On 1 July 2025, Uganda ushered in a comprehensive suite of amendments to its tax legislation, following the enactment of seven key bills tabled during the 2025/2026 budget cycle. The reforms covered the Income Tax (Amendment) Act, Value Added Tax (Amendment) Act, Excise Duty (Amendment) Act, Stamp Duty (Amendment) Act, Tax Procedure Code (Amendment) Act, External Trade (Amendment) Act, and Hides & Skins (Export Duty) (Amendment) Act.
Below is a highlight of the tax reforms:
The Income Tax (Amendment) Act, 2025
Exemption from income tax for Bujagali hydro power project.
The Act exempts the income of the Bujagali Hydropower Project from income tax until 30th June 2026.
Exemption from income tax for businesses established by citizens after 1st July 2025
The amendment provides for a three-year income tax exemption for businesses established by a citizen after 1 July 2025, provided the business is registered with capital not exceeding Uganda shillings five hundred million, the citizen or their associate has not previously benefited from the exemption and the citizen files tax returns in the format prescribed by the Commissioner General (the “Commissioner”).
The Income Tax Act defines a citizen to mean a natural person who is a citizen of a Partner State of East African Community or a company or a body of persons incorporated under the laws of a Partner State of the East African Community in which at least fifty-one percent of the shares are held by a person who is a citizen of a Partner State of East African Community.
Proposal for the expansion of the meaning of reorganization for purposes of Roll over relief under Section 76
The amendment act changes the definition of a reorganisation from a transaction in which a company transfers its assets to another company controlled by the transferor or its shareholders, followed by the distribution of the transferee’s stock, to now refer to a transaction in which any person transfers assets to a non-individual person controlled by the transferor or their shareholders, followed by the distribution of the transferee’s stock.
This change expands eligibility for roll-over relief to include individuals, partnerships, trusts, retirement funds, government bodies, and listed institutions, provided they transfer assets to non-individual persons that are controlled by them or their shareholders. This would be in addition to companies which already benefit from roll-over relief.
Individual entrepreneurs or sole proprietors can now restructure their businesses into companies without triggering immediate tax consequences.
Exemption from Digital Service Tax for Non-Resident Persons Providing Services to Their Associates in Uganda
The amendment provides for the exemption of non-resident persons providing digital services to their associates in Uganda from the current 5% digital services tax. Instead, such services are now subject to a 15% withholding tax, applicable to dividends, interest, royalties, rent derived by non-resident persons from sources in Uganda and payments to non-resident persons earning income from Ugandan source service contracts.
Exemption of income earned by International Atomic Energy Agency (IAEA)
The amendment adds IAEA to the list of organisations whose income is exempt from tax under the Second Schedule 2 of the Act.
Tax Procedure Code (Amendment) Act, 2025
Replacement of the Tax Identification Number system
The amendment act replaces the current tax identification numbers issued upon registration with the Uganda Revenue Authority with the following:
- a national identification number issued by the National Information Registration Authority for individuals;
- a registration number issued by the Uganda Registration Services Bureau in the case of non-individuals; and
- a tax identification number issued by a foreign tax authority with whom Uganda has an information sharing treaty.
The amendment act provides that persons shall state the above-mentioned numbers on any documents used for the purposes of a tax law.
The amendment act further prohibits government bodies from issuing any form of authorization to conduct business in Uganda or registering any instrument subject to stamp duty in favor of a person who does not possess one of the proposed tax identification numbers.
The Minister of Finance, Planning and Economic Development (the “Minister of Finance”) is obligated to issue regulations prescribing the procedure and requirements for registering and issuance of registration numbers to non-individuals.
This change to the current tax identification number system shall require significant time for implementation, as taxpayers will need to update their records and the tax authority will need to adjust its systems accordingly. To accommodate this, the amended act provides that this specific amendment shall come into effect on a date to be appointed by the Minister of Finance by statutory instrument.
Waiver of interest and penalty on payment of principle tax.
