Table of Contents
- Executive Summary: Key Takeaways for 2025–2029
- Uganda’s Tax Framework: Laws, Authorities, and Current Structure
- Major Tax Types in Uganda: Income, VAT, Corporate, and Customs Duties
- Recent Reforms and 2025 Policy Changes: What’s New?
- Compliance Requirements: Registration, Filing, and Penalties
- Key Statistics: Revenue Trends, Rates, and Economic Impact
- Sector-Specific Taxation: Agriculture, Oil & Gas, SMEs, and Digital Economy
- Cross-Border Taxation: International Treaties and Transfer Pricing Rules
- Future Outlook: Projected Reforms and Strategic Opportunities (2025–2029)
- Official Resources: Where to Find the Latest Tax Laws and Guidance (ura.go.ug)
- Sources & References
Executive Summary: Key Takeaways for 2025–2029
Uganda’s tax landscape for 2025–2029 is characterized by ongoing reforms aimed at expanding the tax base, enhancing compliance, and supporting economic growth in line with the country’s Vision 2040 and National Development Plan III. The Uganda Revenue Authority (URA) continues to implement digitalization and automation initiatives to increase efficiency in tax administration and reduce leakages. Key tax laws remain anchored in the Income Tax Act (Cap. 340), Value Added Tax Act (Cap. 349), and Excise Duty Act (2014), with periodic amendments reflecting government priorities.
- Revenue Performance and Projections: For FY 2024/25, the government targets UGX 32.4 trillion in domestic revenue, up from UGX 29.6 trillion in 2023/24, reflecting a drive to finance 77% of the national budget domestically. The tax-to-GDP ratio is projected to reach 15.7% by 2025, with further incremental increases anticipated through 2029 as enforcement and compliance improve (Uganda Revenue Authority).
- Legal and Policy Developments: Amendments effective July 2024 introduce changes in VAT exemptions, digital services taxation, and excise duties on alcohol, tobacco, and telecommunications. The government is expected to continue fine-tuning tax policy to respond to domestic and international business trends, including the need for e-commerce regulation (Ministry of Finance, Planning and Economic Development).
- Compliance and Enforcement: The URA has intensified use of electronic fiscal devices (EFDs), the Digital Tax Stamps System, and integration of the e-Tax portal for real-time tax filing and payments. Penalties for late or non-compliance have increased, with ongoing taxpayer education to support voluntary compliance (Uganda Revenue Authority).
- International Taxation and Transfer Pricing: Uganda continues to strengthen transfer pricing regulations and cross-border information exchange in line with OECD standards and regional commitments under the East African Community. This is expected to enhance monitoring of multinational enterprises and address base erosion and profit shifting (Uganda Revenue Authority).
- Outlook: Over 2025–2029, Uganda’s tax system is set to become more robust, digitalized, and aligned with international best practices. Persistent challenges include addressing informality and ensuring equitable taxation, but reforms are expected to expand the tax base, improve efficiency, and increase revenue mobilization for sustainable development.
Uganda’s Tax Framework: Laws, Authorities, and Current Structure
Uganda’s tax framework is governed by a combination of statutes, regulations, and administrative bodies, with the primary responsibility for tax administration vested in the Uganda Revenue Authority (URA). The legal foundations of Uganda’s tax system are anchored in several key acts, including the Income Tax Act (Cap 340), Value Added Tax Act (Cap 349), Excise Duty Act, and the Tax Procedures Code Act, all periodically amended to align with fiscal policy objectives and regional commitments.
For the fiscal year 2025, the Ugandan government is pursuing an ambitious domestic revenue mobilization agenda. The tax structure comprises direct taxes—such as individual and corporate income tax, withholding tax, and rental income tax—and indirect taxes, including Value Added Tax (VAT) at a standard rate of 18%, excise duties, and import duties. The URA continues to enhance digital tax administration, with initiatives such as the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) targeting compliance among businesses and improving real-time revenue tracking.
