SETTING UP BUSINESS IN UGANDA 2026 by Auren

SETTING UP BUSINESS IN

UGANDA

General Aspects

The Republic of Uganda, located in East Africa, is a member of the East African Community (EAC), which includes Burundi, Kenya, Rwanda, South Sudan, and Tanzania. According to the 2024 National Population Census in Uganda, Uganda’s population is currently 45,905,417 people.

The country’s monetary unit is the Ugandan Shillings(UGX) and English serves as the official language among the country’s diverse linguistic landscape of over forty languages.

Uganda’s economy is market-based and rich in natural resources, with agriculture playing a pivotal role, contributing 37% to the GDP and 19% to export revenues,

Legal Forms of Business Entities

Legal form Feature

particularly through commodities like coffee. Uganda has entered a new phase of economic development as it advances toward commercial oil production, following the completion of key oil infrastructure, including the Central Processing Facilities, well pads, drilling activities, and the East African Crude Oil Pipeline. The sector is now progressing through the pre-commissioning and commissioning stages, marking a significant milestone in the country’s energy development.

The country has over forty languages with English recognized as the official and business language.

Sole Proprietorships This is a business controlled and operated by one person, who engages in the business on their own account with unlimited liability.

Remarks

• Sole proprietorship is suitable for businesses that require less capital and involve less risk on capital employed and work required. Profits from a sole entities are taxed as part of individual income except where the income lies under property/rental income.

Cooperatives A cooperative, is a business entity that is collectively owned and democratically controlled by its members, who are also its customers, employees, or suppliers.

• Unlike traditional businesses, cooperatives operate based on the principle of mutual benefit, ensuring that all members have an equal voice in decision-making and share in the enterprise’s success. In Uganda, registering a cooperative society follows a structured process governed by the Cooperative Societies Act, Cap 112 under the Ministry of Trade, Industry, and Cooperatives.

• These Cooperatives have grown so much in Uganda over the years and some have transformed into larger financial institutions and enhanced financial inclusion.

Partnerships A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates. Ownership of a partnership in Uganda may range from a minimum of 2 to a maximum of 20 members except for a professional partnership which may be constituted by a maximum of 50 members.

• A partnership is not a legal entity of its own and has no existence apart from its partners.

• Partnership property is held by the partners exclusively for purposes of the business.

Partnerships in Uganda are categorized as either General or Limited Liability partnerships.

General Partnerships In a general partnership, every partner is an agent of the firm and binds the other partners. Therefore, all partners are also jointly and severally liable for the partnership debts.

• A general partnership is also dissolved by the death or bankruptcy or retirement of one of the partners unless the partnership agreement prescribes otherwise. It can be formed and begin operations without the need for formal registration or documentation, making it a simple and convenient business structure.

Limited liability partnerships (“LLPs”).

A limited partnership consists of both general and limited partners, each with distinct roles and liability. While both share in the profits, general partners manage operations and bear full liability, whereas limited partners contribute capital with liability limited to their investment.

• A LLP is an attractive option for investors who want to contribute financially and enjoy benefits without taking on management responsibilities or personal liability beyond their investment.

• LLPs are required to register with the Uganda Registration services Bureau and must have a formal partnership agreement.

Corporations.

A corporation is a is a legal business entity that is separate from its owners (shareholders) and has its own rights and obligations. It is split into Private Limited Liability Companies and Public Limited Companies. They are registered under the Companies Act, 2012 and regulated by the Uganda Registration Services Bureau (URSB) and in case of Initial Public Offerings, they are regulated by the Capital Markets Authority.

Legal form Feature Remarks

Private Limited Companies A private company is one which; Restricts the right to transfer its shares, Limits the number of its members to fifty, not including persons who are in employment of the company and prohibits any invitation to the public to subscribe for any shares or debentures held.

Public limited companies Public limited companies can offer their shares to the general public but also have limited liability. The shares can be acquired during an initial public offering.

Company Limited by Guarantee A company limited by guarantee has no shares or shareholders. Instead, it is owned by guarantors who commit to contributing a fixed amount toward company debts, making it a common structure for non-profits and charities.

• Where two or more members jointly hold one or more shares in such a company, they are treated as one member. Shareholders are also liable for the debt of the company to the limit of their investment.