The amendment act provides a waiver of all interest and penalties outstanding as of 30 June 2024, provided the principal tax is fully paid by 30 June 2026. Where a taxpayer makes a partial payment of the principal tax by that date, the interest and penalties shall be waived on a pro-rata basis. This waiver only applies to interest that accrues on the principal tax from 1st July 2024 to the date the taxpayer pays the principal tax.
Amendment of the penal tax relating to electronic receipting and electronic invoicing
The following changes are introduced in respect to penal tax associated with electronic receipting requirements:
- The amendment act replaces the penal tax applicable to a taxpayer who does not use an electronic fiscal device from a penal tax equivalent to the tax due on the goods or services or Uganda Shillings eight million (UGX 8,000,000/=), whichever is higher, to double the tax due on the goods or services.
- The amendment act replaces the penal tax applicable to a tax payer who does not issue an e- invoice or one who tampers with an electronic fiscal device from a penal tax equivalent to the tax due or Uganda shillings six million (UGX 6,000,000), whichever is higher, to double the tax due on the goods or services.
- These amendments increase the penalty for large-scale non-compliance.
Introduction of a gaming and betting centralized payments gateway system
The amendment act provides that operators of casinos, gaming or any betting activities shall only receive wagers or money staked and only make payouts through a centralized payments gateway system licenced by the Bank of Uganda. This system is to be linked to the Uganda Revenue Authority electronic notice system.
The penalty for non-compliance with the above provision is a penal tax equivalent to double the gaming or withholding tax due or Uganda Shillings One Hundred Ten Million (UGX 110,000,000/=), whichever is higher.
Compliance with requirements for tax exemptions
The amendment act provides that taxpayers granted a tax exemption under any tax law must continuously meet the conditions for eligibility. Failure to comply with these requirements will result in a liability to pay the tax due for the period of non-compliance. In addition, any penal tax arising from such failure shall be personally payable by the taxpayer who failed to maintain the exemption requirements.
The Stamp Duty Amendment Act, 2025
The amendment act removes the stamp duty on: (i) mortgages; and (ii) additional security where the principal instrument has already been stamped; replacing the previous rates of 0.5% of the total value and UGX 15,000, respectively, with a nil rate.
Furthermore, the amendment act has also replaced the UGX 15,000/- stamp duty on agreements with a nil rate.
It remains unclear how the administrative costs associated with stamping these and other instruments that attract a nil rate will be met.
The Excise Duty Amendment Act, 2025
Application for remission of duty paid on ex- factory goods
The amendment act introduces a provision for an application to the Commissioner for the remission of any excise duty paid on damaged, expired or obsolete goods. Where the Commissioner is satisfied that excise duty was paid on the damaged expired or obsolete goods, they can either set off the duty paid in reduction of any other duty from the taxpayer or, apply the duty paid to reduce any outstanding liability of the taxpayer with regards to other taxes not in dispute on the application of the taxpayer.
