Rédaction Africa Links 24 with Uganda Monitor
Published on 2024-04-15 08:04:23
The recent implementation of a five percent withholding tax on gains from land sales in cities and municipalities has sparked a heated debate. While valid points have been raised, one crucial factor seems to have been overlooked – the method of assessment for such an increment and who should be responsible for it.
A gain in value is not the same as a price, with the former referring to the perceived worth of a property to the buyer and the latter being the actual amount paid for it. It has been suggested to rely on sales agreements rather than valuations conducted by registered valuers. However, professional valuers with academic and practical experience consider various factors to ensure that the burden is not unfairly placed on unsuspecting property owners.
One example cited is the property tax levied by cities and municipalities, which is based on assessments in a valuation roll compiled by registered valuers. It is imperative that the proposed tax relies on professional valuations to ensure accuracy and fairness.
Valuations are conducted for a variety of purposes such as sales, purchases, compensation, financial reporting, and more. Each valuation has its rationale and basis, with a report bearing the stamp and name of a registered valuer who can defend their valuation if necessary.
Relying on sale agreements for taxation purposes can be problematic, as they may include hidden payments to intermediaries that do not benefit the property owner. Additionally, there are no strict rules governing sale agreements and their accuracy, making them unreliable for tax assessments.
Therefore, a tax assessment should be conducted by a registered valuer in Uganda, who can be either in private or public practice. Professional competence is not limited to government employees, and the input of registered valuers is crucial to ensure fair and accurate taxation.
The reliance on professional valuations and registered valuers is essential to avoid distortions in the property market caused by speculative pricing. Every property sale or purchase should be accompanied by a valuation report to ensure transparency and accuracy in transactions.
Valuation reports may incur additional costs, but they are essential to consider the time value of money and market forces that may affect property prices. Neglecting the input of registered valuers can lead to misinterpretations of property value and unjust taxation on property owners.
Overall, it is vital to consider all factors that may affect property value, such as renovations and changes in land status, and to involve registered valuers in the assessment process. Their expertise and experience are invaluable in ensuring fair and accurate taxation in the real estate sector.
Read the original article on Uganda Monitor
