Uganda | Does LST reduce Tax?
Employers have a statutory duty to determine and deduct LST from the salaries and wages of their employees based on the rates specified (maximum of UGX 100 000 per annum).
According to the Local Government Act, LST is levied on the monthly take –home salary. And by take-home means the net salary after deducting PAYE.
The LST regulations are inconsistent with the Income Tax Act in this regard.
In practice the LST is determined first, without considering PAYE.
The Income Tax Amendment Act would treat LST deductible from gross income therefore you require the LST amount to calculate PAYE.
LST is an allowable deduction for employees when computing PAYE.
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