economy 14 April 2026 The Observer (Uganda)
Uganda's 2026 Tax Reforms: Widening the Net and Boosting Revenue
Uganda's government is rolling out ambitious tax changes for the 2026/27 financial year to lift the tax-to-GDP ratio from 13% toward 16%, funding growth amid rising public spending. Key shifts include new taxes on asset sales, software royalties, and minimum corporate levies, balanced by VAT relief for small businesses. Source: https://observer.ug/news/what-the-2026-tax-proposals-mean-for-ugandans
Uganda gears up for the 2026/27 fiscal year with tax proposals aimed at boosting domestic revenue. The low tax-to-GDP ratio of around 13%, below the regional average, drives efforts to hit a 16% target while curbing foreign debt dependence.
Public investments in infrastructure and services are surging, pushing the Uganda Revenue Authority to rethink tax collection. The reforms emphasize taxing transactions and consumption in real time, expanding the tax base significantly.
New measures target gains from selling non-business assets with a 6% withholding tax at the point of sale, shifting compliance to buyers for upfront collection. Businesses reporting losses over seven years face a 0.5% minimum tax on gross income to counter perceived avoidance, though critics say it hits genuine investors.
Software payments, once taxed at 5% as digital services, now count as royalties at 15% withholding tax, hiking costs for importers who may pass them to consumers. Withholding tax extends to telecoms, gaming, and entertainment sectors.
On VAT, the registration threshold rises from Shs150 million to Shs250 million, sparing small firms administrative burdens. EFRIS users skip withholding VAT as a digital compliance perk, but input VAT on imported software gets denied.
Excise duties climb on fuel, sugar, plastics, and alcohol to raise funds and curb consumption, likely raising living costs. Stamp duty on property and shares doubles to 3%, with new vehicle duties; a waiver clears pre-2016 arrears.
These changes blend revenue gains with enforcement tech, but spark debate on balancing growth and taxpayer burdens in a digital, transaction-focused system.
Source: The Observer (Uganda)