Uganda 2024-2025 Budget Brief

Uganda
Budget Brief
2024/2025
kpmg.com/eastafrica
_________
June 2024
Economic highlights Budget highlights Income Tax Value Added Tax Excise Duty Tax Procedures Code Stamp Duty
Introduction
For the year 2024/2025, no major changes in tax rates have been proposed
for the financial year. According to the Minister of Finance, much of the
anticipated tax revenue will be generated from compliance measures
undertaken by the Uganda Revenue Authority (URA). These are:
⎯ Expanding URA presence and coverage by opening up 5 liaison

offices;
⎯ Strengthening the enforcement and use of Electronic Fiscal Receipting

and Invoicing System (EFRIS) and Digital Tax Stamps (DTS) and the
rental tax solution;
⎯ Strengthening the exchange of information with tax authorities in other

countries to combat illicit financial flows and under-declarations; and
⎯ Strengthening enforcement interventions.
The tax amendments for the year 2024/2025 affect the Income Tax Act (Cap
340), Value Added Tax Act (Cap 349), Excise Duty Act 2014, Stamp Duty
Act 2014, and the Tax Procedure Code Act, 2014.
The proposed amendments will come into effect on 01 July 2024 if the
President of Uganda assents to them in their current form.
We highlight below the major tax provisions for the financial year
2024/2025.
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Economic highlights
Economic performance
The theme of the budget for the financial year 2024/2025 is “Full iv. Agro-industrialisation and light manufacturing supported
Monetisation of Uganda’s Economy through Commercial by access to affordable credit through Uganda
Agriculture, Industrialisation, Expanding and Broadening Development Bank (UDB), investments supported
Services, Digital Transformation and Market Access”. through Uganda Development Corporation (UDC); the
Parish Development Model, Small Business Recovery
The economic growth for the current financial year is projected
Fund, Emyooga, the Presidential Industrial Hubs for
at 6% in real terms compared to 5.3% in the previous financial
year. Over the next five years, the economy is projected to grow Youth Entrepreneurs, and programmes to support
exporters as well as growth and productivity of women
at an average of 6.4% - 7.0% per year. This growth will arise
enterprises.
from:
v. Private investment growth supported by Foreign Direct
i. Increased oil and gas activities as we move towards first
Investment, remittances and a stable macroeconomic
oil production in FY2025/26.
environment.
ii. Growth in exports, supported by the increase in regional
vi. Continued investment in industrial parks, construction
trade in the EAC and COMESA, intra-Africa trade, and
harnessing existing and new trading partners in the and maintenance of roads and bridges; and
Middle East and Asia. vii. Rehabilitation of the Metre Gauge Railway and
commencement of the Standard Gauge Railway,
iii. Increase in tourism activities supported by investment in
expansion of ICT infrastructure, and provision of reliable
tourism infrastructure, branding and marketing, and
and affordable electricity.
effective implementation of the Meetings, Incentives,
Conferences and Events (MICE) Programme.
Economic highlights
Domestic revenue in financial year 2024/25, is estimated at Ushs
31.982 trillion; about 14.2 percent of Gross Domestic Product (GDP).
The government plans to collect Ushs 29.67 trillion as tax revenue in
the next financial year 2024/25. The projected domestic revenue
outturn for FY2023/24 is Shs 27.725 trillion against the target of Shs
29.672 trillion, leading to a revenue shortfall of over Shs 1.9 trillion.
As a result of the fiscal consolidation agenda which is intended to

enhance revenue collection, limit borrowing for only critical and
strategic investments, and control government expenditure.
Government’s fiscal deficit has reduced to 4.5 percent of GDP this
financial year from 5.5 percent of GDP last year.
Export revenue of goods and services was US$ 7.471 billion for the
calendar year ending April 2024 compared to US$ 4,938 for the year
ending April 2023. This increase was largely driven by increased
exports of gold (75.7 percent), coffee (21.9 percent), oil re-exports
(21.8 percent), sim-sim (20.2 percent), tobacco (10.3 percent), cotton
(6.9 percent), and light manufactured products (4.9 percent) which
were exported mainly to regional markets.
By the end of financial year (FY) 2024/25, Uganda’s GDP is projected

to grow up to Ushs. 225.5 trillion (equivalent to US$ 60 billion. This in
turn is projected to grow our GDP per capita to US$ 1,146, up from
US$ 1,081 in FY 2022/23.
Macro-Economic indicators
Inflation
Uganda has contained inflation. At an average rate of 3.2% in the

