Tag Archives: TAX EXEMPTIONS

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.

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.

KRA Vs Sendy: Kenya’s High Court VAT Precedent Threatens East Africa’s Gig Economy and Digital Commerce Growth.

Kenya’s High Court has recently delivered a Key decision in the battle over VAT in the ride-hailing/digital platform economy, that risks far-reaching ripple effects across East Africa’s digital commerce landscape. 

The landmark decision fundamentally reclassifies digital platforms as primary suppliers of gig-economy services for VAT purposes. This brings them fully into the VAT net and forces gig workers/entrepreneurs and small merchants into VAT compliance, with potentially far-reaching consequences for the growth, structure, and taxation of the East African digital economy.

The immediate tax implication is that we now have two VATable transactions in every ride or delivery processed through a digital platform operating a similar business model. These are;

Supply from motor vehicle owner to tech platform (input VAT for the platform)

Supply from tech platform to end consumer (output VAT to the tax authorities on full final consideration paid by the end consumer)

This new reality is problematic from a commercial point of view, taking into consideration the nature and level of tax sophistication of most African economies.

The other immediate implication is that thousands of gig-economy participants have been hit with a VAT compliance shock overnight, and the reason is simple; e-commerce platforms lose input VAT if they trade with non-compliant taxpayers. Exposure to commercial activities of too many Non-VAT Traders or informal taxpayers makes the platform’s business model commercially unviable and wipes out margins.

Uganda’s Tax Exemption for Start-Ups: Key Insights for Entrepreneurs.

This fiscal year’s tax amendments included certain key amendments that have been hailed as a critical step in the right direction for tax administration, and particularly the tax exemptions provisions targeting start-ups and similar fledgling businesses.

​The amendment introduced new tax law aimed at fostering and supporting well formalised entrepreneurship, in the form of an income tax exemption for Uganda Citizen owned businesses started after 1st July 2025, for three-years.

Its practical application however requires a precise understanding of how the Uganda Revenue Authority (URA) interprets “new business,”, “associated entities,” and “Compliance” among other tax nomenclature. Yes, as with all incentives, the opportunity lies in the detail. This article seeks to address this detail.

AI’s Disruption of Professional Services: The Rise of Niche Expertise.

The market now favors firms and individuals who deeply understand specific domains or sectors rather than generalists trying to do everything. A “niche within a niche” allows consultants to become irreplaceable for a defined audience or challenge set.

AI may also have provided the easy answer to the all important career decision question for senior consultants and executives in larger legacy firms; Which is whether to choose boutique independence over the politics, processes, and layers of bureaucracy that come with being part of a large firm

Investing in Uganda; Tax Planning and Why Tax Should Lead Your Market Entry Strategy

The decision on corporate structure, i.e, whether to register a subsidiary vs. branch, Financing questions, i.e debt vs. equity, tax residence/domicile/location of holding entities are all strategy questions which are informed by tax considerations. 

Choosing the wrong structure can expose the investor to; Transfer pricing risk, Withholding tax inefficiencies, Loss of treaty benefits, Double taxation and generally, tax inefficiency and a higher tax burden across different tax heads.

But what happens when the company is set up in a way that causes preventable tax leakages or unnecessary friction with the tax authorities?

For any foreign investor entering the Ugandan market, undertaking corporate legal structuring advice without any input from a tax practitioner is a grave mistake.

While the structure may be viable on paper, it might ignore certain critical elements of transfer pricing regulation, international tax treaty benefits and domestic tax compliance aspects that might later work against the investor and require a costly restructuring process.