Auditor General urges cost-benefit review of Uganda’s double taxation treaties

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The Auditor General, Edward Akol, has called on the government to review Uganda’s double taxation agreements (DTAs) with other countries to assess the actual benefits accruing to the country.

“I advised the permanent secretary and secretary to the treasury, Ramathan Ggoobi, to expedite the assessment of all DTAs to determine the country’s benefit from these agreements,” Akol said.

In his report for the year ended December 31, 2025, presented to Parliament for scrutiny, Akol noted that Uganda is currently party to nine DTAs.

These bilateral agreements are intended to prevent the same income or capital from being taxed twice, a common challenge in international trade and investment. Capital-importing countries such as Uganda often enter into these treaties to attract foreign investment by reducing the tax burden for investors from capital-exporting countries.

Akol explained that tax treaties frequently shift taxing rights away from developing countries to developed economies, with the expectation that increased foreign investment will offset the revenue lost.

However, he noted that Uganda lacks centralised statistics to measure whether the benefits gained from DTAs outweigh the revenue foregone.

“Reliable data would enable the country to evaluate the extent to which it benefits from these agreements,” he said.

Without such data, assessing the viability of the treaties remains difficult, which can result in suboptimal policy decisions.

Akol observed that, previously, Uganda Revenue Authority income tax returns were not structured to capture critical information on taxpayers benefiting from DTAs.

Under the Government’s Tax Expenditures Management Framework, the Uganda Revenue Authority has agreed to amend income tax returns by the end of the 2025/26 financial year to capture DTA-related data.

Once this information is available, the government will undertake a cost-benefit assessment starting in the 2026/27 financial year and consider appropriate policy reforms, Akol explained.