The Ugandan government has announced that domestic investors and start-up businesses will enjoy a three-year income tax exemption.
The tax holiday will begin on July 1, 2025, marking the start of the new financial year.
As outlined in the Income Tax (Amendment) Bill 2025, presented by the State Minister of Finance (General Duties), Henry Musasizi, the exemption will apply to Ugandan businesses with investment capital not exceeding 500 million shillings (roughly 130,000 US dollars).
Minister Musasizi clarified that the tax holiday will benefit all registered businesses with capital under 500 million shillings.
He explained: “The goal is to support businesses in their early stages. We don’t want a new business to be immediately approached by the Uganda Revenue Authority (tax collectors) demanding taxes.”
Currently, the tax law does not offer a general exemption for start-ups, with companies typically facing a 30-percent corporate income tax rate unless they are in strategic industries or industrial parks.
Under the Investment Code (2019), domestic investors also include citizens of East African Community partner states.
