Foreign tax credit
A resident taxpayer is entitled to a foreign tax credit for any foreign income tax paid by the taxpayer in respect of foreign-source income included in the gross income of the taxpayer. The foreign tax credit allowed is subject to the income tax rate (i.e. 30%) in Uganda.
Tax holidays for exporters
A tax holiday of ten years is available to exporters who export at least 80% of their produce of finished goods, subject to certain conditions.
Scientific research expenditure, training expenditure, and mineral exploration expenditure
A 100% allowance is available for scientific research expenditure, training expenditure, and mineral exploration expenditure in the year of expenditure.
Incentives for the importation of plant and machinery
Plant and machinery is exempt from customs duty on importation. Additionally, a VAT deferral facility is available where VAT is deferred on importation of plant and machinery and subsequently waived upon approval by the relevant authorities.
A deduction of 2% of income tax payable is granted to any employer who can prove to the URA that at least 5% of their employees on a full-time basis are people with disabilities.
Certain income and bodies are exempt from tax. These include income derived from agro processing and from exportation of consumer and capital goods (subject to certain conditions), the income of Bujagali Hydro Power Project up to 30 June 2022, the income of a savings and credit co-operative society up to 30 June 2027, and bodies established by law for the purpose of regulating the conduct of professionals, such as the Uganda Law Society and Institute of Certified Public Accountants.
There is a new five-year income tax exemption for developers and operators in industrial parks or free zones. The minimum capital investment is USD 100 million for developers. The investment capital requirement for operators is USD 15 million for foreign operators and USD 5 million for Ugandan citizens.