Private security firms seek PAYE, VAT exemption

KAMPALA - Private security companies are pushing for a Value Added Tax (VAT) exemption on their services, arguing that their role as first responders and key contributors to national security warrants relief from the heavy tax burden.

Uganda Private Security Association (TUPSA)  chairperson Grace Matsiko echoed this on Thursday, September 25, 2025, during a meeting with Parliament's committee on defence and internal affairs chaired by Nyabushozi County MP Wilson Kajwengye (NRM).

The engagement accrued from an earlier petition to Parliament, which was signed by over 50 security company executives.

“Our capacity has been decimated by taxes. Mr. Chairman, we want VAT exemption on the supply of private security services because we believe we are contributing to a national security agenda. We are the first responders. If you drive in Kampala, outside this Parliament, which is guarded by the Police, most institutions are in our hands. You remember the bombing at next to Parliament, the first responder was a private security guard,” Matsiko contended.

According to PricewaterhouseCoopers (PWC), as of September 2025, the standard Value Added Tax (VAT) rate in Uganda stood at 18 per cent.

However, Matsiko was stopped in his tracks by committee chairperson Kajwengye.

“That is entirely true but while all the assets are in your hands, they are paid for. Services are not free, right?” Kajwengye posed.

“It should be that when I am presenting the proposal on the floor of Parliament, it should be that others will buy into this. Otherwise, I shouldn’t sound ridiculous,” he added.

PAYE exemption

Besides that, TUPSA, which says it collectively employs 100,000 personnel in guard services and logistics, wants its employees exempted from Pay As You Earn Tax (PAYE).

PAYE is a type of income tax deducted directly from an employee’s salary by their employer and remitted to the Uganda Revenue Authority (URA). It is a monthly tax on earnings that varies according to the employee’s income level.

“Under Section 21 of the Income Tax Act, exempt income includes official income of a person employed in the Uganda People’s Defence Forces (UPDF), Uganda Police. We are an auxiliary or supplementary force, I think we are not asking too much,” Matsiko said.

Kajwengye further explained that Parliament exempts national security agencies from certain scrutiny because it recognises that their personnel are lowly paid. He added that these pay scales are set by laws passed by the House, unlike private companies, which have the freedom to determine what they pay their workers.

“If we say we exempt, yet the salaries of UPDF and Prisons come here. It's actually my committee which recently enhanced its salaries. We put an exemption because we know their salaries are low. For you, nobody sets margins. You can pay shillings 10 million, you can also pay 50,000,” he reasoned.

Sector players speak out

According to Brenda Mugasha, the chief operations officer of Saracen, the Government has not exhaustively enrolled sector players on URA’s Business to Government platform, facilitating business operations.

“It (platform) is mostly with oil companies and some Government entities. However, they have not exhaustively put everyone. The Government does not pay on time. At times, we have a bill of more than eight months sitting somewhere in a Government entity. However, you are paying VAT, salaries and the National Social Security Fund (NSSF),” Mugasha remarked.

That said, Private security companies say their business is under severe strain.

Citing costs such as shillings two million in weapon permits, which they have to meet. On top of the actual price of guns, which range from two million to seven million depending on the make, 70,000 for marking and 120,000 for gun deployment, among other charges.

However, the committee chairperson vowed to thoroughly engage with all stakeholders to ensure stability and proper oversight.