Business 11 May 2026 Daily Monitor (Uganda)
Taxing Loss-Making Companies: A Policy Blunder Threatening Ugandan Businesses
Uganda's proposal to tax companies that are already operating at a loss due to economic pressures like high interest rates and currency depreciation risks stifling businesses and investor confidence. Experts warn this could lead to job losses and hinder economic growth. Source: https://www.monitor.co.ug/uganda/business/prosper/why-taxing-loss-making-companies-is-a-policy-disaster-5454648
A potential policy shift in Uganda, which could see loss-making companies being taxed, is drawing sharp criticism from business leaders and economists. The proposed measure, aimed at increasing government revenue, is being viewed as a significant threat to the survival of businesses already struggling with a turbulent economic climate.
Factors such as soaring interest rates, a depreciating currency, persistent supply chain issues, and rampant inflation have created a challenging operating environment. Forcing these businesses to pay taxes despite their current financial standing could push many into insolvency. This, in turn, could lead to widespread job losses and a decline in overall economic activity.
Economists argue that such a policy contradicts standard fiscal principles and could deter both domestic and foreign investment. Instead of encouraging growth, it risks creating a climate of uncertainty and discouraging entrepreneurship. The Uganda Revenue Authority (URA) and policymakers are urged to reconsider this approach and explore alternative revenue generation strategies that do not penalize struggling enterprises.