Overview of Key Tax Policy Changes for FY 2025/26:

The budget introduces several new tax policy measures and amendments to existing tax laws, aiming to raise an additional Shs 538.6 billion34. These measures are designed not only to generate revenue but also to support business growth and enhance tax administration, encouraging voluntary compliance and reducing loopholes5.

Here are the key changes:

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Income Tax:

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Exemption for Start-up Businesses: A three-year income tax holiday has been granted to start-up businesses established by citizens after July 1, 20256. This incentive is intended to foster innovation, encourage the formalization of Small and Medium Enterprises (SMEs), enhance business survival, and promote employment6.

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Exemption from Capital Gains Tax on Transactions: Government has removed capital gains tax on transactions where an individual transfers an asset to a company they have established and control7. This policy aims to encourage the formalization of businesses that currently operate informally under personal names, removing the tax burden associated with transitioning to more structured corporate entities for growth, finance access, governance, or succession planning7.

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Income Tax Exemption for Bujagali Hydro-Power Project: An income tax exemption has been granted to Bujagali Energy Limited for one year, until June 30, 2026, to mitigate a rise in electricity tariffs in accordance with contractual obligations8.

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Stamp Duty:

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Removal of Stamp Duty on Mortgages and Agreements: Stamp duty on mortgages and agreements has been removed9. This reform seeks to lower the cost of debt for businesses and individuals and alleviate the financial burden incurred when entering into agreements9.

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Tax Procedures Code:

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Waiver of Interest and Penalty for Voluntary Payment of Outstanding Principal Tax: The waiver period for any outstanding interest and penalties as of June 30, 2024, has been extended, provided the taxpayer pays the principal tax by June 30, 202610. This measure provides relief to businesses and individuals to help them settle outstanding tax liabilities and resume normal operations10.

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Value Added Tax (VAT):

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Reform of the Penalty Regime for Non-Compliance with EFRIS: The penalty structure for non-compliance with the Electronic Fiscal Receipting and Invoicing System (EFRIS) has been amended. Instead of a fixed Shs 6 million per invoice, the penalty will now be twice the tax owed by the taxpayer1112. This change addresses concerns about disproportionately high penalties and is intended to encourage taxpayers to embrace EFRIS for improved tax compliance, reduced human interaction with URA staff, and promotion of transparency1213.

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Excise Duty:

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Increased Taxes on Cigarettes: Excise duty on cigarettes has been increased to discourage consumption and generate additional revenue14. For soft cap cigarettes, the duty rose to Shs 65,000 per 1,000 sticks (from Shs 55,000), and for hinge lid cigarettes to Shs 90,000 per 1,000 sticks (from Shs 80,000). For those outside EAC, the increase is more significant14.

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Adjusted Excise Duty on Beer Manufactured with Local Raw Materials: The excise duty rate of 30 percent or Shs 950 per liter on beer manufactured from barley grown and malted in Uganda was removed as it was redundant. The excise duty on beer manufactured with at least 75 percent local raw material content (excluding water) has been adjusted to 30 percent or Shs 900 per liter, whichever is higher, to ensure consistent tax amounts regardless of specific or ad valorem rates15.

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Taxes on External Trade:

Introduction of an Import Declaration Fee on Imported Items: A small fee of 1 percent of the customs value has been imposed on taxable items under the common external tariff to align Uganda's tax policy with other EAC Partner States like Kenya16.

Establishment of an Export Levy on Wheat Bran, Cotton Cake, and Maize Bran: An export levy of USD 10 per metric ton has been imposed on these products to encourage local value addition, particularly in animal feed production, and create jobs within Uganda, as these products are currently exported as raw materials and re-imported as finished goods17.

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Taxes on Textiles:

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Reduced Import Duty on Imported Fabrics and Garments: The import duty on imported fabrics for value addition has been reduced to USD 2 per kilogram or 35 percent, whichever is higher (from USD 3 per kilogram or 35 percent)18. Similarly, the import duty on garments has been reduced to USD 2.5 per kilogram or 35 percent (from USD 3.5 per kilogram or 35 percent)18. This change responds to traders' requests and aims to support local value addition in textiles18.

