Table of Contents
- Executive Summary: Uganda’s Tax Landscape in 2025
- Key Tax Authorities and Official Resources
- Major Tax Types: Income, VAT, Corporate, and More
- 2025 Tax Law Updates: Crucial Changes and Deadlines
- Compliance Essentials: Filing, Payment, and Enforcement
- Critical Statistics: Revenue Trends and Economic Impact
- Tax Incentives and Reliefs: Opportunities for Businesses and Individuals
- Challenges and Controversies: Common Pitfalls and Disputes
- Future Outlook: Tax Policy Proposals and Expected Reforms (2025–2030)
- Official Resources and Support: Where to Get Help and Stay Updated
- Sources & References
Executive Summary: Uganda’s Tax Landscape in 2025
Uganda’s tax landscape in 2025 is characterized by ongoing reforms aimed at broadening the tax base, improving compliance, and enhancing revenue mobilization to support national development objectives. The government, through the Uganda Revenue Authority (URA), continues to implement strategies to address tax evasion, expand digital tax services, and streamline tax administration processes. In the 2024/2025 National Budget, domestic revenue mobilization remains a priority, with tax revenue projected to finance approximately 60% of total government expenditure, reflecting a continued shift away from donor dependency (Ministry of Finance, Planning and Economic Development).
Recent legislative changes include amendments to the Income Tax Act, the Value Added Tax (VAT) Act, and the Excise Duty Act. Notably, the 2024/2025 Finance Act introduced adjustments to personal and corporate income tax brackets, enhancements to VAT administration, and new excise duties targeting digital and luxury goods. The standard VAT rate remains at 18%, while the corporate income tax rate is maintained at 30% for resident companies (Uganda Revenue Authority).
Tax compliance is a core focus, with the URA intensifying enforcement measures, particularly in the informal sector and among digital businesses. The rollout of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) for VAT-registered taxpayers continues to expand, supporting real-time monitoring and reducing under-declaration of sales. Additionally, the Digital Tax Stamps program has been broadened to cover more products, further curbing illicit trade and boosting compliance (Uganda Revenue Authority).
Key statistics highlight an upward trend in revenue collection: in the fiscal year 2022/2023, domestic tax collections grew by 16.4%, reaching UGX 23.13 trillion. The URA aims to increase total tax revenues to UGX 29.67 trillion in 2024/2025, driven by both policy changes and improved tax administration (Uganda Revenue Authority). Despite these gains, challenges remain, including a narrow tax base (tax-to-GDP ratio around 13.5%), widespread informality, and tax evasion.
Looking ahead, Uganda’s tax outlook for the next few years is shaped by ongoing digitalization, legislative reform, and regional harmonization efforts under the East African Community. The authorities are expected to continue strengthening tax policy and compliance measures to meet ambitious domestic revenue targets, invest in public services, and achieve fiscal sustainability (Ministry of Finance, Planning and Economic Development).
Key Tax Authorities and Official Resources
Uganda’s tax system is primarily administered and overseen by the Uganda Revenue Authority (URA), a statutory body established under the Uganda Revenue Authority Act, Cap 196. The URA is responsible for the assessment, collection, and enforcement of central government taxes, as well as providing taxpayer education and promoting voluntary compliance. The Ministry of Finance, Planning and Economic Development (MoFPED) plays a pivotal role in tax policy formulation and fiscal planning, ensuring alignment with national budgetary objectives and macroeconomic targets.
- Uganda Revenue Authority (URA): The URA administers major taxes including Income Tax, Value Added Tax (VAT), Excise Duty, Customs Duty, and Withholding Taxes. It also leads compliance drives, audits, and digital tax initiatives such as the Electronic Fiscal Receipting and Invoicing System (EFRIS) and Digital Tax Stamps (DTS). The URA’s Strategic Plan 2020/21–2024/25 emphasizes digital transformation, broadening the tax base, and combating illicit trade. Up-to-date taxpayer guidelines, forms, rates, and online services are accessible on the Uganda Revenue Authority website.
- Ministry of Finance, Planning and Economic Development (MoFPED): MoFPED is responsible for developing tax policy, drafting tax laws, and presenting annual Finance Bills to Parliament. The Ministry publishes national budgets, tax amendments, and medium-term revenue strategies, all available through the Ministry of Finance, Planning and Economic Development portal.
- Parliament of Uganda: The Parliament enacts tax legislation, debates tax policy proposals, and oversees government fiscal management. The Parliament of Uganda website provides access to enacted Finance Acts, Bills, and tax-related debates.