• All public limited companies in Uganda have their shares listed on the Uganda Securities Exchange (USE). Uganda currently has about 18 listed entities on the USE.

• A company limited by guarantee requires at least one director and one guarantor, though a single individual can fulfill both roles.

Foreign Companies/ Branches These are companies which are incorporated outside Uganda and as such, they are registered as foreign companies/ branches and therefore they do not need to be go through the incorporation process.

To register a foreign company, the following documents are required to be filed with URSB;

• The Memorandum and Articles of Association of the company from Country of Origin.

• Registration forms i.e.

• Form 24 –Director and secretary Details

• Form 26-The Address of the company

• Form25- List of names and addresses of persons resident in Uganda authorized to accept service on behalf of the company.

When all necessary documentation is in order and all fees paid, URSB will issue a Certificate of Compliance. This certificate confirms that your foreign company’s branch is now registered and legally authorized to do business in Uganda.

Organizational Questions

Topic Feature Remarks

Company Register The process of incorporating a local company in Uganda is governed by the Companies Act 2012. The documentation submitted to the Companies Registry covers details like shareholders, directors and share capital. It is a mandatory requirement for companies both local and foreign to be registered in register of companies after incorporation. However, it is not mandatory for businesses like sole proprietorships and partnerships to be registered.

Trade Register Notification A necessary search concerning any registered company can be made on the Uganda Registration Services Bureau website at www.ursb.go.ug

• The Registrar General is charged with the responsibility of managing the Register of Companies in Uganda under the Ministry of Justice and Constitutional Affairs.

• The Uganda Registration Services Bureau (URSB) is mandated to register all business entities and legal documents in Uganda which are required by law to be registered.

Bank Account To open up a bank account, a company needs a certificate of incorporation, particulars of directors and secretaries, annual returns, articles and memorandum of association, certified copy of directors’ resolution to open up a bank account, current trading license, tax identification number and a company letter head.

An individual needs a passport size photo, if Ugandan, a valid National ID (front & back), if nonUgandan, a valid passport and visa, if a refugee, a refugee ID issued from the Ministry of Internal Affairs.

• It is mandatory under the Anti-Money Laundering Act 2013 to disclose sources of funding for both companies and individuals doing business in Uganda.

Trade Licence Every person is required to obtain a trade license before commencing business in Uganda. The application for the trade license is submitted to the local authority where business is to be conducted together with the registration documents of the entity, the investment license (for a foreign investor), the certificate of tax registration, the tenancy agreement (where applicable) for the premises where the business will be operated from and a tax clearance certificate issued by Uganda Revenue Authority confirming that the applicant is tax compliant.

Visa and Residence permit

Any person who wishes to travel to Uganda ought to use the e-Visa program to apply, pay a fee online and receive their electronic visa online before traveling. The e-Visa is an official document permitting entry into and travel within Uganda. Applicants receive their visas via email, after filling out the application form with the necessary information, and once the online credit card payment is completed. Nationals from the East African Community need a national identification card from their countries of origin since its part of the East African Community Common Market Protocol for Movement of Labor 2013.

Tax Registration Every Individual and Non-Individual engaged in Business and or employment in Uganda is required by law to have a Tax Identification Number (TIN). The TIN can be acquired through the URA Web portal or by Visiting a URA Designated Office.

Insolvency and Receivership

Investment License

The Insolvency Act of 2011 and the Companies Act of 2012 provide guidance on the procedures undertaken when winding up a company. In Uganda, Insolvency is demonstrated by inability of an entity to pay creditors.

• A trade license fee is payable depending on the nature of business to be undertaken and it’s renewed yearly.

• The application process is governed by the Directorate of Citizenship and Immigration Control Department under the Ministry of Internal affairs in Uganda.

Visa and Residence

Every foreign investor is required to obtain an investment license from the Uganda Investment Authority (UIA) before commencing business in Uganda. A foreign investor is a person who is not a citizen of Uganda, a company in which a person who is not a citizen of Uganda holds more than 50% of the shares, or a partnership in which the majority of the partners are non-citizens of Uganda. The application should contain the name and address of the applicant, proposed business activity, projected fixed capital investment costs over a period of 3 years and the number of jobs expected to be created by the project and it’s addressed to the Executive Director of the Uganda Investment Authority.

