KAMPALA, Uganda — Several new taxes and tax changes have officially taken effect in Uganda following the start of the 2026/27 financial year on July 1, bringing changes that will affect employees, businesses, investors, entertainers, mobile money agents, bettors and importers.
The tax measures became operational after President Yoweri Museveni assented to the Tax Amendment Acts that were passed by Parliament as part of the 2026/27 National Budget. Government says the reforms are intended to increase domestic revenue, improve tax compliance, promote local manufacturing and provide relief to lower and middle income earners.
Among the most significant changes is the increase in the Pay As You Earn (PAYE) tax free threshold. Employees earning up to Shs335,000 per month will no longer pay PAYE, up from the previous threshold of Shs235,000. The move is expected to leave more disposable income in the hands of low income workers.
The new law also introduces a 25 percent PAYE tax band for employees earning between Shs410,000 and Shs485,000 per month. The additional tax bracket is intended to reduce the burden on middle income earners by creating a smoother transition between the lower and higher PAYE rates.
Uganda’s entertainment industry is also affected by the new tax measures. Event promoters, entertainment venues and media companies are now required to withhold six percent on gross payments made to resident public entertainers. The government expects the measure to improve tax compliance within the country’s growing creative sector.
Companies borrowing from foreign financial institutions will also face new obligations. A five percent withholding tax now applies to interest paid by resident Ugandan companies to nonresident financial institutions, expanding the country’s taxation of cross border financial transactions.
Telecommunications retailers, mobile network agents and mobile money operators will now have 10 percent withholding tax deducted from commissions earned through telecommunications retail services and mobile money operations.
The gaming industry has also been brought under tighter tax rules. Winners of betting and gaming activities will now be subject to a 15 percent withholding tax on their net winnings, a measure aimed at strengthening tax collection from the rapidly growing sector.
Importers of second hand clothing, commonly known as mivumba, will now pay a 30 percent environmental levy. Government says the levy is intended to reduce environmental waste while encouraging investment in Uganda’s textile and garment industry.
Consumers and businesses should also expect adjustments in the prices of selected goods following changes to excise duty. A flat excise duty of Shs1,000 has been introduced on every 50 kilogram bag of cement, while cooking fat now attracts Shs500 per litre or kilogramme.
Tax professionals have advised employers and businesses to update their payroll systems, accounting processes and withholding tax procedures to comply with the new laws. Failure to implement the changes could result in penalties under Uganda’s tax laws.
The Uganda Revenue Authority has urged taxpayers to familiarise themselves with the new tax measures, review their tax obligations and comply with the updated filing and payment requirements as the 2026/27 financial year gets underway.
