Enhanced focus on digital transactions With the digital economy growing rapidly, tax authorities worldwide, including the URA, are paying more attention to digital transactions. E-commerce, digital services, and online marketplaces are becoming significant contributors to the economy, and they are now firmly on the tax radar. Businesses engaging in digital transactions should ensure they understand the tax implications and comply with the relevant digital services tax regime recently introduced under the VAT Act and the Income Tax Act.
TAXATION AND CORPORATE GOVERNANCE; BUSINESS LESSONS FROM THE KANSAI PLASCON EXPERIENCE AFTER THE SADOLIN PAINTS TAKEOVER.
With Uganda's compliance systems undergoing significant changes, SMEs must adapt their management teams in a manner that ensures they keep abrest of these changes. This article highlights the critical importance of governance and taxation non-compliance risk due diligence in mergers and acquisitions but more importantly, it provides for SMEs a key lesson to draw; which is that bad tax compliance practices and inadequacies in governance will almost without a doubt always end up shackling the business with substantial tax liabilities which can easily kill off the business.
EXPLORING THE CULTURE OF KICKBACKS IN CORPORATE KAMPALA; BUSINESSES BEING ENSNARED INTO TAX PROBLEMS.
Businesses are finding themselves trapped in a double edged sword situation, where refusing to partake in these illicit transactions means losing lucrative opportunities, while succumbing to the pressure to pay kickbacks undermines the financial integrity of transactions and creates a taxation conundrum for the business paying the kickback especially if the kickback forms a sizeable component of the transaction.So the dilemma is pay the kickback and the transaction won't make commercial sense or don't pay the kickback you lose the business altogether. This creates a Catch-22 for businesses, a classic case of heads you lose, tails you lose. The repercussions of this systemic issue are far-reaching, as businesses find themselves ensnared in a struggle to account for and treat a transaction as wholly legitimate, even though a portion of it is done off record on their side(the kickback component).
COMMERCIAL DISPUTES, RISK MANAGEMENT AND THE ADVENT OF THE KNOWLEDGE ECONOMY ERA.
Unlike the bygone era, where legal practice functioned in a less complex business environment, modern lawyers are much more attuned in commercial awareness. Today's legal practitioners comprehend the pivotal need for understanding and mitigating risk in a manner that aligns with business objectives, which is mostly centered around growth, market share and relationships.
COMMENDING URA’S EFFORTS ON KIKUUBO AND SMEs TAX EDUCATION.
For years, the URA's approach to these businesses may have seemed heavy-handed, as it focused on aggressive tax collection without adequately guiding these entrepreneurs on the right path to compliance. It was a recipe for failure, and everyone suffered the consequences. Businesses struggled to survive, and the government continued to miss out on the tax revenue it deserved.
Income Tax(Amendment) Act 2023: Repeal of investment incentives could hamper industrialization and job creation efforts.
The government of Uganda grants fiscal incentives to qualifying investors to promote both domestic and foreign investment. These incentives focus on industrialization with the objective of job creation, value addition to local raw materials, export promotion, and promotion of tourism, among others. These include incentives for investments located in industrial parks or free zones and establishment of new factories. For investors who are able to take the full advantage of all incentives for which they qualify under the different heads, they are able to minimise their chargeable income and consequently minimise tax liabilities in the short and long term.
TAKING A BANK LOAN TO PAY TAX; WHY YOU SHOULD TAKE TAX ADVICE FIRST.
Leveraging your business to pay taxes through loans might create a situation where you trade one liability for another with more adverse commercial implications, bearing in mind that whereas tax due attracts interest at minimal rates(2%), commercial banks lend at much higher rates(above 15%).
The informal sector and URA’s struggles with widening the tax base.
"Trading through companies is much more technical and with recent increased enforcement from the regulators, this means entities can no-longer get away with non-compliance as has been the case, and yet tiny businesses can’t absorb the steep compliance costs (both with URA and URSB). I have in the past advised owners of tiny enterprises to stick to sole proprietorship or partnerships as business vehicles until it becomes absolutely necessary to incorporate, in which case those businesses can be sold to corporations in consideration for equity."
Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(1/2).
MARK RUHINDI There are many business owners who have never heard the term ‘tax planning' and those who have but don’t really understand what it entails in the technical sense. I think I can best explain this taxation concept to lay people reading this by making reference to another equally often under-looked aspect of runningContinue reading "Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(1/2)."
Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(2/2).
MARK RUHINDI Tax planning involves arranging one’s commercial affairs taking into account the taxation legal regime in place, in a manner that ensures that a trader pays the lowest taxes possible. Simply put, tax planning is therefore planning around the taxation legal regime in place for tax efficiency. It aims to reduce one's tax liability through the utilisation of tax exemptions,Continue reading "Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(2/2)."
Bujagali Energy v URA: TAT Clarifies Foreign Currency Conversion Rules for Infrastructure Taxation in Uganda
Uganda’s Tax Appeals Tribunal has delivered a land-mark ruling with far reaching Tax and commercial implications for East Africa’s infrastructure, project finance and the general public-private partnerships market. In Bujagali Energy Limited v Uganda Revenue Authority, TAT Application No. 4 of 2024, the Tribunal was asked to determine the reckoning event when foreign currency denominated project costs should be converted into Uganda Shillings for purposes of computing the historical cost base of depreciable assets, for purposes of ascertaining the capital deduction allowances for those assets. The application challenged administrative additional income tax assessments arising principally from the interpretation of section 56(2) of the Income Tax Act, which governs the conversion of forex amounts into Uganda Shillings for tax reporting purposes, where the taxpayer has with the commissioner’s permission kept books of accounts in a foreign currency for tax reporting purposes. The Tribunal favored the “date the amount is incurred” as the primary reckoning event for cost-base construction, where currency conversion tax rules are in purview. The decision is important because many infrastructure SPVs in Uganda and across East Africa are externally financed, maintain books in foreign currency, incur heavy capital expenditure over long construction periods, and can only claim capital tax deductions upon commissioning. Important bottom-line: The Tribunal’s view is that foreign currency accounting may explain the commercial architecture of a project, but it does not override the statutory conversion rules under the Income Tax Act. The Tribunal’s view that commercial architecture (keeping books in USD) does not dictate statutory tax rules, highlights the necessity of maintaining a “shadow” asset cost-base ledger in local currency from Day 1 of construction for capital intensive projects where accounting in foreign currency is mandated as part of project financing contractual obligations. This is because the implication of the ruling is that a capital intensive project’s tax model must now reflect local currency conversion at every expenditure point where accounting is not in local currency.
Uganda’s 2026 Tax Amendment Bills: A Practical Guide to the Main Changes and Their Commercial Impact.
Uganda’s 2026 tax amendment bills are best read together, not in isolation. Taken as a package, they point to a set of key policy tweaks that includes: widening the tax base, moving collection closer to the point of payment, hardening digital compliance, and preservation of only a limited set of targeted incentives. Across income tax, VAT, excise duty, stamp duty, tax procedure, gaming, and road-use regulation, the direction is broadly the same: expand the effective tax net, improve collection at source, tighten compliance administration, and preserve only a limited number of targeted incentives. The commercial significance of this package lies not only in tax rates. It lies just as much in timing, cash-flow impact, and compliance structure. Several of the proposals move tax collection closer to the payment event itself. Others raise transaction costs directly. Others still make the digital compliance framework harder to ignore. Taken together, the package will matter to employers, lenders, investors, contractors, telecom operators, gaming businesses, developers, manufacturers, importers and high-net-worth individuals.
Proposed 2026–27 PAYE Threshold Amendments in Uganda: Practical Impact on Resident Individual Taxpayers
The Uganda Ministry of Finance has proposed a revision to the income tax bands applicable to resident individuals in Uganda for the 2026–27 fiscal year. Taken together, the proposed PAYE thresholds suggest a deliberate attempt to ease pressure on employment income, especially at the lower end of the scale. These proposed amendments to the Income Tax Act are part of the broader raft of proposed amendments currently before parliament. The principal effect of the proposal is an upward adjustment of the tax-free threshold and a reconfiguration of the lower and middle bands. At a practical level, the proposal appears designed to reduce PAYE exposure for resident employees, particularly those in the lower-income brackets. For higher earners, the proposal still yields relief, although the benefit becomes fixed once income moves beyond a certain level. This note compares the current resident individual thresholds against the proposed regime, and illustrates the effect on taxpayers falling within each band using worked examples.