- Judiciary: The Ugandan courts, notably the Tax Appeals Tribunal (TAT) and the High Court, adjudicate tax disputes between taxpayers and the URA. The Tax Appeals Tribunal offers decisions and resources for dispute resolution.
- Official Legal Resources: The Uganda Legal Information Institute (ULII) hosts the full text of tax statutes, regulations, and court decisions, providing authoritative guidance on the legal framework.
For 2025 and the coming years, Uganda continues to modernize its tax administration and expand its digital infrastructure, aiming to improve compliance, close revenue gaps, and support sustainable development. All updates, new regulations, and compliance requirements are regularly published through these official channels.
Major Tax Types: Income, VAT, Corporate, and More
Uganda’s tax regime is governed by several key statutes, with major tax types including Income Tax, Value Added Tax (VAT), Corporate Income Tax, Excise Duty, and Customs Duties. The Uganda Revenue Authority (URA) is the principal body responsible for tax collection and enforcement.
- Income Tax: Both individuals and corporations are subject to income tax under the Income Tax Act Cap 340. For individuals, tax rates are progressive up to 40% for residents, with a threshold for tax-exempt income. Employment income, business income, and rental income are all taxable. Non-residents face a flat 10% tax on income sourced from Uganda.
- Corporate Income Tax: Resident companies are taxed at a standard rate of 30% on worldwide income. Branches of foreign companies are also taxed at 30% on Ugandan-sourced income. Special regimes apply for small businesses (presumptive tax) and certain sectors such as mining and petroleum, with rates defined in sector-specific legislation (Uganda Revenue Authority).
- Value Added Tax (VAT): The VAT Act imposes a standard 18% tax on most goods and services supplied in Uganda and on imports. Certain goods and services remain exempt or zero-rated, often in agriculture, education, and health sectors (Uganda Revenue Authority).
- Excise Duty: Excise duties are levied on selected goods and services, including alcohol, tobacco, fuel, and telecommunications. The rates and scope are reviewed annually in the national budget (Ministry of Finance, Planning and Economic Development).
- Customs Duties: As a member of the East African Community (EAC), Uganda applies the EAC Common External Tariff on imports from outside the bloc, with rates typically ranging from 0% to 35% depending on product classification (Uganda Revenue Authority).
Tax compliance has been a focus for authorities, with the URA introducing digital tax stamps, electronic fiscal devices, and online filing to boost collection and transparency. In FY2023/24, total tax collections surpassed UGX 25 trillion, with VAT and PAYE (employee tax) among the top contributors. The outlook for 2025 and beyond includes further digitization, expansion of the tax base, and legislative amendments to close loopholes, in line with Uganda’s domestic revenue mobilization strategy (Uganda Revenue Authority).
2025 Tax Law Updates: Crucial Changes and Deadlines
Uganda’s tax landscape in 2025 is characterized by significant legislative adjustments and a continued drive toward improved compliance and revenue mobilization. The major legal framework remains the Income Tax Act, the Value Added Tax (VAT) Act, and the Tax Procedures Code Act, all administered by the Uganda Revenue Authority (URA). For the fiscal year 2024/2025, Parliament enacted several amendments, which taxpayers and businesses must heed to ensure compliance and avoid penalties.
- Income Tax: The Income Tax (Amendment) Act, 2024 introduced changes effective July 1, 2024. Notably, the threshold for presumptive tax on small businesses was revised, increasing the scope of businesses eligible for simplified tax compliance. Furthermore, a withholding tax of 10% on payments for agricultural supplies has been introduced to widen the tax net (Uganda Revenue Authority).
- Value Added Tax (VAT): Amendments in the VAT (Amendment) Act, 2024 affect the list of exempt and zero-rated goods and services, impacting sectors such as agriculture, education, and health. The VAT registration threshold remains at UGX 150 million annual turnover, but compliance requirements have been tightened, including mandatory use of the Electronic Fiscal Receipting and Invoicing System (EFRIS) for all VAT-registered taxpayers (Uganda Revenue Authority).
- Excise Duty: The Excise Duty (Amendment) Act, 2024 revised rates on several products, including soft drinks, alcoholic beverages, and telecommunications, aimed at boosting revenue and aligning with regional policy harmonization efforts (Ministry of Finance, Planning and Economic Development).
- Tax Administration: The URA has intensified digitalization measures in 2025, requiring electronic filing and payment for all major tax types, and deploying analytics to identify non-compliance. The deadline for annual tax returns for individuals and companies remains June 30 each year, with monthly VAT and PAYE filings due by the 15th of the following month (Uganda Revenue Authority).