• Visit the URA Web portal

• Under the E-services, click register for Taxes and select the registration type applicable.

• Complete and Submit the application.

• The office of the official receiver is created by Section 198 of the insolvency Act, 2011. The Registrar General was appointed by the Minister of Justice and Constitutional Affairs as the Official Receiver and mainly deals with issues of individual and corporate insolvencies.

• No fees are payable on application and the license will usually be issued within 3 (three) working days provided all the supporting documentation is in order.

• The application process is governed by the Directorate of Citizenship and Immigration Control Department under the Ministry of Internal affairs in Uganda.

permit

Employment

Topic Feature

Work Permit All foreign nationals intending to work in Uganda must ensure that they are in possession of the relevant work permit. The validity of these permits range from six months to 36 months renewable when due. All work permits are approved and issued by the Directorate of Citizenship and Immigration Control under the Ministry of Internal Affairs.

Labor Law Uganda has documented labor laws which outline the conditions of employment including; contract of service, termination of contract, termination notices, and protection of wages, hours of work, rest and holidays, employment of women, employment of children and care of employees.

The key labor laws in Uganda include; the Workers Compensation Act 2000, the Minimum Wages Act 2000, the Employment Act 2006, the Labor Union Arbitration and Settlement Act 2006 and the Occupational Safety Act 2006.

Social System Uganda’s social system provides for benefits limited to; Age benefit, Withdrawal benefit, Invalidity benefit.

Emigration grant and Survivor’s benefit. These benefits are available to employees of the private sector who contribute to the fund. The total contribution to the fund is 15% of an individuals’ monthly basic pay. The employer is required to contribute 10% while 5% is deducted from the employee’s pay. However, the employer is not restricted from contributing the entire 15%.

Remarks

• East Africa Community (EAC) nationals who obtain work of more than 90 days should apply for work permit within 15 days from date of concluding contract of employment. Special pass should be sought for employment of not more than 90 days.

• Special pass will be issued to EAC nationals pending issuance of work permits.

• The employment laws in Uganda provide that the maximum normal working time for an employee below the threshold is 45 hours per week.

• The statutory limitation of 45 hours per week means that the employee may not work more than 45 hours per week normal time.

• Public servants in Uganda don’t contribute to the security fund and are therefore only entitled to Age and Survivor benefits at the account of the Government of Uganda.

Legal Reforms

Topic Feature

Data Protection and Privacy Regulations, March 2021

Uganda National Climate Change Act 2021

The President assented to the Data Protection and Privacy Act, 2019, on 28th February 2019. The commencement date is 1st March, 2019. The Act gives effect to Article 27(2) of the Constitution which provides for the protection of citizens’ rights to privacy. The Article provides that “No person shall be subjected to interference with the privacy of that person’s home, correspondence, communication or other property.”

The Act applies to any person, institution or public body collecting, processing, holding or using personal data within Uganda; and outside Uganda for those who collect, process, hold, or use personal data relating to Ugandan citizens.

This Act was enacted to provide a legal framework for climate change response, adaptation, and mitigation in Uganda.

The Uganda National Climate Change Act, 2021 commenced and became operational on August 14, 2021, when it was assented to by the President.

Part VII of the Act states the Duties of private entities and individuals in Climate change initiatives. Therefore, this law is Applicable to both private individuals and companies/corporations.

Remarks

• The objective of the Act is to protect the privacy of individuals by regulating the collection and processing of personal information in Uganda and outside Uganda if the information relates to Ugandan citizens; The Act gives individuals whose personal information has been requested, collected, collated, processed or stored powers to exercise control over their personal data including consent to the collection and processing, or to request for the correction and deletion of personal data.

• The Act establishes obligations for government institutions, private entities, and individuals to integrate climate change considerations into their activities. It also provides for carbon markets, climate finance mechanisms, and the enforcement of climate-related policies. The Act aligns Uganda’s climate efforts with international agreements like the Paris Agreement.