Practitioner Breakdown of Uganda’s Income Tax (Amendment) Bill, 2026: Wider Tax Base, New Commercial Pressure Points for Taxpayers.
The bill proposes two connected changes in relation to non-business assets. First, it amends section 20 to include income derived from the disposal of a non-business asset. Second, it amends section 130 to require a person who purchases a non-business asset to withhold tax, with Schedule 4 setting the rate at 6% of the gross payment. This is a critical amendment for real estate especially and is a veiled attempt to return an amendment that was rejected by parliament in the year 2024. That amendment sought to impose a final withholding tax on gains on disposal of non-business assets at a rate of five percent, with gains computed using the already existing capital gains tax rules. The earlier proposed tax had been imposed on gains from the disposal of; shares of a private company; land in cities or municipalities except the principal place of residence; and rental property that is subject to rental tax. The current proposed amendment is therefore a further attempt by the government to assert taxing rights on non-trading transactions through a charge to tax similar disposals as rejected by parliament in 2024.
Uganda’s Tax Framework on Automatic Exchange Of Information On Foreign-Sourced Income: Key Compliance Insights.
This article is intended to serve as a practical point of reference for taxpayers, professionals and technocrats trying to understand the MAAC legal framework in Uganda. It proceeds with definitions first, process next, Uganda context after that, and finally the practical compliance implications. The core point I emphasized in my keynote address at the Commissioner General's AEOI and VDP awareness Breakfast meeting of the 27th February 2026 is once again emphasized in the article, which is that, in the age of automated transparency, the question is no longer whether offshore financial footprints can in principle become visible to tax authorities. Tax administration is increasingly driven by technology, systems and data. As a result, taxpayer compliance is increasingly becoming evidence-driven. The practical question for the sophisticated taxpayer is no longer merely whether the tax authority can see the offshore footprint. It is whether the taxpayer can explain it, reconcile it and prove the filing position attached to it. The real question therefore is whether the taxpayer, the reporting financial institution, or both, can explain that footprint coherently, consistently and with evidence.
Uganda’s Digital Services Tax Landscape in 2026 vs Pillar Two, Global Minimum Tax and the OECD’s Side-by-Side Package.
The international tax landscape continues to transform rapidly in response to the twin pressures of digitalisation and profit shifting by multinational enterprises (MNEs). Many low- and middle-income countries, including Uganda, have adopted unilateral Digital Services Taxes (DSTs) as an interim measure to ensure that digitalised businesses with minimal physical presence nonetheless contribute tax where economic value is created. These unilateral measures emerged against the backdrop of stalled consensus on a coordinated global response to the taxation of digital activities under the Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), Pillar Two. However, as we enter 2026, the international tax policy environment has shifted again, notably with the recent agreement by over 145 jurisdictions on a revised global minimum tax package aimed at preserving taxing rights of jurisdictions where these MNEs operate through digitalised business models that require little or no physical presence. This agreement does not abandon Pillar Two; rather, it modifies its application through a “side-by-side” framework that allows certain jurisdictions, most notably the United States to operate parallel domestic minimum tax regimes while still achieving the policy objective of a 15 % global minimum tax. This article explains where DST sits in this evolving framework, clarifies key positions from earlier DST debates, and assesses the implications of the side-by-side global minimum tax agreement for both DST regimes and broader international tax cooperation.
Resumption of Services and Tax Risk Outlook for 2026
As we enter the year ahead, we remain firmly aligned with your business objectives, to continue to deliver unrivaled technical acumen in managing each and every one of your mandates across tax and business law, and with the same value proposition of Integrated Tax and legal Excellence, through our two integrated professional services arms.