Key statistics from the URA indicate a projected revenue target of UGX 32.39 trillion for FY2024/25, up from UGX 29.67 trillion in the previous year. The government’s medium-term outlook involves broadening the tax base, enhancing digital compliance, and reducing reliance on external debt. Taxpayers are urged to closely monitor future amendments and adhere strictly to filing deadlines to avoid hefty penalties and interest (Ministry of Finance, Planning and Economic Development).
Compliance Essentials: Filing, Payment, and Enforcement
Uganda’s tax compliance regime is governed primarily by the Income Tax Act (Cap 340), the Value Added Tax Act, and the Tax Procedures Code Act, 2014. The Uganda Revenue Authority (URA) administers tax laws, oversees compliance, and enforces penalties for non-compliance. As of 2025, the government continues to focus on expanding the tax base and improving compliance through digitization and stricter enforcement.
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Filing Requirements:
Taxpayers are required to register for a Taxpayer Identification Number (TIN), file annual income tax returns, and, where applicable, monthly Value Added Tax (VAT) returns. Companies and individuals must file electronically via the Uganda Revenue Authority e-tax portal. The statutory deadline for income tax return filing is generally 30th June following the end of the financial year, with VAT returns due by the 15th day of the following month. -
Payment Procedures:
Tax payments—including Pay As You Earn (PAYE), corporate tax, withholding tax, and VAT—are made through authorized commercial banks or electronically via the URA payment platform. Receipts are provided digitally, and proof of payment must be retained for audit purposes. Outstanding taxes attract interest and penalties as stipulated by law. -
Enforcement and Audits:
The URA has intensified enforcement through risk-based audits, data matching, and third-party information. In 2025, the Authority continues to employ digital tools such as the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to monitor transactions and curb tax evasion (Uganda Revenue Authority). Non-compliance results in administrative penalties, interest on overdue taxes, and, in severe cases, prosecution. -
Key Statistics and Trends:
For the fiscal year 2023/24, the URA reported a tax revenue collection of UGX 23.7 trillion, reflecting a 16% year-on-year growth and a compliance rate of approximately 86% among registered taxpayers (Uganda Revenue Authority). The outlook for 2025 and beyond includes further integration of digital compliance tools and public awareness campaigns to boost voluntary compliance.
Looking ahead, Uganda’s tax compliance framework is expected to become increasingly automated, with enhanced taxpayer support and more robust enforcement. The URA’s strategic plan for 2024–2029 emphasizes modernization, transparency, and widening the tax net to improve fiscal sustainability (Uganda Revenue Authority).
Critical Statistics: Revenue Trends and Economic Impact
Uganda’s tax system remains a central pillar of public finance, reflecting both the challenges and opportunities inherent in a developing economy. Tax revenue performance in recent years has shown consistent growth, yet the tax-to-GDP ratio remains below regional averages, with important implications for fiscal sustainability and economic development.
According to the latest data published by the Uganda Revenue Authority, domestic revenue collection for the fiscal year 2023/24 reached UGX 25.2 trillion, representing a nominal growth of 15% compared to the previous year. The tax-to-GDP ratio, however, stood at approximately 13.5% in 2024, still lagging behind the average for Sub-Saharan Africa, which is around 16%. This gap underscores ongoing structural challenges in broadening the tax base and enhancing compliance.
Key sources of Uganda’s tax revenue include Value Added Tax (VAT), income taxes (corporate and personal), and excise duties. VAT remains a leading contributor, accounting for about 32% of total collections, followed by Pay-As-You-Earn (PAYE) and corporate income tax. Non-tax revenue, including government fees and licenses, is projected to grow modestly but remains a smaller portion of total revenue (Ministry of Finance, Planning and Economic Development).
Recent legislative reforms have targeted improved compliance and the digitalization of tax processes. The rollout of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), starting in 2021 and expanding through 2024/25, is expected to reduce VAT evasion and enhance real-time monitoring of transactions. Furthermore, amendments to the Income Tax Act and the introduction of a digital services tax reflect the government’s commitment to adapt to a changing economic landscape (Uganda Revenue Authority).
Despite these measures, challenges remain. The informal sector, estimated to constitute over 50% of economic activity, largely escapes the tax net. Compliance levels, while improving, are hampered by administrative bottlenecks and limited taxpayer education. The Ministry of Finance, Planning and Economic Development projects that, with sustained reforms, the tax-to-GDP ratio could reach 15% by 2026. This would significantly enhance the government’s capacity to finance public services and infrastructure, supporting Uganda’s aspirations for middle-income status.
