause.” – Warren Buffett