Stakeholders call for 'balanced tax regime' to support national development

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Government officials, civil society actors and private sector leaders have weighed in on expectations, concerns and commitments as Uganda prepares the tax policy framework for the financial year (FY) 2026/2027.

Speaking during a media briefing on September 17, 2025, stakeholders underscored the need for a balanced tax regime that supports national development priorities while easing the burden on businesses and citizens.

The discussions, which centred on raw material taxes, revenue administration, tax incentives and streamlined policy reforms, revealed both opportunities and challenges that lie ahead for Uganda’s economy.

UMA calls for relief on raw material taxes

Uganda Manufacturers Association (UMA) chief executive officer Dr Ezra Muhumuza Rubanda stressed that manufacturers are seeking a fair tax regime that reduces the cost of production and encourages local value addition.

“Our key concern where we are engaging is to ensure that the raw material taxes on the raw material get eased for those raw materials that we import, and then the tax we expect, the tax policy restricts the excess export of the raw materials that we think we can use locally for local industries,” Rubanda said.

He emphasised that agricultural outputs and some minerals must be prioritised for domestic use rather than excessive exportation.

“So those are the areas that we are engaging government on to ensure that the cost of production via the cost of raw material is minimised in the tax policy. The consultation is on, and we expect to be handing over the tax proposals in the next two weeks,” Rubanda added.

URA targets groupage container scam

On his part, Abel Kagumire, acting commissioner general of the Uganda Revenue Authority (URA), highlighted the authority’s recent interventions to resolve long-standing disputes affecting small traders, particularly around groupage container imports.

“We are grateful for the associations like Kampala City Traders Associations(KACITA) and the others that have allowed negotiations to happen because of the issue of groupage containers and container leaders,” Kagumire noted.

He explained how unscrupulous “container leaders” would ship goods in their names, then deny rightful owners access once the goods arrived in Uganda. “So when they reach here, he refuses, or she refuses, to turn them over to the person who bought the goods. Now they come to Uganda Revenue Authority to complain… We came in and said, No, this is too much. Let’s intervene.”

URA introduced measures requiring importers to provide Tax Identification Numbers (TINs) and personal details, which ensured direct clearance of their goods.

“We have had negotiations with KACITA, and we have extended the time period up to when the goods were shipped, up to June 30th. If you imported up to June 30th, we are clearing you, but after June 30th, we are not going to allow this bad practice to continue,” Kagumire stated.

He urged the media to help the authority shift public perception: “I think that is on the other tax administration side, why we are struggling to collect taxes. It’s not because of tax policies. Support us as media. As you report to the public, you report positively about the collection of taxes.”

Civil society demands performance-based incentives

Representing civil society, Civil Society Budget Advocacy Group (CSBAG) deputy executive director Carol Namagembe argued that tax policy should not only raise revenue but also deliver visible benefits to citizens.

“We believe that this should always go beyond raising revenue, but also how this revenue is mobilized,” she said.

“Every Ugandan, no matter the income status, desires affordable shelter, desires quality and affordable education, desires accessible and reliable quality health care. So if only, besides counting the numbers in revenue collection, we can still come back as a joint team and celebrate what this tax is delivering for us.”

Namagembe called on the Ministry of Finance to reform tax incentives and exemptions by introducing performance-based tax credits.

“Ideally, our incentives and tax exemptions must be tied to measurable outcomes. As such, no rewards, no results, no rewards,” she argued.

She further noted challenges faced by small and medium enterprises (SMEs), citing high compliance costs, burdensome procedures, and prohibitive digital tax systems like the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).

“CSBAG calls for simplified procedures and the elimination of unnecessary charges if possible, that can encourage formalization and business growth,” Namagembe said.

She also highlighted gaps in awareness. “A recent study… identified that over 82% of respondents were unaware of any tax incentives targeting women-led enterprises, yet government has put them in place. Probably, yes, we have done tax education and awareness, but there are certain sections within our society that we are not necessarily reaching,” she added.

Finance ministry defends streamlined reforms

During the briefing, finance ministry economic affairs director Kaggwa Moses outlined reforms designed to make Uganda’s tax system predictable, fair, and growth-oriented.

“The Government, through the Ministry of Finance, Planning and Economic Development, has undertaken significant steps to streamline the tax policy making process. This is important because an effective and predictable tax system is at the heart of financing our national priorities and supporting sustainable growth,” Kaggwa said.

He detailed how continuous reforms have closed loopholes, clarified ambiguities, and promoted voluntary compliance. “This gives businesses and taxpayers greater confidence in the tax system, encourages compliance and reduces opportunities for revenue leakage,” he said.

Kaggwa emphasised that Uganda’s tax policies are structured to balance revenue mobilization with economic growth.

“The tax policy and related tax measures are deliberately designed to promote, among other things, government’s strategy for growth and enabling SMEs, small and big, and encourage value addition in key sectors,” he added.

Outlining the multi-stage policy-making process—from strategic planning, stakeholder consultations, technical analysis, cabinet approval, legislation, and implementation—Kaggwa said this approach ensures tax measures are practical, fair, and aligned with the National Development Plan (NDP IV) and the Domestic Revenue Mobilisation Strategy.

“The balance between revenue mobilisation and economic growth objectives ensures that the private sector is facilitated to be competitive and continue to thrive as the engine of Uganda’s economic growth and transformation,” Kaggwa concluded.

Towards a balanced tax policy

CSBAG noted that as Uganda moves towards the FY 2026/2027 budget, the dialogue between government, private sector, civil society, and revenue administrators is vital to demonstrate a shared recognition, since taxation is not just about collecting money, but about creating a system that supports growth, fairness, and accountability.

However, while manufacturers demand relief to lower production costs, traders’ welcome relief from unfair practices.