Every financial year, the Ugandan government introduces new tax bills aimed at improving revenue collection and economic development. Some proposals pass, some are deferred, while others are rejected altogether. The 2025 Tax Bill Uganda, however, stands out — especially with its bold proposition: a 3-year tax holiday for local investors.
As a business advisor, this development is both exciting and long overdue. For years, indigenous Ugandan entrepreneurs have voiced concerns that tax incentives heavily favored foreign investors. The 2025 proposal is a potential turning point — offering a fairer, more inclusive tax regime that empowers local businesses.
🎯 Who Qualifies for the 3-Year Tax Holiday?
To ensure clarity and eliminate ambiguity, the 2025 Tax Bill Uganda outlines specific eligibility criteria for the proposed 3-year tax break:
- Business Registration & Local Ownership
The business must be fully registered with the Uganda Registration Services Bureau (URSB) and owned by Ugandan nationals. - Capital Investment of UGX 500M or Less
This incentive is clearly aimed at SMEs and startup businesses — supporting them during their crucial early years to promote sustainable growth. - No Record of Past Tax Exemptions
The applicant business must not have benefited from similar tax exemptions before. This ensures fairness and avoids duplication. - Start Date
If passed, the law will take effect on July 1st, 2025, marking the beginning of a new chapter for local entrepreneurship in Uganda.
🌱 Why This Proposal Matters
The intention behind the 2025 Tax Bill Uganda is simple yet powerful: to help Ugandan businesses start, grow, and thrive.
Too often, startups and SMEs collapse within their first few years due to heavy tax burdens and harsh operating environments. This proposal gives them breathing space — a runway to stability and success.
Additionally, this move aligns with broader national development goals, such as:
- Boosting household incomes
- Promoting entrepreneurship
- Fighting poverty through local economic empowerment
🧾 Current Tax Structure & Inequality
Currently, businesses in Uganda face a uniform 30% corporate tax, regardless of their size or how long they’ve operated. Meanwhile:
- Foreign developers with USD 50M+ in investment receive a 10-year tax holiday
- EAC citizens with UGX 36.5B+ capital get similar benefits
This system has long been criticized for favoring big foreign players while leaving local SMEs to fend for themselves. The 2025 Tax Bill Uganda aims to level the playing field.
🆕 Other Key Proposals in the 2025 Tax Bill Uganda
The bill doesn’t stop with the SME tax holiday. Here are other notable reforms:
- Bujagali Energy Limited (BEL) Tax Exemption until 2032
Designed to reduce electricity costs for consumers. - Replacing TINs with NINs/Company Registration Numbers
Aims to streamline compliance, eliminate duplication, and reduce tax evasion. - Penalty & Interest Waivers
Outstanding tax interest and penalties as of June 30, 2024, may be waived if the principal amount is paid by 2026. - Gaming & Betting Regulations
Introduces a centralized payment gateway integrated with the URA and licensed by Bank of Uganda. - Stamp Duty Removal
From July 1st, 2025, agreements like MoUs, mortgage deeds, and agriculture loan agreements will be exempt from stamp duty. - VAT Exemption for Textile Inputs
Cotton lint, polyester, viscose, dyes, and textile machinery parts to be exempt — aimed at reviving Uganda’s textile industry.
💼 How Ronalds Uganda Supports You
At Ronalds Uganda, we are committed to helping both local and foreign investors understand, comply with, and benefit from these tax reforms. Our professional services include:
- Audit & Assurance
- Tax Advisory
- Business Registration
- HR & Payroll Management
- Accounting Support
- IT & Digital Compliance Solutions
We guide you through every regulatory shift, ensuring your business stays compliant and strategically positioned.
🖊️ Final Thoughts
The 2025 Tax Bill Uganda is more than just legislation — it’s a bold statement that Uganda believes in its own entrepreneurs. If passed, this tax holiday for local investors could be a major catalyst for economic transformation.
Let’s hope Parliament passes these progressive reforms into law. Our local businesses deserve a fair shot at success.
Written by:
Godfrey Mpaulo
Audit | Assurance Partner, Ronalds Uganda
