Uganda Waives Tax Penalties to Encourage Business Compliance

The Ministry of Finance, working through the Uganda Revenue Authority (URA), has rolled out a new tax relief initiative aimed at easing pressure on businesses and encouraging voluntary compliance.

Under the amended Tax Procedures Code Act, all taxpayers who clear their outstanding principal tax arrears (up to June 30, 2024) by June 30, 2026, will enjoy a 100% waiver on accumulated interest and penalties. This decision follows repeated appeals from businesses that missed out on earlier waivers.

Giving businesses room to recover

URA Commissioner General John Musinguzi said the waiver is designed to help companies recover from financial strain and reinvest in growth.

“This new extension will give businesses room to recover, relieve their burden, and leave them with more cash to reinvest,” he explained, adding that the measure is about building trust between taxpayers and government.

Terms of the waiver

• The waiver applies only to domestic tax obligations (not customs duties).
• Taxpayers who pay part of their principal will get a pro-rata waiver of interest and penalties.
• Interest accrued from July 1, 2024, until the date of payment is also covered.
• Missing returns must be filed for taxpayers to qualify.

Importantly, URA has stressed this will be the final amnesty, with no further extensions expected.

Business community welcomes relief

Many traders have welcomed the move. Denis Mugabi, a Kampala trader, said:

“This is a good opportunity worth taking up. I appeal to my colleagues to take it seriously.”
Another trader, Samuel Kakeeto from Kikuubo, noted:
“I like that it has come early in the financial year. It gives us time to plan.”

Looking ahead

With remittances and tax collections playing a critical role in Uganda’s economic recovery, the government hopes this relief will expand the tax base and strengthen compliance culture. URA has assured that once a taxpayer settles their principal, the waiver will be automatically applied to their TIN account.

Businesses are encouraged to log in to the URA portal or visit the nearest tax office to confirm their balances and take advantage of this two-year window.