In summary, Uganda’s tax revenue trends show positive momentum, driven by policy reforms and technological adoption. Meeting future targets will require deepening compliance, expanding the tax base, and continued investment in tax administration modernization.
Tax Incentives and Reliefs: Opportunities for Businesses and Individuals
Uganda continues to refine its tax incentive and relief frameworks as a means of fostering economic growth, attracting foreign direct investment (FDI), and supporting domestic enterprises. As of 2025, the government’s approach to tax incentives is guided by both fiscal strategy and the need to balance revenue generation with economic competitiveness. The Uganda Revenue Authority (URA) is responsible for administering tax incentives and ensuring compliance with the evolving regulatory landscape.
Key incentives for businesses are primarily embedded within the Income Tax Act (Cap 340) and the Value Added Tax Act (Cap 349). Notable provisions include exemptions for income derived from agro-processing, export-oriented activities, and investments in specific sectors such as manufacturing, energy, and information and communication technology (ICT). For example, businesses investing at least USD 10 million (foreign) or USD 1 million (domestic) in new industrial ventures outside Kampala qualify for ten-year income tax holidays, provided they meet employment and local sourcing thresholds. Additionally, capital allowances—ranging from 50% to 75%—are available for qualifying expenditures in priority sectors, especially for investments in plant and machinery.
Individuals benefit from reliefs such as the threshold for taxable income, which as of 2025 stands at UGX 2,820,000 annually, and allowable deductions for contributions to approved retirement funds. Furthermore, first-time homebuyers and small business owners with annual turnover below UGX 150 million may access simplified tax regimes or partial exemptions under the presumptive tax system (Income Tax Act).
In 2025, the Ugandan government has maintained a cautious approach to new tax holidays and exemptions, following recommendations to minimize revenue leakages and ensure that incentives are closely linked to demonstrable economic benefits. The Ministry of Finance, Planning and Economic Development regularly reviews the impact of incentives and has signaled ongoing reforms aimed at enhancing transparency, targeting, and post-incentive monitoring (Ministry of Finance, Planning and Economic Development). Compliance is reinforced by the requirement that all beneficiaries register with the URA and submit annual returns detailing their qualifying activities.
Statistically, tax incentives have contributed to increased investment in manufacturing and agro-processing, with FDI inflows reaching over USD 1.3 billion in 2023 and projected to rise modestly through 2025. However, the government remains vigilant against base erosion and profit shifting. Prospects for 2025 and beyond include the rationalization of incentives to sectors with high multiplier effects and the introduction of digital compliance tools to streamline access while curbing abuse (Uganda Revenue Authority).
Challenges and Controversies: Common Pitfalls and Disputes
Uganda’s tax regime in 2025 continues to face significant challenges and controversies, with compliance, administration, and dispute resolution remaining central issues. The country relies heavily on domestic revenue mobilization, but businesses and individuals often grapple with complex tax laws, frequent changes, and sometimes inconsistent enforcement. The Uganda Revenue Authority (URA) has introduced digital systems to streamline tax collection and curb evasion, yet compliance rates remain below targets, with tax-to-GDP ratio lingering below the sub-Saharan African average.
A persistent challenge is the broad informal sector, which constitutes over 40% of the economy. Many small enterprises operate outside the formal tax net, making enforcement difficult and shifting the tax burden onto a narrower base of registered taxpayers. Efforts to widen the tax base, such as digital tax stamps and e-invoicing, have sparked controversy over increased compliance costs and technical hurdles for small businesses (Uganda Revenue Authority).
Tax disputes have also risen, with the URA reporting a growing number of cases before the Tax Appeals Tribunal. Common disputes involve VAT assessments, transfer pricing, and interpretation of exemptions under the Income Tax Act. High-profile cases have highlighted ambiguities in the law and inconsistent application by tax officers. In response, the government launched tax education campaigns and published new practice notes, but many taxpayers still cite a lack of clarity and predictability in tax administration (Tax Appeals Tribunal).
Another controversy surrounds the frequent amendments to tax laws during annual budget cycles. In 2024, Parliament introduced new levies on digital services and increased excise duties on select goods, prompting backlash from affected industries. Critics argue that these changes, sometimes enacted with minimal stakeholder consultation, create uncertainty and hinder long-term business planning (Parliament of Uganda).
