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.