KAMPALA, Uganda — The Ugandan government has introduced seven new legislative bills proposing significant amendments to the nation’s tax structure, encompassing key areas such as Income Tax, Value Added Tax (VAT), Excise Duty, and specifically targeting the burgeoning betting sector. The bills, tabled ahead of the upcoming fiscal year, signal a broad effort to incentivize new businesses, streamline tax processes, and enhance revenue collection across various economic activities.
Among the proposed changes is a notable income tax holiday for qualifying startups established after July 1, 2025, with limited initial capital. This incentive aims to foster entrepreneurship and provide crucial early-stage financial relief. However, tax experts have already pointed to potential ambiguities in the bill’s language regarding eligibility and compliance requirements for these new ventures.
The government is also seeking to refine the rules around “rollover relief” for business reorganizations, extending tax-free asset transfers to individuals incorporating their holdings, provided ownership remains consistent. This move intends to simplify corporate restructuring and avoid taxing purely administrative changes.
In the digital realm, the proposed amendments adjust the digital service tax, differentiating between transactions with related and unrelated entities. This suggests a targeted approach to prevent potential tax avoidance within corporate groups operating digitally in Uganda.
The Tax Procedure Code is slated for an update that would extend and modify a previous waiver on interest and penalties for tax arrears, offering a pro rata reduction based on the amount of principal tax settled. This could provide substantial relief for businesses struggling with outstanding tax obligations.
A significant move towards formalizing the economy is the proposal to link the National Identification Number (NIN) to business licensing. If enacted, a valid NIN would become mandatory for obtaining a trading license, enhancing the tax authority’s ability to track business activities and individual income. This measure also extends to foreign individuals operating in Uganda.
The betting industry faces a notable regulatory shift under the proposed bills. All betting platforms would be required to integrate with a central system linked to users’ NINs, effectively ending anonymous betting and enabling closer monitoring of financial flows within the sector for tax compliance.
These seven proposed tax amendment bills represent a comprehensive approach by the Ugandan government to shape its revenue landscape for the coming fiscal year. The reforms aim to balance support for emerging businesses with measures to broaden the tax base and improve compliance across various sectors, including the increasingly prominent digital and gaming industries. The bills will now undergo scrutiny and debate before potential enactment.
