The Ugandan Revenue Authority released the Tax Amendments for Fiscal Year 2026/27 document, which outlines key adopted changes for income tax, excise duty, VAT, tax procedures, stamp duty, lotteries and gaming, and external trade. The tax reform aims to make doing business easier, encourage investment, and strengthen tax administration. Moreover, the government is targeting revenue collection of UGX 44.18 trillion (approximately USD 12.05 billion) during the period.

Key Indirect Tax Changes

Under the latest tax amendments to the VAT Law, the annual registration threshold has been increased from UGX 150 million (approximately USD 40,750) to UGX 300 million (approximately USD 81,500). This measure was adopted as a means to reduce compliance costs for SMEs and improve their cash flow.

Furthermore, to encourage the use of the Electronic Fiscal Receipting and Invoicing System (EFRIS) and improve business cash flow, the government removed the 6% VAT withholding obligations for transactions where e-invoices or e-receipts are issued through the EFRIS. Additionally, non-taxable persons who buy goods or services from a taxable person can qualify for a 5% tax refund if they spend at least UGX 2 million within 30 days and obtain e-receipts. 

To account for inflation and discourage inaccurate VAT refund claims, the government changed the conditions under which a taxable person can receive interest on a VAT refund claim. Under the revised rule, if the Commissioner General's investigation finds that the amount of excess input tax credit claimed is overstated by 5% or more of the total refund claimed, no interest will be paid on the refund. Previously, interest was denied only when the overstatement was at least UGX 50,000, regardless of the overall size of the claim.

The adopted amendments set new excise duty rates for a wide range of products, including fuel, imported spirits, disposable plastic products, paints, varnishes, lacquers, and cooking fat. Also, new penalties for failing to use EFRIS devices or tampering with electronic fiscal devices have been set at double the tax due or 10 currency points, whichever is higher.

Conclusion

Amendments adopted by the Ugandan government and clarified by the Revenue Authority came into effect on July 1, 2026. The main focus of most VAT and excise duty changes is clear: encourage taxable persons to use EFRIS, improve business cash flow, and reduce compliance costs and administrative burdens for taxable persons, particularly SMEs.