The Uganda Minister of Finance, Planning, and Economic Development presented the Tax Amendment Bills, 2025 on 27 March 2025, to Parliament for debate. If approved by Parliament and signed by the President of Uganda, the Bills will come into effect on 1 July 2025.

Income Tax (Amendment) (No.2) Bill, 2025

The bill amends the Income Tax Act to expand exemptions and clarify existing provisions. It extends the Bujagali hydro power project’s income tax exemption until 30 June 2032. It also introduces a three-year exemption for businesses established by citizens after 1 July 2025, subject to certain conditions.

The bill corrects and clarifies the wording of Section 21(ae)(vii), expanding exemptions to include manufacturers of textiles, glassware, and other products.

Additionally, the definition of “reorganization” under the “Roll-over relief” regime is broadened to include corporate transfers. The bill also modifies the digital service tax regime, exempting non-resident providers offering digital services to associates in Uganda while subjecting such transactions to tax under Sections 82 or 84. Finally, it adds the International Atomic Energy Agency (IAEA) to the list of exempt institutions.

Value Added Tax (Amendment) Bill, 2025

Proposed Changes:

  • Anti-Avoidance Measures Enhanced: The Commissioner General will have expanded powers to treat split import consignments as a single transaction for VAT registration purposes. 
  • Institutional Exemptions Expanded: The bill aims to exempt the United Nations and related specialized agencies. It also proposes correcting the name of IAEA in the Second Schedule. 
  • Amendments to Schedule 3 (Exempt Supplies): 
    • Substitutes “composite lanterns” with “solar lanterns.” 
    • Clarifies textile supply descriptions. 
    • Repeals VAT exemption for billets. 
    • Adds a new VAT exemption for biomass pellets. 
  • Zero-Rated Supplies Addition: Aircraft will be included among zero-rated items in the Fourth Schedule. 

Excise Duty (Amendment) (No.1) and (No.2) Bills, 2025

Key Provisions:

  • Remission Mechanism for Unsellable Goods: Section 13A will allow taxpayers to apply for duty credits on goods that are damaged, expired, or obsolete, upon submission of supporting documents. 
  • Updated Excise Duty Rates: Increases are proposed for cigarettes, beer, spirits, non-alcoholic beverages, fuel, and plastics. For example, excise duty on imported soft cap cigarettes would double from UGX 75,000 to UGX 150,000 per 1,000 sticks. 

Stamp Duty (Amendment) Bill, 2025

  • Stamp Duty Waivers: Several instruments, including agreements and mortgage deeds, will have their stamp duty reduced to nil. 

Tax Procedures Code (Amendment) Bill, 2025

  • Unified Tax Identification System: New rules will link individuals’ national IDs and businesses’ registration numbers to tax compliance. Entities from jurisdictions with tax treaties must use foreign-issued tax IDs. 
  • License and Registration Restrictions: Without the appropriate identification number, no business license or registration will be issued by public authorities. 
  • Waiver on Interest and Penalties: Taxpayers who settle principal tax due by 30 June 2026 may receive full or partial relief on interest and penalties. 
  • Tougher Penalties on EFD Noncompliance: The fine for failing to use electronic fiscal devices will be doubled to twice the tax due. 
  • Betting Sector Compliance Framework: 
    • Introduction of a centralized payment gateway for casinos and betting activities, tied to the Uganda Revenue Authority system. 
    • Noncompliant operators could face a penal tax of twice the gaming/withholding tax or UGX 110 million, whichever is greater. 
  • Tax Exemption Oversight: Taxpayers benefiting from exemptions must maintain eligibility criteria. If breached, tax due for noncompliant periods becomes payable directly by the taxpayer.

External Trade (Amendment) Bill, 2025

A proposed bill in Uganda introduces a 1.5% infrastructure levy on all imported goods for home use, based on the customs value. Exemptions include certain goods listed in the East African Community Customs Management Act and specified plant and machinery. The bill also proposes a 1% import declaration fee, with similar exemptions.

Additionally, it introduces a USD 10 per metric tonne export levy on wheat bran, cotton cake, and maize bran.

Hides and Skins (Export Duty) (Amendment) Bill, 2025

The proposed bill aims to remove the export levy exemption for certain items listed in Schedule 2 of the Act. These include pickled hides, cattle masks, pizzles, sinews, and glue-stock hides, such as dried cattle hides over four pounds, air-dried sheepskins, goatskins, and calfskins, as well as wet salted cattle hides with an exporter’s certificate. Additionally, game hides obtained under a license, where certified by the chief game warden as not for sale, would also lose the exemption.

Earlier, the government of Uganda enacted a series of amendments to various laws related to taxation, including the Income Tax (Amendment) Act 2024, the Value Added Tax (Amendment) Act 2024, the Tax Procedures Code (Amendment) Act 2024, and the Stamp Duty (Amendment) Act 2024.