UGANDA AMENDS TAX LAWS

The Income Tax (Amendment), 2025

HLB Jim Roberts Uganda

The latest Income Tax (Amendment) Bill in Uganda, specifically the Income Tax (Amendment) (No. 2) Bill, 2025, focuses on providing tax exemptions for startup businesses established by citizens and extending exemptions for the Bujagali hydro power project. It also seeks to prescribe the International Atomic Energy Agency as a listed institution and for related matters. 

Image

Key Provisions:

  • Tax Exemption for Startup Businesses:
    The bill proposes a tax exemption for three years for businesses established by Ugandan citizens. To qualify, the business must be registered with an investment capital not exceeding UGX 500,000,000, the citizen or their affiliate must not have previously benefited from the exemption, and the citizen must file a tax return including a business information return
  • Bujagali Hydro Power Project:
    The bill extends the existing tax exemption for the Bujagali hydro power project up to June 30, 2032
  • Listed Institution:
    The bill includes the International Atomic Energy Agency as a listed institution

Legislative Process:

The Income Tax (Amendment) (No.2) Bill, 2025, was introduced in Parliament and is currently at the First Reading stage.

The first reading is a formality where the bill is introduced to Parliament without debate

The bill will then go through further stages including the Second and Third Readings, where it will be debated and potentially amended before being passed by Parliament.

Related Tax Changes:
  • The Tax Procedures Code (Amendment) Act, 2024 has increased the tax amnesty period for the waiver of interest and penalties outstanding as of June 30, 2023, if the principal tax is paid by December 31, 2024
  • It also requires taxpayers to notify the commissioner of their intention to destroy goods in order to claim a deduction for the destruction
  • The Value Added Tax (Amendment) Act, 2024 also introduced some changes, including exempting deep cycle batteries, solar lanterns, and raw materials for their manufacture

In summary: The Income Tax (Amendment) (No. 2) Bill, 2025, aims to support citizen-owned businesses and extend existing tax breaks for the Bujagali project, while the broader tax environment includes other amendments to the Tax Procedures Code and the VAT Act

Image
Get in touch
Whatever your question our global team will point you in the right direction
Start the conversation