Global Entrepreneurship Week: Tax Compliance as a game-changer for SMEs

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At the ongoing Global Entrepreneurship Week (GEW) 2025 in Butabika, a simple but powerful message cut through the lively discussions, exhibitions and business clinics: tax compliance is not a punishment - it is a pathway to growth.

Participants listened with a mix of surprise and awakening as officials from the Uganda Revenue Authority (URA), Uganda Registration Services Bureau (URSB) and tax experts from Ernst & Young dismantled long-held fears around tax payment, replacing them with a persuasive case for compliance as a business advantage.

According to Hafsa Seguya from URA, many entrepreneurs mistakenly view tax institutions as obstacles. In reality, she said, government agencies are modernising rapidly, simplifying processes and making support easily accessible.

“There’s a new business created every day, and policies keep evolving,” Seguya noted. “That’s why our communication must be constant. The good news is that we now have 44 One-Stop Centres nationwide, including 11 in Kampala and Mukono. Even better, most services can be accessed online, and all our systems are interlinked.”

She emphasised that ongoing reforms aim to make Uganda one of the most business-friendly environments in the region. Entrepreneurs no longer need to navigate complex corridors of paperwork -  the tools are now in their hands.

Tax expert Robert Mbazira, a director at Ernst & Young and an SME operator himself, reminded entrepreneurs that compliance is not just a legal requirement - it is a strategic choice.

“Compliance is costly, but non-compliance is even more expensive. If your capital is below Shs 500 million, you qualify for a three-year tax holiday. But many businesses miss out simply because they do not formalise or file returns,” he said, provoking murmurs of agreement.

He cautioned that failure to file returns attracts an annual penalty of sh200,000, a needless burden when online filing is straightforward.

Mbazira further urged entrepreneurs to keep clear financial records and understand their revenue and expenditure flows.

“The law gives you a seven-year window in case of audits. Record keeping is your safety net. These are opportunities hiding in plain sight,” he explained.

He encouraged SMEs to explore Free Zones and Industrial Parks, which offer additional incentives, and to consider employing persons with disabilities to qualify for tax deductions.

Representing the Uganda Registration Services Bureau, Charlotte Mudola underscored the importance of digital compliance. The days of queuing with piles of paper are long gone.

“Most transactions, from name reservation to annual returns, are now done online. It is your duty to file your returns, whether you made a profit or a loss. If you don’t, you risk being struck off the register. You could face hefty fines, and your business may even be published in the media as non-compliant. In today’s competitive market, reputation is everything,” Mudola said.

Being removed from the register, she warned, can damage a brand’s credibility. A Shift in Mindset.

By the end of the session, many participants admitted they had underestimated the benefits of formalisation. What seemed intimidating - taxes, registration, audits - now appeared manageable, even empowering.

Global Entrepreneurship Week continues to shine a light on the realities of starting and scaling a business in Uganda. And as the experts made clear, tax payment is not just a civic duty - it is a game-changer. It opens doors to incentives, shields businesses from unnecessary penalties, and positions entrepreneurs for sustainable growth.

For many SMEs in the room, the message landed with clarity: Compliance is not a cost. It is an investment.