Individual - Deductions

Last reviewed - 25 March 2024

Personal deductions

No deduction is allowed for any expenses that are private or domestic in nature. Such expenses include costs of maintaining the individual's family and residence, costs of commuting to work, and costs of clothing worn to work.

Charitable contributions

Individuals are allowed deductions for donations made to amateur sporting associations, religious institutions, charitable institutions, or educational institutions whose object is not for profit. However, the allowed amount cannot exceed 5% of the chargeable income.

Interest expenses

Interest incurred on a debt by an individual is only allowed to the extent that the debt obligation was incurred in the production of income included in gross income.

Personal allowances

The first UGX 2,820,000 of a resident individual's annual income falls in the nil tax bands and does not suffer tax. This is the amount allowed to an individual tax free.

Business deductions

In determining the income chargeable to tax, an individual is allowed by the law to make the following deductions from one’s gross income:

  • All the expenditures and losses that were incurred by a person during the year of income to the extent to which the expenditures and losses were incurred in the production of the income that is included in gross income.
  • Any loss incurred by the individual on the disposal of a business asset during the year of income.
  • Local service tax paid by an individual.

Any expenditure or loss that is business in nature but which is recoverable under any form of insurance or contract is not allowable for deduction.