Business 18 April 2026 Daily Monitor (Uganda)
Uganda's 50 New Tax Measures: A Burden on the Poor Amid Fiscal Crisis
Uganda's government has proposed 50 tax changes across eight laws aiming to raise Shs4.8 trillion, driven by urgent revenue needs from heavy borrowing and shrinking aid, but tax experts highlight how these disproportionately hit low-income groups like boda boda riders and workers. While some reforms promote efficiency, critics argue the package prioritizes targets over fairness, potentially punishing the vulnerable. Source: https://www.monitor.co.ug/uganda/business/finance/fifty-ways-to-tax-the-poor-5428562
Uganda’s 2026/2027 Tax Amendment Bills introduce 50 changes across eight laws, targeting Shs4.8 trillion in revenue. The government frames these as steps toward fairness and modernization, but tax advisory firms like Grant Thornton, BDO East Africa, SM&Co. Advocates, and PwC reveal deeper motives: desperate cash needs, court frustrations, and exploiting specific sectors.
The fiscal strain stems from massive borrowing for roads, dams, and the Standard Gauge Railway (SGR), coinciding with demands for healthcare, education, and maintenance. Foreign aid has dwindled, while over 90% of 36,000+ VAT-registered businesses are tiny, contributing just 3% of collections. The government plans to waive Shs350 billion in pre-2016 uncollectible debts to clean the books.
Key proposals include reintroducing the Alternative Minimum Tax (AMT) at 0.5% on gross revenue for loss-making firms after seven years—rejected in 2020 but back now. A 5% withholding tax on interest to foreign banks, up from a 2% bid nixed in 2024, signals urgency. Several measures counter Tax Appeals Tribunal losses on interest deductions, gaming taxes, and group definitions, raising concerns over institutional respect.
Sectors like construction face doubled cement taxes, new levies on tiles and paint imports, and stamp duty hikes on land from 1.5% to 3%. Gaming gets a 30% stake tax, 5% deposit levy, and 15% winnings tax. Boda boda operators bear the brunt: new excise and stamp duties total Shs550,000 per motorcycle (Shs2-4 million cost), up to 28% before operations, pitched as income tax proxy for low earners.
Salaried workers see PAYE threshold rise from Shs235,000 to Shs335,000 monthly—first update since 2012—saving Shs10,000-13,750, but eroded by doubled cooking oil excise, tripled sugar duty, and pricier fuel. Adjusted for 74% cost-of-living rise, it should be Shs408,384. Loss-making capital-intensive firms (e.g., mining, oil) risk collapse under AMT, potentially costing jobs and other taxes.
Land sales now trigger 5% Capital Gains Tax, 6% buyer withholding, and doubled stamp duty, with unclear ‘non-business asset’ definitions possibly taxing personal sales like cars or TVs. Projections like Shs200 billion from gaming tax (scrapped in 2023) or AMT seem optimistic amid unproven systems and global fuel pressures.
Positive notes include raising VAT threshold to Shs250 million, exempting medicines/pesticides from infrastructure levies, and bad debt deductions for microfinance. Yet experts say the package reverses sound reform—starting with a Shs4.8 trillion target rather than principles—shifting burdens to the poor while easing creditor pressures.
Uganda’s tax-to-GDP ratio lags at 14.3%, with 1,000 top taxpayers footing 70% of revenue. Parliament debates these Bills April 21-24, 2026, amid FY 2026/2027 appropriations.
Source: Daily Monitor (Uganda)