Category Archives: CAPITAL GAINS TAX

Uganda’s FY 2026/27 Budget and Tax Amendments: Revenue Mobilisation and the Business Resilience Test.

The FY 2026/27 Budget for Uganda focuses on full monetisation and growth through enhanced domestic revenue mobilisation, digital compliance, and targeted tax amendments, while aiming for fiscal self-reliance.

The Budget emphasizes job creation, sector-specific support, and infrastructure investment. However, the implications for businesses and taxpayers include a shift towards a more digitised and compliance-heavy tax environment, with selective relief measures that may not cushion broader economic pressures.

Challenges such as increased costs for fuel, construction materials, and the contemplated higher regulatory compliance costs necessitate proactive strategies from businesses to navigate this demanding fiscal landscape and ensure resilience amid changing tax dynamics.

Deemed Disposals Capital Gains Taxation in Uganda: Residence and Control Changes(M&A), Insights from Kuku Foods(KFC) v URA

The Tax Appeals Tribunal (TAT) recently issued a landmark ruling in Kuku Foods Uganda Limited v Uganda Revenue Authority, reshaping how indirect corporate restructurings and ownership changes are taxed in Uganda.

The dispute arose from a Uganda Revenue Authority (URA) Capital Gains Tax (CGT) assessment of approximately UGX 4.235 billion levied against Kuku Foods Uganda Limited — the local operating entity of the KFC franchise following an offshore shareholding reorganization.

Key Commentary Bottom-line:

Uganda taxes changes in tax nexus through statutory realisation rules. The rules put in place deemed disposal or deemed realisation events, where Capital Gains Tax liabilities will arise, even where no ordinary commercial sale of an asset has occurred.

Where a taxpayer enters residence, the Income Tax Act protects both the taxpayer and the revenue authority by fixing the opening cost base of relevant assets at market value.

Where a taxpayer exits residence, the Act may impose an exit charge by deeming a disposal at market value.

Where a company located in Uganda undergoes a qualifying change in ownership, the Act may deem the company itself to have realised its assets and liabilities at market value.