Financial Intelligence Authority (FIA) and Anti-Money Laundering (Amended) Act, 2023 (AMLA)

The Financial Intelligence Authority (FIA) established by the Anti-Money Laundering Act, 2013(AMLA) is Uganda’s National center for the receipt of financial data, analysis and dissemination of financial intelligence to competent authorities.

Every accountable person is required by Regulation 45(1) of the AML Regulations, 2023 to submit to the FIA a compliance report setting out the level of compliance with the Act and Regulations and the Internal AML and Combating Terrorist Financing Policy of the accountable person at the end of each calendar year. Regulation 6, of AML Regulations,2023 states that “a(1) Every accountable person shall appoint or designate a money laundering control officer”.

Requirements

• Annual Compliance Report in word format which should be emailed to compliance@fia.go.ug. Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) attachments include;

• Copy of the AML/CTF policy and procedures;

• Copies of AML risk assessment of customers, products, methods of delivery and geographical location of customers;

• Copy of the independent audit report of the compliance program (2019) Suspicious transaction reports.

Environmental, Social and Governance (ESG) regulations

Currently, Uganda is still in it’s early stages of adoption of the ESG framework and regulations. The corporate response to ESG is still developing. Many domestic businesses do not yet view ESG as an immediate concern, leading to a slower adoption rate of ESG principles.

• There are various laws which have been put in place to address the parameters of ESG. Notably the National Environment Act, 2019, and the National Climate Change Act, 2021 have established frameworks for environmental protection and climate change mitigation, reflecting the country’s commitment to sustainable development.

The National Social Security Fund (Amendment) Act, 2021

The National Social Security Fund Act, Cap. 222 was amended to;

• To establish a stakeholder board; to provide for mandatory contributions by all workers, regardless of the size of the enterprise or number of employees;

• To provide for voluntary contributions to the fund; to provide for midterm access to member’s contributions;

• To provide for a five term of office for the Managing Director and Deputy Managing Director;

• The NSSF Bill, which was first passed by the 10th Parliament on 17th February 2021, seeks to, among others, allow mid-term access of up to 20 percent to members who have reached the age of 45 years and above and who has made contributions to the fund under Section 7 for at least ten years.

Tax Act Amendments

Continued on page 9...

The Income Tax (Amendment) Act, 2025

• Exemption from income tax on:

- Income derived from a business established by a citizen after 1st July 2025, for a period of three years, provided they met the conditions.

- Income derived from Bujagali hydro power project up to 30th June 2026.

• Expansion of the definition of “re-organization.

The Value Added Tax (Amendment) Act, 2025

• Amendment of Schedule 2 to the VAT Act:

- To include, United Nations-related Agencies and specialized Agencies in the list of Public International Organizations;

- To substitute for the words “International Atomic Agency (IAA) with the words International Atomic Energy Agency (IAEA).

• Amendment of Schedule 3 to the VAT Act to repeal exemption on supply of billets for further value addition in Uganda.

• Amendment of Schedule 4 to the VAT Act to zero-rate the supply of aircraft.

• Amendment of Schedule 3 to the VAT Act to exempt the following supplies from VAT:

- Supply of deep cycle batteries, solar lanterns, and raw materials for the manufacture of deep cycle batteries and solar lanterns

EXCISE DUTY (AMENDMENT) ACT,

2025

• Remission of duty paid on damaged, expired, or obsolete goods.

• A person may apply to the Commissioner, attaching the necessary documentary proof, for remission of any excise duty paid on damaged , expired or obsolete goods. Where the Commissioner is satisfied that excise duty was paid on damaged, expired or obsolete goods, the Commissioner shall;

• Exclusion of related-party transactions from the 5% digital service tax.

• Expansion of the list of listed Institutions to include: International Atomic Energy Agency (IAEA).

• The term “composite lanterns” in the current law will be replaced with the term “solar lanterns”

• The supply of wet processing operations and garmenting, cotton lint, artificial fibers for blending, polyester staple fiber, viscose rayon fiber, yarn, other than cotton yarn, textile dyes and chemicals, garment accessories, textile machinery spare parts, industrial consumables for textile production, textile manufacturing machinery and equipment.

• To exempt the supply of biomass pellets.

• Apply the excise duty paid in reduction of any other duty due from the person liable to pay excise duty; oral the written option of the person liable to pay excise duty, apply the excise duty paid in reduction of any outstanding liability of the person with regard to other taxes not in dispute.

