Uganda

Corporate - Significant developments

Last reviewed - 12 January 2026

The following tax changes are contained in the 2025 Income Tax Amendment Act:

Introduction of an income tax exemption for businesses established by citizens after 1 July 2025 for a period of three years, subject to the following criteria:
- The business should be registered with an investment capital not exceeding 500 million Ugandan shillings (UGX).
- The citizen or their associate should not have previously benefited from the exemption.
- The citizen will be required to file a tax return as well as a business information return in the format that will be prescribed by the Commissioner General.
Amendment to broaden the definition of reorganisation for rollover relief to mean "transaction in which a person transfers their assets to another person, other than an individual controlled by the transferor or the shareholders, following which the stock of the transferee is distributed". The intention is to exempt transactions where an individual transfers assets to a company that is under their control from taxation of capital gains.
Clarification that the 5% digital services tax (DST) will not apply on income derived by a non-resident from providing digital services to its associate in Uganda. However, such income will be subjected to the normal withholding tax (WHT) applicable on non-resident payments.
The list of listed institutions exempt from income tax was expanded to add the International Atomic Energy Agency (IAEA).

The following tax changes are contained in the 2025 VAT Amendment Act:

Expansion of the scope of activities that fall within the scope of schemes that taxpayers use to obtain undue tax benefits to include imports of goods under separate consignments, which if aggregated would qualify the importer to be registered under the VAT Act.
The list of Public International Organisations (entitled to certain VAT reliefs) is expanded to include the United Nations related agencies and specialised agencies.
The list of exempt supplies in the Third Schedule of the VAT Act was modified to add/remove the following items:
- Replacing the exemption of the supply of composite lanterns with the supply of solar lanterns.
- Expanding the exemption of the supply of wet processing operations, textile machinery spare parts to include industrial consumables for textile production, textile manufacturing machinery and equipment.
- Removing the supply of billets from the VAT exemption list.
- Include the supply of biomass pellets as an exempt supply.
The list of zero-rated supplies in the Fourth Schedule of the VAT Act was expanded to include the supply of aircraft.

The following excise duty changes are contained in the Excise Duty (Amendment) Act, 2025:

Introduction of a mechanism for remission of duty paid on ex-factory goods under the Excise Duty Act, subject to certain conditions, such as proof that the duty was paid on damaged and expired goods, goods delivery documentation, report indicating the extent and cause of the damage issued by a competent authority, etc.
Revision of the excise duty rates on certain goods and services under Schedule 2 of the Act, such as:
- Increase in the rate on cigarettes: Soft cap (locally manufactured and imported) from UGX 55,000 and UGX 75,000 per 1,000 sticks, respectively, to UGX 65,000 and UGX 150,000 per 1,000 sticks, respectively.
- Increase in the rate on beer whose local raw material content, excluding water, is at least 75% from 30% or UGX 650 per litre, whichever is higher, to 30% or UGX 900 per litre, whichever is higher.

The following stamp duty changes are contained in the Stamp Duty (Amendment) Act, 2025:

Introducing a nil stamp duty on any agreement or memorandum of an agreement and on a mortgage deed. This is intended to lower the financial burden on businesses and individuals.

The following tax changes are contained in the Tax Procedures Code (Amendment) Act, 2025:

Increase in the tax amnesty period for the waiver of interest and penalties outstanding as at 30 June 2024 if principal tax is paid by 30 June 2026. Partial payment of principal tax will result in a pro-rata waiver of penalties and interest. This is intended to encourage compliance and provide relief to businesses.
Replacement of Tax Identification Numbers (TINs) with the following:
- National Identification Numbers (NINs) for individuals as issued by the National Identification Registration Authority (NIRA).
- Registration numbers issued by Uganda Registration Services Bureau in case of a person who is a non-individuals.
- A tax identification number issued by a foreign tax authority with whom Uganda has a tax treaty or agreement for exchange of information.
Reduction of the penalty from UGX 6 million per invoice to twice the tax owed by a taxpayer for non-compliance with the Electronic Fiscal Receipting and Invoicing System (EFRIS).
Introduction of a requirement for casino, gaming, or betting operators to conduct transactions through a centralised payment gateway system licensed
by the Bank of Uganda and linked to the Uganda Revenue Authority electronic notice system.
Introduction of a requirement for entities granted tax exemptions to continuously meet the relevant exemption criteria. A taxpayer who fails to comply shall be liable to pay the tax due for the period for which the taxpayer fails to maintain such requirements.

Introduction of 1% import declaration levy and 1.5% infrastructure levy on the customs value of all goods imported into the country for home use, with the exception of the following:
- Goods listed in the fifth schedule of the East African Community Customs Management Act (EACCMA) that are exempted from payment of customs duty.
- Plant and machinery as prescribed under chapter 84 and 85 of the EACCMA.
- Goods under a special operating framework with the government of Uganda (special projects executed on behalf of the government with national interest).
Introduction of export levy of USD 10 per metric tonne on wheat bran, cotton cake, and maize bran.