By Andrew VM Naimanye
Africa-Press – Uganda. President Museveni has signed nine new tax and economic laws, sparking concern across Uganda’s business and policy landscape over their potential impact on enterprise growth, investor confidence, and national revenue collection targets.
The announcement was made via the president’s official X (formerly Twitter) account on Monday, marking the beginning of the new financial year.
The signed legislation includes amendments to the Value Added Tax, Income Tax, Excise Duty, Stamp Duty, Tax Procedures Code, External Trade, and Hides and Skins export duty, alongside the Appropriation and Supplementary Appropriation Acts for 2025.
While government maintains these laws are part of its strategy to boost domestic revenue and streamline fiscal administration, economists and tax experts have expressed reservations about both the structure and timing of the reforms.
Dr Emmanuel Ssemugenyi, a tax lecturer at Kyambogo University, noted that while some provisions aim to support entrepreneurship, such as tax exemptions for new businesses investing up to Shs500 million, these benefits may be outweighed by the overall burden placed on the formal sector.
“This law provides a positive start for startups, but the reality is that most businesses already operating are going to face a harder time breaking even. The cumulative tax burden is simply growing too fast,” Ssemugenyi said.
Echoing this concern, Uthman Mayanja, Country Manager at PricewaterhouseCoopers Uganda, said that the new measures fail to expand the tax base and instead continue to rely on the same small pool of compliant taxpayers.
“We are seeing the government turning to those who are already paying taxes and squeezing more out of them, rather than investing effort in bringing the informal sector into the tax net. That’s where the real untapped potential lies,” Mayanja said.
Uganda Revenue Authority has been tasked with collecting Shs 33.1 trillion in domestic revenue this financial year, an ambitious target that exceeds last year’s by over Shs4 trillion.
Yet, the URA has fallen short of its targets for the past three consecutive years. Experts warn that unless broader reforms are introduced to widen the tax base, these targets may remain out of reach.
Ssemugenyi pointed out that many small businesses remain unregistered or fail to comply with tax regulations, not necessarily out of evasion but due to systemic barriers such as bureaucracy, poor access to information, and mistrust in how tax revenues are used.
“The informal economy is a huge part of Uganda’s GDP. We can’t ignore it and expect miracles from the formal sector. The tax system must be made easier and fairer if compliance is to improve,” he said.
Mayanja added that even well-intentioned reforms can backfire if they are introduced without consultation or without considering the operational realities of the business community.
“This is not about rejecting taxation. It’s about having a tax policy that promotes growth, encourages formalisation, and does not stifle enterprise through sudden or excessive levies,” he said.
While the new laws contain targeted reliefs for specific sectors, such as agriculture and manufacturing, the dominant view among analysts is that implementation will be key.
Without significant improvements in enforcement, taxpayer education, and administrative efficiency, the expected revenue gains may fall flat.
The debate comes at a time when many Ugandan businesses are still recovering from post-COVID-19 shocks, rising fuel prices, inflation, and limited credit access.
Economists now warn that unless these tax laws are accompanied by broader pro-growth measures, they could further dampen economic recovery and undermine the very revenue goals they were designed to achieve.
Source: Nilepost News
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