Every business trading from premises in Kampala needs a trading licence from the Kampala Capital City Authority, and every one of those licences runs out on the same day. KCCA's guidance describes the licence as a calendar-year tax, payable before commencement of business on 1 January each year and expiring on 31 December. With the fourth quarter under way, this is the time to gather the paperwork so that January does not begin with a locked shop.
What the licence is and who needs it
KCCA defines a licence as permission granted on application to a controlling authority to do something in a prescribed manner, and trading as the selling of goods and services for which a licence is required, in any trading premises. A premise includes any structure attached to the land, permanent or temporary. The governing law is the Trade Licensing Act Cap 101, with its 2000 and 2015 amendments.
The obligation falls on any person carrying out business in KCCA's jurisdiction, with the exemptions in section 8(2) of the Act. KCCA lists among them any trade carried on in a market, farmers and dairy persons selling their own produce, and handicraft makers working from their residence. A shop, a salon, a restaurant, a pharmacy or an office all need one.
Documents to bring
KCCA's FAQ page lists, for nationals: identification (passport, driving permit or voter's card), the original trading licence for the previous year for an existing business, the original KCCA receipt for the previous year, and for a new business the original certificate of incorporation plus the rent receipt and tenancy agreement from the landlord. Applicants must be 18 or over. Non-nationals also need clearance from the Ministry of Trade, Industry and Cooperatives.
KCCA's printed trading licence guide adds two identifiers to have ready: your City Operator Identification Number (COIN), found on the previous year's licence or issued on application for a start-up, and your Business Registration Number (BRN) from the certificate of registration. The same guide notes that government institutions may require a TIN before issuing any licence, and that the Business Names Registration Act, enforced by URSB, requires all persons conducting business to be registered. In short: URSB registration, TIN, COIN, BRN, then licence.
How the fee is set
Fees are assessed from schedules issued by the Minister of Trade under the Trade (Licensing) (Grade of Business Areas) instrument, and the grade depends on where in the city the premises sit. KCCA's published schedule of revised trading licence rates shows four grades. A few examples from it, in UGX across Grades I to IV: retailers 210,000, 78,750, 84,000 and 31,500; a restaurant 187,500, 90,000, 75,000 and 36,000; a pharmacy 600,000, 315,000, 240,000 and 126,000; a boutique or beauty salon 210,000, 131,250, 84,000 and 52,500; a supermarket 1,125,000 in Grades I and II and 450,000 in Grades III and IV. Transfer and duplicate licence fees are UGX 7,500. The schedule carries no date, and some rows look inconsistent, so treat it as a guide and confirm your own assessment with your Division revenue office.
Once assessed, a revenue officer issues a KCCA bank payment advice form, you pay at a designated bank, and the receipt is presented at the Division office for the certificate. KCCA's guide says the licence is issued immediately on submission of the documents and payment, and that applications can be made online or at the Division offices in Kawempe, Nakawa, Lubaga, Makindye and Central.
The local service tax that comes with it
Business owners in Kampala pay local service tax once every twelve months, before being issued with or together with the trading licence, according to KCCA's local service tax FAQ. The rate for a business is set by monthly turnover in bands, rising to UGX 100,000 a year for turnover above UGX 10,000,000 a month. Expect the two assessments to arrive together and budget for both.
Penalties
KCCA states that failing to pay, obstructing an officer or giving false information is punishable on conviction by a fine or imprisonment not exceeding six months, or both. The practical penalty for most traders is the disruption of an enforcement visit in the first weeks of the year.
A short plan for the quarter
- Find this year's licence and KCCA receipt and note the COIN.
- Check that your URSB registration and TIN details match what is on the licence.
- Confirm the grade of your premises and the fee for your category with your Division office.
- Set aside the licence fee and the local service tax together.
- Pay in December and display the new licence on 1 January.
A trading licence is one of the smaller amounts a business pays each year. It is also the one document an enforcement officer asks to see first.
Sources
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