Recent legislative updates reflect the government’s drive for efficiency and widening the tax base. Amendments in the 2024/2025 budget include adjustments to tax thresholds, new excisable products, and changes in VAT exemptions to streamline revenue collection and reduce leakages. The URA is also intensifying enforcement of mandatory Tax Identification Numbers (TINs) for business transactions and strengthening transfer pricing regulations to tackle base erosion and profit shifting, especially among multinational enterprises (Uganda Revenue Authority).
Compliance remains a top priority, with URA reporting improved tax-to-GDP ratios—estimated at approximately 14.2% in FY2023/24, with a government target to reach 16% by 2026 (Ministry of Finance, Planning and Economic Development). The authority continues to deploy taxpayer education campaigns, digital tax platforms, and risk-based audits to minimize evasion and foster voluntary compliance.
Looking ahead, Uganda’s tax outlook is shaped by both domestic imperatives and regional integration under the East African Community (EAC) protocols. The government aims to broaden the tax net, particularly within the informal sector, and further digitize tax collection processes. The anticipated results include enhanced revenue performance, sustainable public financing, and greater alignment with international tax standards.
Major Tax Types in Uganda: Income, VAT, Corporate, and Customs Duties
Uganda’s tax regime is principally administered by the Uganda Revenue Authority (URA), under the oversight of the Ministry of Finance, Planning and Economic Development. As Uganda advances toward its 2025 fiscal targets, the structure and administration of major tax types—income tax, Value Added Tax (VAT), corporate tax, and customs duties—are subject to ongoing reforms and compliance enhancements.
- Income Tax: Uganda’s income tax is governed by the Income Tax Act Cap 340. Personal income tax is imposed on a progressive scale, with resident individuals taxed between 10% and 40% depending on annual income brackets. The threshold for taxation and the rates are periodically reviewed in the annual Finance Acts, reflecting inflation and policy shifts. For 2025, the URA continues to emphasize digital tax administration and broadened taxpayer registration to increase compliance and revenue collection.
- Value Added Tax (VAT): VAT in Uganda is levied at a standard rate of 18% on most goods and services, with some exemptions and zero-rated supplies as outlined in the VAT Act Cap 349. The threshold for mandatory VAT registration remains at UGX 150 million annual turnover. The URA has increased its deployment of e-invoicing and digital transaction monitoring to improve compliance and reduce evasion.
- Corporate Tax: Resident companies are subject to a standard corporate income tax rate of 30%, as stipulated in the Income Tax Act. Special rates apply to mining, petroleum, and small businesses under certain incentive schemes. The government is reviewing tax incentives to ensure alignment with revenue mobilization goals and investment promotion.
- Customs Duties: Customs duties are governed by the East African Community Customs Management Act, with Uganda applying the Common External Tariff (CET) for imported goods. The rates generally range from 0% (for essential goods) to 35% (for finished products). Ongoing regional harmonization efforts are expected to streamline customs procedures and enhance cross-border trade compliance in 2025 and beyond.
In the 2025 outlook, Uganda is focusing on expanding its tax base, digitalizing tax processes, and tightening enforcement to meet medium-term revenue targets. The URA’s strategic plan aims to increase the tax-to-GDP ratio, which stood at around 13% in recent years, with the goal of surpassing 16% by the end of the decade. Enhanced taxpayer education and simplification of compliance procedures remain central to Uganda’s tax policy agenda (Uganda Revenue Authority).
Recent Reforms and 2025 Policy Changes: What’s New?
Uganda has undertaken a series of significant tax reforms in recent years, with several key changes either implemented in 2024 or scheduled for 2025. These reforms aim to broaden the tax base, improve compliance, and increase domestic revenue mobilization to support ambitious government spending and development goals.