Changes to the excise duty for particular items
The amendment act varies the excise duty on certain excisable goods stipulated under schedule 2 of the Excise Duty Act, 2014 as follows:
| Item | Old Duty | New Duty | Change |
| Cigarettes (Soft cap)
Locally manufactured Imported |
Ushs 55,000 per 1000 sticksUshs 75,000 per 1000 sticks | Ushs 65,000 per 1,000 sticksUshs 150,000 per 1,000 sticks | Increment of Ushs 10,000 per 1,000 sticks
Increment of Ushs 75,000 per 1,000 sticks |
| Cigarettes (Hinge lid)
Locally manufactured Imported |
Ushs 80,000 per 1,000 sticks
Ushs 100,000 per 1,000 sticks |
Ushs 90,000 per 1,000 sticks
Ushs 200,000 per 1,000 sticks |
Increment of Ushs 10,000 per 1,000 sticks
Increment of Ushs 100,000 per 1,000 sticks |
| Beer whose local raw material content excluding water is at least 75% by weight of its constituent. | 30% or Ushs 650 per litre, whichever is higher | 30% or Ushs 900 per litre, whichever is higher | An increment of the minimum charge by Ushs 250. |
| Beer produced from barley grown and malted in Uganda | 30% or Ushs 950 per litre, whichever is higher | N/A | This duty has been repealed |
| Fruit juice and vegetable juice, except juice made from at least 50% of pulp from fruit and vegetables grown in Partner state | 10% or Ushs 250 per litre, whichever is higher. | 10% or Ushs 250 per litre whichever is higher. | The duty has been maintained but the percentage of pulp from fruit and vegetables grown in a Partner State required for juice to be excluded from the duty has increased by 20% |
| Fuel
Motor spirit (gasoline) |
Ushs 1550 per litre | Ushs 1650 per litre | An increment of Ushs 100 per litre. |
| Gas oil (automative, light, amber for highspeed engines) | Ushs 1230 per litre | Ushs 1380 per litre | An increment of Ushs 150 per litre. |
| Sacks and bags of polymers of ethylene and other plastics under HS codes 3923.21.00 and 3923.29.00 except vacuum packaging bags for food, juices, tea, coffee sacks, and bags for direct use in the manufacture of sanitary pads | 2.5% or Ushs 70 per tonne, whichever is higher | 2.5% or Ushs 70 per tonne, whichever is higher | The duty has been maintained but its application has been reduced from all plastic products and plastic granules to those specified. |
Please note, although an increase in excise duty of UGX 100 per litre for motor spirit (gasoline) raising it from UGX 1,550 to UGX 1,650 and UGX 150 per litre for gas oil (automotive light amber for high speed engines) raising it from UGX 1,230 to UGX 1,380 were proposed for inclusion in the Excise Duty Amendment Act of 2025, these increases were ultimately not adopted.
The Value Added Tax (Amendment) Act, 2025
Additions to the list of public international organisations
The amendment act expands the list of “public international organisations” entitled to VAT refunds for official transactions to include:
- The United Nations related agencies and specialized agencies; and
- The IAEA.
Changes to the list of VAT- exempt supplies
The amendment act makes changes to the list of VAT-exempt supplies and in particular lanterns by replacing the broader category of ‘composite lanterns’ with ‘solar lanterns’, thereby limiting the exemption to lanterns that are exclusively solar-powered.
The amendment act further provides for the inclusion of “the supply of biomass pellets” and the removal of “the supply of billets for further value addition”, from the list of VAT exempt supplies.
Changes to the list of VAT zero rated supplies.
The amendment act has included the supply of aircrafts in the list of VAT zero rated supplies.
The Hides and Skins (Export Duty) Amendment Act, 2025
The amendment act repeals the provision providing the exemption to export duty granted to the list of items in schedule 2 of the Hides and Skins (Export Duty) Act. As a result, all listed hides and skins in schedule 2 are subject to the standard export duty of US$ 0.80 per kilogram.
The amendment act further revokes the Minister’s authority to amend the list of items exempt from export duty.
The External Trade (Amendment) Amendment Act, 2025.
Introduction of an infrastructure levy and import declaration fee on goods for home use
The amendment act introduces a 1.5% infrastructure levy and a further 1% import declaration fee on the customs value of all goods imported for home use payable by the importer at the point of the goods entering the country.
The exceptions to the above levy and fee are:
- goods and products prescribed in the 5th schedule to the East African Community Customs Management Act, 2004;
- plant and machinery as prescribed under chapter 84 and 85 of the East African Community External Trade harmonized commodity description and coding system; and
- goods under a special operating framework with the government of Uganda specified in approved measures on import duty rates in the East African Community Common External Tariff.
Home use is defined to mean goods imported into a customs territory for free circulation and do not include goods for re-export or goods in transit.
Introduction of an export levy on certain cereal crops
The bill proposes an export levy of USD 10 per metric tonne on wheat bran, cotton cake, and maize bran consigned out of Uganda, payable by the consignor at the time of export.
