Introduction: What Is the Uganda Tax Amendment 2025?
The Uganda Tax Amendment 2025 is a newly proposed set of changes to the national tax framework, designed to support inclusive economic growth, particularly for local investors and SMEs. These proposals, tabled before Parliament, seek to address long-standing concerns about the imbalance in tax incentives between local and foreign businesses. One of the most notable proposals is a three-year tax holiday for Ugandan-owned businesses.
If approved, the Uganda Tax Amendment 2025 will take effect starting July 1st, 2025, ushering in transformative benefits for small and medium enterprises across the country.
Three-Year Tax Holiday for Local Investors
Among the most impactful provisions in the Uganda Tax Amendment 2025 is the three-year corporate tax exemption for local businesses. This move aims to stimulate entrepreneurship and create a more level playing field for indigenous investors.
Eligibility Criteria
To benefit from this tax incentive under the Uganda Tax Amendment 2025, businesses must meet the following conditions:
- Registered with the Uganda Registration Services Bureau (URSB)
- 100% locally owned
- Capital investment not exceeding UGX 500 million
- No prior benefit from similar government tax exemptions
- Commencement after July 1, 2025
This provision is especially focused on Ugandan SMEs, which often face challenges in their early years due to limited capital and high tax burdens.
Objectives of the Uganda Tax Amendment 2025
The primary goal of the Uganda Tax Amendment 2025 is to promote sustainable business growth and reduce the high failure rate of start-ups. Many Ugandan businesses shut down within their first few years due to financial constraints and a rigid tax system. This amendment offers relief and a fresh start.
Additional objectives include:
- Poverty reduction through job creation
- Improved household incomes
- Support for Uganda’s economic development agenda
- Encouragement of formal business registration and tax compliance
How Uganda’s Current Tax System Compares
Currently, all registered businesses in Uganda are subjected to a flat 30% corporate income tax, regardless of their size, age, or ownership structure. Exceptions are limited to large-scale foreign investors or developers operating in designated industrial parks.
Under the current regime:
- Foreign investors receive up to 10-year tax holidays for investments of USD 50 million (UGX 182.5 billion).
- EAC nationals can qualify with capital investment of USD 10 million (UGX 36.5 billion).
The Uganda Tax Amendment 2025 represents a shift toward fairness and inclusivity by extending similar benefits to local entrepreneurs.
Other Proposals Under the Uganda Tax Amendment 2025
Besides the local investor tax holiday, the Uganda Tax Amendment 2025 outlines several additional reforms aimed at streamlining tax compliance and enhancing revenue collection:
- Bujagali Energy Limited (BEL) tax exemption extended to 2032
To help lower electricity costs and support economic growth. - Replacement of TINs with National IDs and Company Numbers
Aims to reduce tax evasion and simplify the tax registration process. - Penalty and interest waiver on outstanding tax liabilities
Taxpayers who settle their principal balances by 2026 will have interest and penalties waived (as of June 30, 2024). - Centralized payment gateway for gaming and betting firms
All operators must integrate with a URA-approved platform licensed by the Bank of Uganda. - Abolition of stamp duty on key business documents
Includes MoUs, contracts, loan agreements, and mortgage deeds—effective July 1, 2025. - VAT exemptions for textile industry inputs
Covers cotton lint, dyes, artificial fiber, polyester, viscose, and related machinery parts.
These proposals reflect a broader strategy to create a business-friendly tax environment while boosting economic productivity.
How Ronalds Uganda Can Help You Prepare
At Ronalds Uganda, we are committed to guiding businesses through complex regulatory changes such as the Uganda Tax Amendment 2025. Whether you are a start-up, SME, or established enterprise, we offer expert services to help you stay compliant and take advantage of available incentives.
Our Services Include:
- Tax Advisory & Compliance
- Audit & Assurance
- Human Resource & Payroll Management
- Accounting Support
- IT & Systems Integration
- Business Registration and Restructuring
Conclusion: Positioning for the Uganda Tax Amendment 2025
The Uganda Tax Amendment 2025 offers a unique opportunity for local investors to thrive under a more inclusive and supportive tax system. As the legislative process unfolds, it’s crucial for businesses to understand the changes, assess their eligibility, and prepare accordingly.
Contact Ronalds Uganda today to ensure your business is well-positioned to benefit from the proposed reforms.
Godfrey Mpaulo
Audit | Assurance Partner – Ronalds Uganda