Looking ahead to 2025 and beyond, the government aims to further digitize tax processes and enhance risk-based audits. However, unless tax policy is simplified and enforcement becomes more consistent, Uganda will likely continue facing challenges in broadening compliance and reducing disputes. Stakeholder engagement, improved taxpayer services, and clearer legal provisions remain vital to addressing these persistent pitfalls and controversies in Uganda’s tax landscape.
Future Outlook: Tax Policy Proposals and Expected Reforms (2025–2030)
Uganda’s tax landscape is poised for significant reforms between 2025 and 2030 as the government seeks to strengthen domestic revenue mobilization, broaden the tax base, and enhance compliance. The overarching goal is to align fiscal policy with the country’s Vision 2040 and National Development Plan III, focusing on sustainable economic growth and reducing reliance on external borrowing.
In recent years, the Ugandan government has prioritized domestic resource mobilization as a core pillar of its fiscal strategy. The Ministry of Finance, Planning and Economic Development signaled in 2024 that more tax increases and new tax measures are likely in the 2025/26 fiscal year, targeting both direct and indirect taxes. This aligns with Uganda’s commitment to raise its tax-to-GDP ratio, which currently stands at approximately 13%—below the sub-Saharan Africa average of 16–18% (Uganda Revenue Authority).
Key tax policy proposals under consideration for the 2025–2030 period include:
- Broadening the Tax Base: Efforts will intensify to register and bring informal sector businesses into the tax net. This includes enhanced use of digital tools for taxpayer identification and onboarding.
- Tax Digitalization: The Uganda Revenue Authority (URA) is expected to expand e-tax services, increase real-time monitoring (e-invoicing, digital stamps), and implement data-driven compliance measures to reduce evasion.
- Review of VAT and Excise Policies: The government is reviewing exemptions and the structure of Value Added Tax (VAT), aiming to rationalize incentives and broaden the VAT base. Excise taxes on digital services, alcohol, and tobacco may also be adjusted.
- Environmental and Green Taxes: In line with global trends, new environmental levies are being explored to support climate resilience and sustainable development.
These reforms are anchored in Uganda’s 2024/25 Budget Speech and recent public statements by the URA. The government also intends to strengthen tax administration through capacity building, risk-based audits, and enhanced taxpayer education.
Looking forward, the outlook between 2025 and 2030 is for a more modernized, inclusive, and efficient tax system. If implemented effectively, these reforms could boost Uganda’s tax-to-GDP ratio toward regional averages, improve public service delivery, and underpin fiscal sustainability (Uganda Revenue Authority).
Official Resources and Support: Where to Get Help and Stay Updated
Navigating the complexities of Uganda’s tax system requires access to accurate, up-to-date resources and support. As tax policies and compliance requirements evolve into 2025 and beyond, both businesses and individuals are encouraged to rely on official channels to ensure compliance and maximize potential benefits.
- Uganda Revenue Authority (URA): The Uganda Revenue Authority is the principal government agency responsible for tax collection, administration, and enforcement in Uganda. The URA’s official website offers comprehensive guides, tax laws, downloadable forms, online payment portals, and updates on key changes in tax rates and procedures. Their e-services enable registration for Tax Identification Numbers (TINs), filing of returns, and payment of taxes entirely online.
- Ministry of Finance, Planning and Economic Development: The Ministry of Finance, Planning and Economic Development publishes annual national budget documents, tax policy statements, and statutory instruments that outline fiscal policy direction—including proposed amendments to tax laws for each financial year. These resources are crucial for understanding the broader context of Uganda’s tax environment.
- Legal Resources and Tax Law: For reference to the latest tax statutes, including the Income Tax Act, Value Added Tax Act, and Excise Duty Act, the Uganda Legal Information Institute provides free access to updated legislative texts, regulations, and key court decisions relating to tax matters.
- Taxpayer Education and Support: URA regularly organizes taxpayer education seminars, workshops, and outreach programs to help taxpayers understand their rights and obligations. Details and schedules can be found on the Uganda Revenue Authority website. Additionally, the URA operates a customer care center and a toll-free helpline (0800-117-000) for direct support.
- Professional Associations: Recognized professional bodies such as the Institute of Certified Public Accountants of Uganda (ICPAU) offer training, continuing professional development, and guidance on best practices in tax compliance and interpretation of evolving tax laws.
Staying informed through these official resources is essential as Uganda continues to modernize its tax administration and introduce reforms aimed at broadening the tax base, digitizing compliance, and enhancing transparency for the 2025 fiscal year and beyond.
