On 30 June 2025 President Museveni assented to nine new Acts, five of which overhaul Uganda’s tax play-book.
If you run a small business or side-hustle, the rules on income tax, VAT, stamp duty, excise duty and general tax procedures have all shifted in your favour—provided you move quickly and compliantly.
Below is a plain-English walk-through of what changed and a game-plan to turn the amendments into real savings or new revenue.
1. Three-Year Income-Tax Holiday for Start-Ups
What changed?
The Income Tax (Amendment) (No. 2) Act, 2025 exempts profits of any business incorporated on or after 1 July 2025whose initial paid-up capital does not exceed UGX 500 million—for its first three years of operation. The company must be 100 % East-African-owned and none of the promoters may have enjoyed the holiday before. parliamentwatch.ug
Make it work for you
- Ring-fence new ideas: Register each new product line as its own entity to lock-in the holiday.
- Time the capital injection: Keep initial capital below 500 m; raise bigger sums after incorporation.
- File nil returns every year—URA can revoke the exemption if you skip compliance.
2. Zero Stamp Duty on Agreements & Mortgages
The Stamp Duty (Amendment) Act, 2025 abolishes the longstanding UGX 15 000 duty on contracts, MoUs and mortgage deeds. parliament.go.ug
Why it matters
- Cheaper to formalise supplier or investor agreements → stronger legal protection.
- Mortgage deeds now cost less to register → lowers the all-in price of bank credit.
- Entrepreneurs can upgrade from handshake deals to enforceable written contracts at zero cost.
3. VAT Tweaks—Cheaper Inputs, Tougher Import Rules
Key highlights in the VAT (Amendment) Act, 2025:
| Provision | Opportunity/Risk | Source |
|---|---|---|
| Anti-fragmentation rule – URA can aggregate separate consignments when checking the UGX 150 m VAT-registration threshold. | Importers can’t dodge VAT by splitting shipments—register early so you can claim input VAT instead of absorbing it. | assets.kpmg.com |
| New exemptions – deep-cycle solar batteries, solar lanterns, biomass pellets, key textile inputs. | Solar dealers & textile manufacturers enjoy lower landing costs; price aggressively to grow market share. | parliamentwatch.ug |
| Zero-rated aircraft supplies, repeal of billet exemption. | Niche unless you’re in aviation or steel; note higher billet cost if you fabricate metal. | kpmg.com |
4. Excise Duty Overhaul—Refunds on Damaged Stock
Besides the usual rate tweaks on fuel, alcohol, plastics and telecom services, the Excise Duty (Amendment) (No. 2) Act, 2025 lets businesses claim back excise already paid on goods that later expire, spoil or are destroyed. ucifa.com
Action plan
- Keep a damage log (batch numbers, photos, dates).
- File a remission claim through URA’s Excise portal; turn dead stock into a cash-flow boost.
- Factor the higher fuel excise into delivery fees or switch to more efficient vehicles.
5. Tax Procedures Code—NIN = Your New TIN & a Two-Year Penalty Amnesty
- National ID replaces TIN for individuals: onboarding staff, opening a URA account, or registering a business is now friction-free. It also means almost everyone is in the crosshairs of the taxman.
- Amnesty on interest & penalties: If you pay any principal tax due before 30 June 2026, URA will wipe all interest and fines that had accrued up to 30 June 2024.
- Tougher EFRIS penalties: VAT-registered firms must issue electronic receipts or face heftier fines.
Quick wins
- Clear old arrears cheaply during the amnesty; request a staggered payment plan if cash-tight.
- Budget for an EFRIS-ready POS (many cost < UGX 800 k) and showcase your “URA-compliant” status to win corporate clients.
Six-Step Entrepreneur Checklist (July-December 2025)
| Month | High-impact move |
|---|---|
| July | Register any new venture (< UGX 500 m capital) to trigger the 3-year holiday. |
| August | Stamp existing contracts & loan documents—now free. |
| Sept | Switch to VAT-exempt solar or textile inputs; update price lists. |
| Oct | Implement an EFRIS-compatible invoicing system. |
| Nov | Audit stock for expiry, file your first excise-refund claim. |
| Dec | Pay off at least part of any old tax principal to lock in penalty waivers. |
Final Thought
Uganda’s 2025 tax reforms reward formal, tech-savvy, locally-owned SMEs. Entrepreneurs who register promptly, digitise receipts, and leverage the new exemptions stand to save millions in shillings, secure cheaper credit, and out-price informal rivals. The window is open—make the regulations work for you, not to you.
Need hands-on help? Consult a licensed tax adviser or URA staffer, but don’t wait: most incentives kick in from 1 July 2025 and some (like the two-year amnesty) close fast.
Written for Uganda’s vibrant maker-doer community striving to build, grow and keep more of what they earn in 2025 and beyond.