economy 24 April 2026 Daily Monitor (Uganda)
Uganda's Tax Reliefs: Billions Lost While the Poor Bear the Brunt
Uganda's government forfeits billions in revenue annually through tax incentives aimed at boosting investment and jobs, but experts question their effectiveness and fairness. These reliefs primarily benefit large firms and multinationals, leaving ordinary citizens to face higher taxes on essentials amid strained public services. Source: https://www.monitor.co.ug/uganda/news/national/tax-reliefs-do-the-poor-also-benefit--5435418
Uganda’s Parliament recently passed new tax laws expected to generate Shs4.8 trillion for the Shs84.2 trillion national budget. However, alongside these measures, the government offers extensive tax reliefs, including income tax exemptions, holidays, VAT waivers, and customs duty reliefs for export businesses, industrial parks, startups, and machinery imports.
These incentives, managed under the Income Tax Act and with the Uganda Investment Authority, aim to attract investment, promote exports, create jobs, and lower business costs in key sectors. Employment incentives also provide a 2% tax cut for firms hiring at least 5% persons with disabilities.
Yet, Tax Expenditures Reports from FY2019/2020 to FY2023/2024 reveal massive revenue losses, peaking at Shs3.7 trillion in FY2022/2023. Customs duty exemptions alone accounted for Shs1.137 trillion (0.56% of GDP) in the latest year.
Tax expert Robert Mbazira from Ernst & Young notes that while some reliefs spur investment and formalization, many fail to deliver promised jobs or benefits relative to the revenue forgone. Large multinationals and established firms dominate beneficiaries, sidelining SMEs and undermining job creation goals.
This revenue gap strains government finances, forcing reliance on loans and higher taxes on fuel, cooking oil (Shs500 per litre), and sugar (Shs300 per kg). Julius Mukunda of CSBAG argues these reliefs do not ease living costs for most Ugandans and cut funds for health, education, and infrastructure.
Mbazira stresses reliefs only ‘trickle down’ with genuine additionality, clear outcomes like jobs and exports, and strict monitoring—conditions often unmet, resulting in benefits for the elite and costs for the masses.
Other challenges include the Taxpayer Registration Expansion Programme adding over 728,000 registrants but with only 20% active; an overburdened Tax Appeals Tribunal with Shs1.5 trillion in unresolved disputes; and meager Shs29.58 billion from the Digital Service Tax due to enforcement gaps against global tech giants.
Opposition leaders like Joel Ssenyonyi and Ibrahim Ssemujju Nganda decry budget inconsistencies, multiple taxation harming businesses, and the lack of a fair policy protecting the vulnerable.
Source: Daily Monitor (Uganda)