One of the most notable reforms is the introduction of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which became mandatory for Value Added Tax (VAT)-registered businesses from July 2024. EFRIS requires businesses to electronically issue and transmit invoices and receipts to the Uganda Revenue Authority (URA) in real time. This measure is designed to curb under-declaration of sales, enhance transparency, and improve VAT collection efficiency. Non-compliance attracts significant penalties, signaling stricter enforcement going forward in 2025 Uganda Revenue Authority.
In the 2024/2025 national budget, several amendments to the Income Tax Act, VAT Act, and Excise Duty Act were passed to boost revenue. Key highlights include increased excise duties on alcoholic beverages, tobacco, and some telecommunications services, as well as expanded definitions of income subject to tax. The government also narrowed tax exemptions, particularly in sectors like agriculture and manufacturing, aiming to reduce revenue leakage and ensure equitable taxation Ministry of Finance, Planning and Economic Development.
Tax compliance remains a challenge, with the URA reporting a tax-to-GDP ratio of approximately 13% in 2023/24—below the East African Community (EAC) average. However, the URA has implemented measures to strengthen enforcement, including enhanced taxpayer education, expanded use of digital platforms for filing and payments, and increased audits. The authority has also targeted the informal sector, which accounts for a large portion of Uganda’s economy, through simplified tax regimes and presumptive taxes Uganda Revenue Authority.
Looking ahead, the government’s medium-term revenue strategy (2021/22–2025/26) sets a target to increase the tax-to-GDP ratio to at least 16% by 2026. Priorities for 2025 include further digitalization of tax administration, review of tax incentives to ensure value for money, and ongoing reforms to align with EAC harmonization efforts. As Uganda prepares for general elections in 2026, sustaining public trust through transparent tax policies and efficient service delivery will be critical for compliance and revenue performance Ministry of Finance, Planning and Economic Development.
Compliance Requirements: Registration, Filing, and Penalties
Uganda’s tax compliance framework is governed primarily by the Uganda Revenue Authority (URA) and is shaped by laws such as the Income Tax Act (Cap 340), the Value Added Tax Act (Cap 349), and the Tax Procedures Code Act, 2014. These laws outline comprehensive requirements for tax registration, filing, and penalties, with ongoing reforms aimed at enhancing compliance and digitalization for the 2025 tax year and beyond.
- Registration Requirements: All individuals, companies, partnerships, trusts, and associations with taxable income or engaged in business activities must register for a Taxpayer Identification Number (TIN) through the URA’s online portal. Registration is mandatory before commencing business operations, applying for licenses, or participating in government procurement. Non-resident entities with income sourced in Uganda or with a permanent establishment must also register. Recent updates emphasize streamlined e-registration to improve taxpayer onboarding and data integrity (Uganda Revenue Authority).
- Filing Obligations: Registered taxpayers are required to file annual income tax returns by June 30th following the end of the tax year (which coincides with the financial year for most businesses). Value Added Tax (VAT) returns must be filed monthly by the 15th day of the following month. Withholding tax, Pay As You Earn (PAYE), and other indirect tax obligations have their own monthly or transaction-based deadlines. All filings are to be made electronically via the URA e-Services platform, which has undergone continued enhancements for 2025 to reduce filing errors and improve accessibility (Uganda Revenue Authority).
- Penalties for Non-Compliance: Penalties for late registration, non-filing, or late filing are significant. For instance, late income tax returns attract a penalty of 2% of the tax due per month, while VAT late filing incurs a penalty of USh 200,000 for companies or USh 100,000 for individuals per month. Failure to register for a TIN or remit taxes can result in additional interest, criminal prosecution, or business closure orders. The URA continues to ramp up compliance enforcement, leveraging data analytics and third-party information to identify non-compliance (Uganda Revenue Authority).
The compliance landscape in Uganda is expected to become more stringent, with increased digital monitoring and automation. The 2025 outlook includes further integration of government systems, enhanced taxpayer education, and stricter enforcement, as the government seeks to broaden the tax base and improve revenue mobilization in line with national development priorities (Ministry of Finance, Planning and Economic Development).