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Social Media Content for a Tax Consultant Company in Uganda

Here are 10 "article-like" content pieces that a tax consultant company in Uganda could share on its social media pages, drawing on the budget speech:

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1.     Heading: New Year, New Opportunities: A Tax Holiday for Ugandan Startups! Content: Great news for budding entrepreneurs! The Uganda Budget FY2025/26 introduces a 3-year income tax holiday for new start-up businesses established by citizens after July 1, 2025. This move aims to fuel innovation, formalize SMEs, and boost employment. Are you planning to launch your dream business? This is your sign! Contact us to understand how your start-up can benefit. #UgandaBudget #TaxHoliday #StartupUganda #BusinessGrowth #TaxConsultantUg

2. Heading: Going Formal? Capital Gains Tax Just Got Easier in Uganda! Content: For many Ugandan businesses operating informally, scaling up meant a tax headache. Not anymore! The FY2025/26 Budget exempts capital gains tax when individuals transfer assets to their own established companies. This is a game-changer for formalizing your business, accessing finance, and planning for the future. Talk to our experts about seamlessly transitioning your enterprise. #FormalizeYourBusiness #UgandaTaxes #CapitalGainsTax #SMEUganda #TaxStrategy

3. Heading: Lowering Business Costs: Say Goodbye to Stamp Duty on Mortgages & Agreements! Content: Fantastic news for individuals and businesses seeking financing! The Uganda Budget FY2025/26 has removed stamp duty on mortgages and agreements. This progressive reform will directly reduce the cost of debt and the financial burden associated with various legal agreements. How will this impact your next big venture? Let's discuss! #CostOfDoingBusiness #StampDuty #UgandaFinance #DebtManagement #TaxSavings

4. Heading: EFRIS Penalties Reformed: Fairer Compliance Ahead for Ugandan Businesses! Content: Attention, taxpayers using EFRIS! The budget brings a major reform to EFRIS non-compliance penalties. Instead of a fixed Shs 6 million per invoice, the penalty will now be twice the tax owed. This fairer approach aims to encourage voluntary compliance and reduce burdensome interactions with URA. Embrace EFRIS for efficiency – we can guide you! #EFRIS #TaxCompliance #URAUganda #BusinessEfficiency #TaxAdvice

5. Heading: Out with the Old Debt, In with the New: Tax Penalty Waiver Extended! Content: Have outstanding principal tax liabilities? The Uganda Budget FY2025/26 extends a waiver for interest and penalties if the principal tax is paid by June 30, 2026. This is a crucial relief measure to help businesses and individuals clear their dues and restart fresh. Don't miss this opportunity to get your tax affairs in order! #TaxRelief #UgandaRevenue #FinancialRecovery #TaxPlanning #ClearYourDebts

6. Heading: Local Value Addition Boost: New Export Levy on Bran Products! Content: Uganda is pushing for more local value addition! The FY2025/26 Budget imposes a USD 10 per metric ton export levy on wheat bran, cotton cake, and maize bran. This is a strategic move to encourage processing these raw materials locally, creating jobs and boosting domestic animal feed production. Are you in the agro-processing sector? This affects you! #ValueAddition #AgroIndustry #ExportLevy #MadeInUganda #EconomicGrowth

7. Heading: Import Duty Cuts for Textiles: A Win for Local Value Addition! Content: Good news for textile traders and manufacturers! The budget has reduced import duty on imported fabrics and garments. This responds directly to industry requests and aims to promote local value addition in the textile sector. How can your business leverage these reduced rates for higher earnings? Our team has the insights! #TextileIndustry #ImportDuty #LocalManufacturing #UgandaTrade #TaxBenefits

8. Heading: Fueling Local Economy: Investment in Wealth Creation Initiatives Continues! Content: Beyond tax policies, the FY2025/26 Budget allocates Shs 2.43 trillion for wealth creation programs like the Parish Development Model (PDM), Emyooga, UDB, and Agricultural Credit Facility. These funds are directly passed on to Ugandans for commercial agriculture, industrialization, and digital transformation. Your business could benefit from these strategic investments! #WealthCreation #PDM #UDB #UgandaEconomy #InvestInUganda

9. Heading: Strengthening Economic Pillars: Focus on Infrastructure & Energy! Content: The budget commits Shs 6.92 trillion for integrated transport infrastructure and Shs 1.04 trillion for energy development next financial year. This includes road construction, railway rehabilitation, and expanding electricity access and generation capacity. Such investments lay a strong foundation for private sector growth and reduced operational costs. Plan your business expansion with Uganda's infrastructure development in mind! #InfrastructureUG #EnergySector #BusinessEnvironment #UgandaDevelopment #InvestmentOpportunities

10. Heading: Economic Outlook: Uganda's Growth Trajectory Continues! Content: Uganda's economy is set to grow faster by at least 7.0 percent in FY2025/26, expanding to Shs 254.2 trillion (USD 66.1 billion)19. With controlled inflation, a stable shilling, and a focus on socio-economic transformation, Uganda is becoming increasingly attractive to investors. Stay informed on how these positive economic indicators can benefit your business. #UgandaEconomy #EconomicGrowth #FDIUganda #StableEconomy #BusinessInsights