Tax Act Amendments

Continued from page 8

Revision of the rates of excise duty of certain excisable goods and services under Schedule 2 to the Excise Duty Act

Excisable good or service

Soft cap

i) locally manufactured

ii) Imported

Hinge lid

i) locally manufactured

ii) imported

Excise duty rate

Ushs. 65,000 per 1000 sticks

Ushs. 150,000 per 1000 sticks

Ushs. 90,000 per 1000 sticks

Ushs. 200,000 per 1000 sticks

Beer whose local raw material content, excluding water, is at least 75% by weight of its constituent. 30% or Ushs. 900 per litre, whichever is higher

Amendment of Item 2 to repeal paragraph (c) which provided for excise duty on beer produced from barley grown and malted in Uganda.

Fruit juice and vegetable juice, except juice made from at least 50% of pulp from fruit and vegetables locally grown in Partner State. 10% or Ushs 250 per litre, whichever is higher

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 and coffee sacks, and bags for direct use in the manufacture of sanitary pads

STAMP DUTY (AMENDMENT) ACT, 2025

To provide for Nil stamp duty on the following instruments:

• Agreement or memorandum of agreement

• Mortgage deed

• Mortgage of a crop

2.5% or USD 70 per tonne, whichever is higher

Tax Act Amendments

Continued from page 9

TAX PROCEDURES CODE (AMENDMENT) ACT, 2025

For tax purposes, the following shall be used as tax Identification numbers:

• A National Identification Number (NIN), issued by the National Identification Registration Authority in the case of an individual.

• A Registration Number issued by the Uganda Registration Services Bureau (URSB)in the case of a person who is a non-individual.

• A Tax Identification Number issued by a foreign tax authority with whom Uganda has a tax treaty or agreement for the exchange of information shall be used for tax purposes in Uganda.

A Local authority, government institution or regulatory body shall require a NIN (in the case of an individual), registration number (in case of nonindividual) or TIN issued by a foreign tax authority with whom Uganda has a tax treaty or agreement for the exchange of information:

• Before issuance of a license or authorization to conduct business in Uganda; and Before registration of an instrument required to pay stamp duty.

• Use of the Gaming and betting centralized payments gateway system

• An operator of a casino, gaming, and betting activity shall only receive a wager or money staked and only make payouts through the gaming and betting centralized payments gateway system licensed by the Bank of Uganda.

• The gaming and betting centralized payments gateway system shall be linked to the Uganda Revenue Authority electronic notice system.

Use of the Gaming and betting centralized payments gateway system

• The gaming and betting centralized payments gateway system shall be linked to the Uganda Revenue Authority electronic notice system.

Tax Exemption Compliance Requirements

• A taxpayer exempted from tax under a tax law shall at all times maintain the requirements required for the taxpayer to be granted an exemption.

• A taxpayer who fails to maintain the requirements shall be liable to pay the tax due personally for the period for which the taxpayer fails to maintain the requirements required to be granted an exemption under the tax law

Waiver of interest and penalty outstanding as at 30th June 2024 where the outstanding principal tax is paid by 30th June 2026

• Where the taxpayer pays part of the principal tax outstanding as at 30th June, 2024, by 30th June 2026, the payment of interest and penalty shall be waived on a pro-rata basis.

Revision of penal tax relating to EFRIS

• To provide for a penalty of double the tax due on the goods or services

Penal tax relating to failure to use the gaming and betting centralized payments gateway system

• An operator of a casino, gaming or betting activity who does not use or is not integrated with the gaming and betting centralized payments gateway system is liable to pay a penal tax equivalent to double the gaming or withholding tax due or five thousand five hundred currency points, whichever is higher.

Voluntary Disclosure Program Section 66(1a) of the Tax Procedures Code Act (TPCA) provides for preferential treatment for taxpayers who make a voluntary disclosure of non-compliance with tax laws. Voluntary disclosure is a process where the tax payer discloses information related to tax liabilities, or omissions his or her tax declarations to Uganda Revenue Authority (URA)without being prompted by any action or threat of action by URA. Guide to Applying for a Voluntary Disclosure Certificate through the URA Portal:

1.AccesstheURAPortalat(https://www.ura.go.ug).