Key Statistics: Revenue Trends, Rates, and Economic Impact
Uganda’s tax system is a critical pillar of government revenue, underpinning public expenditure and economic development. In the fiscal year 2023/2024, the Uganda Revenue Authority (URA) reported net revenue collections of UGX 25.2 trillion, surpassing targets and reflecting an upward trend in domestic resource mobilization. The total tax-to-GDP ratio stood at approximately 13.9%, which remains below the Sub-Saharan African average but shows steady improvement due to expanded enforcement and compliance measures (Uganda Revenue Authority).
The Ugandan tax regime is governed primarily by the Income Tax Act (Cap. 340), the Value Added Tax Act (Cap. 349), the Excise Duty Act (2014), and the Tax Procedures Code Act (2014). For the fiscal year 2024/2025, key tax rates are as follows:
- Corporate income tax: 30% for resident companies
- Personal income tax: progressive, ranging from 10% to 40% for individuals (Uganda Revenue Authority)
- Value Added Tax (VAT): 18% standard rate, with certain exemptions and zero-rated supplies
- Excise duties: varying rates on items such as fuel, alcohol, and telecommunications
Recent policy shifts have focused on broadening the tax base, digitalizing tax administration, and intensifying compliance efforts. The URA’s adoption of electronic fiscal devices and the expansion of the Digital Tax Stamps program have contributed to improved VAT compliance and a reduction in underreporting. In 2025, the government aims to further increase domestic revenue by strengthening enforcement and targeting the informal sector, which remains a significant challenge to tax collection efficiency (Ministry of Finance, Planning and Economic Development).
Tax revenue funds approximately 75% of Uganda’s annual budget for 2024/2025, supporting infrastructure, healthcare, and education. However, the challenges of tax evasion, a large informal sector, and limited administrative resources persist. Looking forward, projections indicate continued growth in tax revenues, with government targets set at UGX 28 trillion for 2025/2026, underpinned by ongoing reforms and investments in digital tax systems (Uganda Revenue Authority). These trends are expected to enhance fiscal sustainability, though success will depend on sustained compliance and economic expansion.
Sector-Specific Taxation: Agriculture, Oil & Gas, SMEs, and Digital Economy
Uganda’s tax regime is undergoing significant reforms to enhance compliance and revenue mobilization, particularly within key economic sectors such as agriculture, oil & gas, small and medium enterprises (SMEs), and the digital economy. These sector-specific approaches are aimed at broadening the tax base and aligning fiscal policy with national development priorities through 2025 and beyond.
Agriculture: Traditionally, agriculture—contributing around 24% to GDP—has benefited from various tax exemptions to support rural livelihoods and food security. Under the Income Tax Act (Cap 340), incomes from agricultural produce by individuals and partnerships are largely exempt, provided turnover does not exceed USh 150 million annually. However, Value Added Tax (VAT) is applicable to processed agricultural goods, with fertilizer and seed inputs remaining VAT-exempt. Recent policy debates focus on gradually expanding taxation in the sector to improve compliance while safeguarding smallholder farmers (Parliament of Uganda).
Oil & Gas: The emergence of Uganda’s oil sector—expected to commence commercial production in 2025—has prompted comprehensive tax and regulatory frameworks. The Uganda Revenue Authority (URA) administers sector-specific taxes including corporate income tax (30%), withholding taxes, and ring-fencing of petroleum operations. The Petroleum (Exploration, Development and Production) Act 2013 and Production Sharing Agreements (PSAs) govern fiscal terms, with a focus on maximizing state revenues while ensuring investment attractiveness. Uganda’s participation in the Extractive Industries Transparency Initiative (EITI) seeks to bolster accountability in oil revenue management (EITI).
