Tag Archives: 2026 UGANDA TAX AMENDMENTS

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.

TAT Clarifies VAT Refund Rules: Overpaid Tax and Recovery of VAT Wrongly Charged on Exempt Supplies

The Uganda Tax Appeals Tribunal has delivered an important decision on VAT refunds that settles a critical operational friction point between taxpayers and the Uganda Revenue Authority (URA).

The decision concerns key VAT principles and questions that have not been substantially litigated before in Uganda: whether a VAT refund application for VAT paid in error, on supplies which were supposed to be exempt, is valid; and whether a taxpayer who was unregistered for VAT purposes and not a VAT taxable person during the period in issue can make such a VAT refund application.

Case Citation: Portman Square Limited v Uganda Revenue Authority, TAT Application No. 179 of 2025.

The dispute centered on a Shs. 4,064,860,158 VAT refund claim arising from tax mistakenly charged by suppliers on VAT exempt hotel construction services and materials towards the Four Points by Sheraton hotel project situated in Kololo, Kampala.

This decision provides definitive clarity on the legal remedies available when VAT is paid in error on exempt supplies. Crucially, it establishes that a taxpayer’s registration status does not extinguish their statutory right to recover unlawfully collected tax, and it reprimands the tax authority’s tendency to shift administrative reconciliation burdens onto commercial entities.

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.

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.