The 2026/2027 Tax Law Amendments Acts: A Stakeholder's Briefing

Background

The Tax Amendment Acts for the 2026/2027 financial year, recently passed by Parliament, have partially been assented to by the President of Uganda. The VAT Act, Tax Procedure Codes Act, Stamp Duty Act, Lotteries and Gaming Act and External Trade Act were assented to on 18 May 2026 and take effect on 1 July 2026. The Income Tax Act and Excise Duty Act were passed by Parliament but remain pending Presidential Assent.

These Acts introduce significant changes aimed at broadening the tax base, enhancing revenue mobilisation, and strengthening compliance across key sectors of the economy. The reforms notably target digital services, gaming, and high-income earners, while also revising certain tax incentives and administrative provisions. This briefing highlights the key amendments under the new tax laws and examines their implications for taxpayers, businesses, and organisations operating in Uganda.

Executive Summary

Income Tax Act, Cap 338

Key amendments include the introduction of withholding tax obligations on interest paid by resident companies to foreign financial institutions; commissions earned from telecommunication and mobile money services; winnings from gaming and betting activities; and payments made to public entertainers. The Amendment Act also provides targeted tax incentives — including exemptions for qualifying hotel or tourism facility developments — and revises the rates of income tax for individuals.

Value Added Tax Act, Cap 344

The VAT amendments exempt certain designated persons from VAT withholding where payment for taxable supplies is supported by an electronic invoice or electronic receipt (EFRIS). The Act also increases the VAT registration threshold from UGX 150 million to UGX 300 million in annual taxable turnover. New VAT exemptions are introduced on goods and services supplied to contractors and subcontractors engaged in nuclear energy projects.

Excise Duty Act, Cap 336

The Excise Duty (Amendment) Act, 2026 revises the excise duty regime through adjustments to the rates applicable to selected excisable goods under Schedule 2 — including gasoline, cement, spirits, plastics, and most notably, motorcycles on first registration.

Stamp Duty Act, Cap 339

Persons engaged in financial services must now file monthly stamp duty returns and taxpayers must retain documents subject to stamp duty for a minimum period of five years. Stamp duty payable on motor vehicle registration has also been revised.

Tax Procedures Code Act, Cap 343

Notable amendments include revisions to penalties relating to penal tax on tax stamps, electronic receipting, and electronic invoicing. The Amendment Act introduces a new tax amnesty framework providing for the waiver of interest and penalties on outstanding principal tax as at 30 June 2026 upon payment of the principal amount, as well as the waiver of tax liabilities outstanding as at 30 June 2016 — an opportunity for taxpayers to regularise their tax affairs.

Lotteries and Gaming Act, Cap 334

The Lotteries and Gaming (Amendment) Act, 2026 introduces a harmonised taxation framework for betting and gaming activities by setting the gaming tax rate at 30% of the total amount staked, net of payouts.

External Trade Act

A dual-track strategy is introduced — featuring tax exemptions for essential health and agricultural supplies to lower costs, while simultaneously imposing a 30% environmental levy on second-hand clothing.

Selected Highlights

• Software royalties. The definition of "royalty" in section 2 of the Income Tax Act is amended to include software. Payments for software usage, transfer of ownership or disposal of software within Uganda by residents, non-residents with local branches or PEs, or payments to non-residents for such use will now be classified as income sourced in Uganda and are taxable.
• Bujagali tax holiday extended. The income of the Bujagali hydropower project is now exempt up to 30 June 2032 (previously 30 June 2026) — to keep cost per kilowatt-hour low, prevent tariff hikes, and facilitate industrialisation.
• Hotel and tourism facility incentive. A new exemption applies to developers of hotel or tourism facilities with investment capital of at least USD 10 million (foreigner) or USD 5 million (citizen) who use at least 70% locally sourced raw materials and employ at least 70% citizens earning at least 70% of the total wage bill. Unlike other strategic exemptions, this one appears open-ended with no timeline limitation.
• Excise duty on sugar tripled. Cane or beet sugar and chemically pure sucrose in solid form now attract UGX 300 per kg.
• Cooking fat attracts new excise of UGX 500 per litre or kg.

What You Should Do Now

1. Reassess withholding tax exposure for software payments, interest to foreign FIs, mobile money commissions, gaming winnings, and public entertainer payments.
2. Review your VAT registration position against the new UGX 300 million threshold and evaluate EFRIS-based withholding exemptions.
3. Take advantage of the amnesty. If you have outstanding principal tax as at 30 June 2026, pay it to secure the waiver of interest and penalties — and review long-standing liabilities from 30 June 2016 for full waiver.
4. Operators in gaming and betting should model the impact of the harmonised 30% gross stake net-of-payouts tax on margins and pricing.
5. Importers and retailers of second-hand clothing should plan for the 30% environmental levy taking effect on 1 July 2026.
6. Developers in hotels, tourism, and nuclear energy should assess eligibility for the new exemptions and structure investments accordingly.

Download the full briefing PDF below for the complete table of amendments, current sections, the amending text, and our commentary on the significance of each change.

Prepared by TASLAF Advocates — Tax Practice. For tailored advice on how the 2026/2027 amendments affect your organisation, contact our team.