SMEs: SMEs represent over 90% of Uganda’s private sector and employ the majority of the workforce. The URA has introduced presumptive tax regimes for small businesses with turnover below USh 150 million, aimed at simplifying compliance and promoting formalization. For higher turnover SMEs, standard corporate income tax and VAT obligations apply. Ongoing digitalization of tax systems—such as e-invoicing and mobile tax payment options—aims to reduce compliance burdens and boost registration rates (Uganda Revenue Authority).
Digital Economy: The rapid growth of Uganda’s digital sector has prompted new tax measures. Since July 2023, a 5% digital services tax applies to non-resident providers of digital services, alongside VAT on electronic services (Uganda Revenue Authority). The government is investing in digital tax infrastructure to better capture revenues from e-commerce, ride-hailing, and fintech services, seeking to address base erosion and profit shifting.
As Uganda enters 2025, tax reforms across these sectors are projected to continue, balancing revenue needs with sectoral competitiveness, with ongoing stakeholder consultations and phased implementations.
Cross-Border Taxation: International Treaties and Transfer Pricing Rules
Uganda’s cross-border taxation framework has undergone significant evolution in recent years, aligning with global standards to address challenges of tax base erosion and profit shifting. The country is a signatory to several bilateral double taxation agreements (DTAs) with nations including the United Kingdom, South Africa, India, Denmark, and others, designed to prevent double taxation and foster international investment. As of 2025, Uganda’s DTAs specify taxing rights over various types of income and provide mechanisms for resolving disputes and exchanging tax information between tax authorities, thereby enhancing transparency and compliance Uganda Revenue Authority.
On the domestic front, Uganda’s Income Tax Act (Cap 340, as amended) contains comprehensive transfer pricing (TP) regulations, first introduced in 2011 and updated in 2020. These rules mandate that transactions between related parties—where one or both are non-residents—must be conducted on an arm’s length basis. Taxpayers engaged in cross-border related party transactions are required to prepare and maintain contemporaneous TP documentation, demonstrating compliance and justifying pricing policies. The Uganda Revenue Authority (URA) has intensified audits in this domain, with a particular focus on sectors such as telecommunications, extractives, and financial services Uganda Revenue Authority.
In 2025, Uganda is also actively engaging with the Organisation for Economic Co-operation and Development (OECD) and other African tax bodies to strengthen its anti-avoidance measures and align with international best practices, including the OECD/G20 Base Erosion and Profit Shifting (BEPS) project. The URA participates in the African Tax Administration Forum (ATAF) initiative on transfer pricing and exchange of information, which aims to build capacity and enhance enforcement capabilities Uganda Revenue Authority.
Key compliance developments include the introduction of mandatory country-by-country (CbC) reporting for multinational enterprises (MNEs) with global revenues exceeding a certain threshold, as stipulated by the Income Tax (Amendment) Act, 2023. Non-compliance with transfer pricing regulations attracts significant penalties and potential adjustments to taxable income. As of the latest available statistics, TP audits and adjustments in Uganda have resulted in additional tax assessments amounting to UGX 160 billion for the 2022/23 fiscal year, a figure expected to rise as enforcement intensifies Uganda Revenue Authority.
Looking ahead, Uganda is anticipated to further tighten its TP rules and expand its treaty network, in line with international reforms and domestic revenue mobilization efforts. Businesses operating or investing in Uganda should closely monitor evolving requirements, ensure robust documentation, and proactively manage cross-border tax risks.
Future Outlook: Projected Reforms and Strategic Opportunities (2025–2029)
Uganda’s tax landscape is poised for significant transformation over 2025–2029, with projected reforms and strategic opportunities centered on broadening the tax base, digitalization, and regional harmonization. The government’s medium-term revenue strategy (MTRS) aims to raise domestic revenue to at least 18% of GDP by 2026, up from below 14% in 2023, to fund infrastructure, healthcare, and education priorities (Ministry of Finance, Planning and Economic Development). This drive is expected to shape tax policy and administration in the coming years.