2.DownloadandCompletetheVDForm:

3.RemitthePayment:

4.AwaitConfirmatio

Digital Service Tax (DST)

For a Voluntary Disclosure (VD) to be valid, certain criteria must be met:

1. Full Disclosure: The taxpayer must provide comprehensive details of their non-compliance, including specific taxes involved, time periods, and the nature of the discrepancies.

2. Accurate Disclosure: Information must be truthful and complete. Halftruths or omissions will invalidate the disclosure.

3. Timeliness: Proactive engagement is key.

Uganda Revenue Authority on 20th October 2023, published a public notice implementing the 5% digital services tax (DST) that was introduced by the Income Tax Amendment Act of 2023 effective 1July 2023.

This clarifies that non-residents earning income from digital services provided to customers in Uganda must register through the Uganda Revenue Authority(URA)website.

1. Non-residents who provide digital services to Ugandan customers, are obligated to register for Income Tax through the URA web portal.

2. Quarterly returns must be submitted within 15days following the end of each quarter. These returns should declare the amount of revenue obtained from Ugandan sources.

Taxation

Taxes are classified into Direct and Indirect Taxes. Direct Taxes are levied based on the taxpayer’s residency status and sources of income, such as business, employment, or property. The final burden of these taxes fall directly on the individual or business entity.

In Uganda, all taxes are imposed under the authority of Acts of Parliament and are administered by the Uganda Revenue Authority (URA). Examples of Direct Taxes include Corporation Tax, Individual Income Tax (such as Pay As You Earn), Capital Gains Tax, and Rental Tax.

Tax Feature

Corporation Tax

URA has implemented the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS) system, which facilitates e-invoicing and e-receipting. This system allows taxpayers to issue, receive, and declare invoices or receipts digitally using URA’s authentication platform. As of July 1, 2020, it is mandatory for all VAT-registered taxpayers to use EFRIS. Taxpayers must register for the system through the URA web portal to issue e-invoices and receipts.

A standard 30% income tax rate is imposed on corporations. This applies to both resident and non-resident corporations, with the exception of resident companies whose turnover does not exceed UGX 150 million, to whom presumptive tax applies. Presumptive taxation involves the use of indirect means to ascertain tax liability, which differ from the usual rules based on the taxpayer’s accounts.

Remarks

The income from all businesses in Uganda is subject to a corporation tax.

Sole proprietorships are however subject to Individual income tax while partnership, including a firm carrying on a trade or profession are charged corporation tax.

A non-resident company is only subject to Uganda income tax on income derived from sources in Uganda.

Individual Income Tax

a) Resident Individuals

Monthly Chargeable Income

Not exceeding Ushs 235,000

Exceeding UGX 235,000 not exceeding UGX 335,000

Exceeding UGX 335,000 but not exceeding UGX 410,000

Exceeding UGX 410,000

b) Non-resident individuals

Monthly Chargeable Income

Not exceeding UGX 335,000

Exceeding UGX. 335,000 but not exceeding UGX 410,000

Exceeding UGX.410,000

New Tax Reforms Feature

Pay As You Earn (PAYE) Previously, the monthly PAYE return only provided for a fixed rate of 30% (irrespective of the amount paid to the employee) for persons who earned taxable employment income from more than one employer (Secondary employment).

Rate of tax

NIL

10% of the amount by which chargeable income exceeds UGX. 235,000

UGX 10,000 plus 20% of the Amount by which chargeable income exceeds UGX 335,000.

UGX 25,000 plus 30% of the amount by which chargeable income exceeds UGX 410,000 and where the chargeable income of an individual exceeds UGX 10,000,000 an additional 10% charged on the amount by which chargeable income exceeds UGX 10,000,000.

Rate of tax

10%

UGX 33,500 plus 20% of the Amount by which chargeable income exceeds UGX. 335,000.

UGX 48,500 plus 30% of the amount by which chargeable income exceeds UGX 410,000 and where the chargeable income of an individual exceeds UGX 10,000,000 an additional 10% charged on the amount by which chargeable income exceeds UGX 10,000,000.