MRT Tax 2025 Year in Review: The Market and Key Tax Trends
As we draw the curtains on 2025, we reflect on a year defined by transformative shifts in the tax landscape, from local, regional and international standpoints. 2025 has also been a defining one for our firm across advisory, tax controversy, transactions practices, and we are grateful to our clients for the confidence placed in us through the sensitive and high‑stakes mandates we received, as you sought our guidance to help you navigate tax complexity with confidence. We extend an equal amount of gratitude to our peers and collaborators–locally, regionally, and internationally. A Year of Excellence, Collaboration, and Global Recognition Our journey this year has been marked by significant milestones that reinforce MRT Tax’s position as a leading tax firm in Uganda. Recognition and Rankings: MRT Tax received nomination for the prestigious Tax Firm of the Year Award – Uganda at the ITR EMEA Tax Awards 2025 and was subsequently recognised in the ITR World Tax 2026 rankings as a Notable leading tax practice in Uganda. The Founding Managing Partner, Mark Ruhindi received Individual Recognition as a Highly Regarded Practitioner-General Corporate Tax. Strategic Alliances: We entered into strategic collaborations with The Cragus Group, one of the GCC’s leading independent tax and transfer pricing firms, and Tax Consulting South Africa (TCSA), a market leader in taxation in South Africa. These relationships significantly enhanced our ability to advise our clients in international trade on cross‑border structuring, transfer pricing, and international tax risk that crosses into those key trade and investment corridors and vice-versa.
2025 OECD Rules Update on Remote Workers: Tax Insights on Cross-Border Human Capital Management.
The 2025 OECD Model Convention Update on the International Taxation concept of Permanent Establishments(PE) has fundamentally redefined Human Capital and Workforce Management in the context of cross-border remote working. These changes, which African nations like Uganda are expected to localise as domestic tax law, widens cross-border tax risk exposure for Multi-National Enterprises(MNEs) beyond commercial presence through physical offices. The news rules recognise the notion of commercial presence through human capital and remote workers working from a home or a similar place in another jurisdiction. This opinion critically analyses the PE concept and its application to cross-border remote working in the context of Uganda's current PE law, and further discusses the likely implications of the update from two perspectives: First, the implications for global and regional firms and technology start-ups scaling across borders, with emphasis on emerging human capital management complications likely to arise once African countries, including Uganda, localise the update into domestic tax law. Secondly, the opinion discusses the advantages it offers to tax administrations(OECD Member nations and nations that eventually localise the update into domestic law), particularly on combating tax avoidance by multinational enterprises (MNEs). For the non-technical readers, I will be returning to explain the concept of a PE in simple terms but below are the new changes in brief: The New Test: A PE is now strongly indicated if an employee works from a home office in State A for 50% of their total working time for their Non-Resident employer in State B AND there is a commercial reason for their presence in state A (e.g, servicing local clients and time-zone alignment). The changes have explicitly rejected cost saving or employee convenience as sole justification for remote cross-border working. Impact on Tax Administration: The update is a powerful anti-avoidance tool for Tax Authorities, allowing them to assert taxing rights based on functional substance rather than just legal form(e.g work-from-anywhere contract clauses permitting cross-border remote working), materially expanding the tax base beyond the current 183-day Service PE rule. Headache for MNEs and Tech Start-ups: The new rules transform low-cost, agile market testing for tech start-ups into a high-cost compliance burden for start-ups and other regional businesses trying to enter new markets and to scale across-borders. The rules will likely result in immediate, non-negotiable Payroll, Social Security, and Immigration risk above Corporate Income Tax, aggressively eroding the limited cash runway of young scaling companies, and rope companies into a more complex compliance matrix.
Navigating Foreign Income Taxation in Uganda: Key Tax Insights on Offshore Asset holdings
In the last quarter of 2025, a significant number of Ugandans in the diaspora alongside resident High-Networth taxpayers with offshore interests received emails from the Uganda Revenue Authority (URA) conveying a directive that might be signaling the end of “Offshore Anonymity” for Ugandan Taxpayers In the emails, URA informs taxpayers that it has received information indicating that “you have earned foreign income or gains” and that “Preliminary analysis indicates that one or more foreign financial accounts or assets associated with your name and TIN” The taxpayer are then given seven days to review and regularize their tax affairs before commencement of a formal investigation. This is not routine correspondence, but rather one that marks a new phase in Uganda’s tax administration, one defined by unprecedented financial transparency and access to foreign financial information regarding the commercial activities of taxpayers. The notices confirm that Uganda has fully operationalized the global data-exchange framework built around the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC), following the Uganda Parliament’s enactment of the Convention on Mutual Administrative Assistance in Tax Matters (Implementation) Act, 2023. Under this framework, Foreign Jurisdictions volunteer taxpayer information on income generating asset holdings, transactions that might have resulted in taxable gains, emoluments subject to tax in Uganda, among other categories of information relevant to tax administration.