Key anticipated reforms include the continued implementation of the Tax Procedures Code (Amendment) and targeted changes to the Income Tax Act and Value Added Tax Act, with an emphasis on reducing exemptions and combating tax avoidance. The Uganda Revenue Authority (URA) has signaled a move toward stricter compliance measures, leveraging new technology and data analytics to increase efficiency and reduce leakages (Uganda Revenue Authority).
- Digital Transformation: Digitalization is a cornerstone of Uganda’s tax modernization agenda. The roll-out of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) is expected to become universal for VAT-registered businesses by 2025, enabling real-time transaction monitoring. URA is also expanding e-filing and mobile payment services, making compliance easier and reducing informal sector tax evasion.
- Regional Integration: Uganda is aligning select tax policies with the East African Community (EAC) framework, particularly regarding customs and excise duties. Harmonization efforts are likely to intensify, facilitating cross-border trade and investment while reducing disputes (East African Community).
- Sector-Specific Initiatives: The government is focusing on high-growth sectors such as digital services, oil and gas, and agriculture. New guidelines on taxing digital platforms and extractive industries are expected, addressing base erosion and profit shifting.
Compliance rates are projected to improve as URA’s enforcement capacity expands and taxpayer education intensifies. Penalties for non-compliance and late payments will become more stringent, with increased audits and risk profiling. Still, tax morale remains a challenge, requiring ongoing engagement and simplification of processes.
Looking ahead, Uganda’s tax reforms are designed to balance revenue mobilization with economic competitiveness. The outlook to 2029 suggests a more robust, technology-driven tax system, greater alignment with regional standards, and a focus on fairer distribution of the tax burden—all aimed at fostering sustainable national development (Ministry of Finance, Planning and Economic Development).
Official Resources: Where to Find the Latest Tax Laws and Guidance (ura.go.ug)
Uganda’s tax system is primarily administered by the Uganda Revenue Authority (URA), which serves as the central resource for up-to-date tax laws, compliance requirements, and procedural guidelines. As of 2025, the URA continues to enhance the accessibility and clarity of tax-related information through its official portal, aiming to facilitate compliance and improve transparency for individuals, businesses, and tax professionals.
Key statutory instruments and legislative updates—including recent amendments to the Income Tax Act, VAT Act, and Excise Duty Act—are published and regularly updated on the URA’s website. The “Laws & Guidelines” and “Legal Framework” sections consolidate the full texts of primary tax legislation, subsidiary regulations, circulars, and practice notes. For those seeking official interpretations or advance tax rulings, the URA provides channels for formal requests and publishes relevant public notices and binding rulings online.
Taxpayers can also access sector-specific guides, tax calendars, and procedural manuals governing registration, filing, payment, and audit processes. The URA’s e-Services portal enables electronic filing and payment, reflecting Uganda’s ongoing digitalization of tax administration. This is in line with the broader government strategy to widen the tax base and enhance voluntary compliance, as highlighted in recent policy statements and annual performance reports (Ministry of Finance, Planning and Economic Development).
Compliance resources are further supplemented by FAQs, webinars, and online training sessions, which are especially salient as Uganda introduces new measures—such as e-invoicing and digital tax stamps—to reduce tax evasion and improve revenue collection in the coming years. Recent statistics indicate a steady increase in registered taxpayers and tax revenue collection, with projections for continued growth as the URA improves enforcement and taxpayer education (Uganda Revenue Authority).
- Legislation and updates: Full texts of Acts, amendments, and statutory instruments are available under “Laws & Guidelines.”
- Compliance and procedures: Detailed guides, FAQs, and e-services for registration, returns, and payments.
- Official announcements: Updates on new tax measures, policy changes, and compliance deadlines.
- Taxpayer support: Live chat, helpdesk, and training events for businesses and individuals.
For the most current and authoritative tax information in Uganda throughout 2025 and beyond, the official Uganda Revenue Authority website remains the primary resource, supported by policy updates from the Ministry of Finance, Planning and Economic Development.