Remarks

Effective 04 October 2022, under Schedule 1 of the PAYE return on the URA online portal, the tax rate for computation of PAYE for employees liable to “fixed rate” has been adjusted to include 40% of the taxable secondary employment income earned by employees.

Upon the implementation of this amendment, the PAYE return allows for both 30% and 40% fixed rates on taxable employment income earned from secondary employment, depending on the amount paid to the secondary employee. Where the employee’s employment income exceeds UGX 10 million, the fixed rate applicable is 40%. However, where the employee’s employment income is less than UGX 10 million, the fixed rate of 30% applies.

Value Added Tax (VAT) Under Schedule 3 of the monthly VAT returns, a validation control has been added against the declared VAT Deferred at importation.

The return will only allow amounts that exist in ASYCUDA and are supported by fiscalised import receipts from EFRIS.

Indirect Taxes - These are taxes levied on consumption of goods and services collected by an Agent (Taxpayer). Notable indirect taxes include Value Added Taxes (VAT), excise duty, import duty.

VAT VAT is charged at the rate of 18% on the supply of goods and services (taxable supplies) made by a taxable person, other than exempt supplies; and imports other than exempt imports. There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies. Output tax must be levied on all supplies except exempt supplies.

Excise Duty This is a tax that is imposed on specified imported or locally manufactured goods, and services.

Essentially it is a tax on “luxury” items. The applicable rates may be specific or ad valorem.

The tax is imposed on the value of the import; and in the case of locally manufactured goods, the duty (local excise duty) is payable on the ex-factory price of the manufactured goods.

Customs Duty This is a tax levied on goods imported (import duty) or exported (export duty) from Uganda at specific or ad valorem rates.

Other key issues in Taxation

Topic Features/ Remarks

A person who carries on business activities or intending to carry on business activities is required to apply to be registered for VAT, if the turnover of taxable supplies of the enterprise for the year is UGX 150 million or greater, or if the person earns revenue of UGX 37.5 million in a quarter(3 months).

Exported locally manufactured goods are exempt from excise duty.

Persons supplying excisable goods and services are required to register and file monthly

Returns to the tax authority by the 15th day of the month following the month in which delivery of the goods was made.

The East African Community Customs Management Act 2004 (EACCMA) is the legal framework for customs operations in Uganda and the region as a whole.

E – Tax Filing A taxpayer registered with URA for any tax type as the only source of income other than employment has an obligation to submit a return for the tax period defined by the respective tax law. URA has facilitated the taxpayer to fulfill this obligation by introducing electronic filing in of TAX on the ura portal ura.go.ug.

A major development in E-filing 2024 is the introduction of the new web-based system for the Local excise Duty (LED) returns effective 1 November 2024.

Residency for tax purposes

Annual Tax Return filing

A resident individual is a person who has a permanent home in Uganda; or is present in Uganda: for a period of 183 days or more in any twelve (12) months period that commences or ends during the year of income; or during the year of income and in each of the two preceding years of income, for periods averaging 122 days in each such year of income; or is an employee or official of the government of Uganda posted abroad during the year of income.

A resident company is one which:

(a) Is incorporated in Uganda under the laws of Uganda

(b) Is managed or controlled in Uganda at any time during the year of income.

As of September 2024, Section 16(5) of the Tax Procedures Code Act requires all taxpayers with an annual turnover of UGX 500 million or more to submit audited financial statements prepared by a certified accountant when filing their income tax returns.

There

also Penalty for underestimating of

This guide has been prepared by DATIVA & ASSOCIATES, independent members of Antea

DATIVA & ASSOCIATES

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Tel: +256-312-104097 admin@dativaassociates.com www.dativaassociates.com

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08008 – Barcelona

Tel.: + 34 93 215 59 89

Fax: + 34 93 487 28 76

Email: info@antea-int.com www.antea-int.com

This publication is intended as general guide only. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they encounter. This information should not be relied on as a substitute for such an advice. While all reasonable attempts have been made to ensure that the information contained herein is accurate, not Antea Alliance of Independent Firms neither its members accepts no responsibility for any errors or omission it may contain whether caused by negligence or otherwise, or forany losses, however caused, sustained by any person that relies upon it. © 2026 ANTEA