twelve (12) months to May 2024, Uganda’s inflation is one of the
lowest in the region. Annual headline inflation has reduced from
the peak of 10.7% in October 2022 to 3.6% last month. The
reduction has been a result of good coordination of monetary and
fiscal policies, leading to low inflation for most food crops,
manufactured foods, and essential commodities like laundry bar
soap, sugar and cooking oil.
Interest rate
The commercial bank lending interest rates for shilling-

denominated credit reduced to 17.7% in April 2024 compared to
19.3% in April 2023. Interest rates in the domestic debt market
have remained broadly stable averaging 11.2% on the one-year
Government Treasury Bills.
To further reduce lending rates, Government will continue to

provide long-term affordable capital through various
interventions. In particular, Government will continue to capitalise
the Uganda Development Bank, the Parish Development Model,
the Agricultural Credit Facility, and the Small Business Recovery
Fund to provide capital for wealth creation.
Economic highlights
Private sector credit Exchange rate
Private sector credit increased to Shs 21.54 trillion Despite the depreciation pressure on the shilling
in April 2024 from Shs 20.47 trillion in April 2023, an since the beginning of this year, the value of our
increase of 5.2%. There has also been a slight currency has remained largely stable against key
increase in the share of credit going to productive global currencies. Between May 2023 and May
areas of the economy. For example, the share of 2024, the official exchange rate against the US
credit going to agriculture increased slightly to dollar has averaged Shs 3,771. The depreciation
11.3% by April 2024 compared to 11.1% by April pressure, on the account of exit of some of the
2023, while the share of credit to manufacturing offshore investors searching for more attractive
remained the same at 13.4%. interest rates offered on government papers in
competing markets, has been contained due to the
good export performance and Foreign Direct
Investment (FDI) inflows
Budget highlights
The Budget for FY 2024/25 is the fifth, and therefore the last to
implement the Third National Development Plan (NDPIII). It will
also set the foundation for implementing the Government’s
strategy for expanding the size of our GDP from about USD 50
billion in FY2022/23 to USD 500 billion by the year 2040.
The budget for next financial year is aimed at achieving the

following broad objective to expand the size of the economy
from about USD 50 billion last year to USD 500 billion by 2040.
This objective is premised on the four anchor sectors
abbreviated as (ATMS);
▪ Agro-Industrialisation;
▪ Tourism Development;
▪ Mineral Development, including oil & gas,;
▪ Science Technology and Innovation (STI), including ICT.
Budget highlights
Achieving this to achieve this ambitious goal in the next 15 The key success factors for the strategy are the following:
years involves doing the following;
▪ Enhancing the capacity for effective national defence and security to
▪ Doubling the size of GDP every 5 years for the remaining avert any internal or external security risks.
three National Development Plans; ▪ Maintaining constitutional order, an effective and efficient Judiciary,
▪ Raising per capita GDP six-fold from the current USD and a people-centred Legislature.
1,146 to about USD 7,000 in FY 2039/40; ▪ Economic stability in line with commitments contained in the Charter
▪ Doubling the level of savings in the economy from 20 for Fiscal Responsibility.
percent of GDP to 40 percent of GDP in 2040; ▪ A reformed Government-wide coordination of rationalised Ministries,
▪ Raising the share of exports in GDP from 12 percent in Departments, Agencies, and Local Governments.
2022 to 50 percent, and the share of manufactured ▪ Effective and accountable public institutions prepared to fight
products in merchandise exports from 13 percent to 50 corruption and impunity.
percent; and medium high-tech products from 21 percent ▪ Policy consistency to ensure effective implementation of
to 50 percent over the same period; Government programmes and interventions.
▪ Increasing the annual FDI inflows from USD 2.9 billion in ▪ Enforcement of local content in Government programmes and
2022 to USD 50 billion by 2040; and investments, and support to culture and the creative industry.
▪ Accumulating the stock and quality of human capital ▪ Digitisation and automation including e-payments, e-commerce, e-
(skilled workers); physical capital (energy, railway, roads, Government procurement, e-health, e-education, etc.
air travel and internet infrastructure); and natural capital ▪ Support and take advantage of the full implementation of the EAC
(forests, swamps, rivers and lakes). Common Market and economic integration under the African
Continental Free Trade Area.
Budget highlights
The key priorities for the FY 2024/2025 Budget are the following:
i. Investing in the people of Uganda through education, health and

water, sanitation and hygiene.
ii. Peace and security of all persons in Uganda.
iii. Maintenance of all roads, construction of a few strategic roads, as
well as rehabilitation of the Metre Gauge Railway and construction
of the Standard Gauge Railway.
iv. Investing in wealth creation initiatives, including commercial
agriculture, value addition (UDB and UDC), the Parish
Development Model (PDM), Emyooga, Agriculture Credit Facility,
tourism, science-based research, and youth skilling, export
promotion programme, and the GROW Project.
v. To facilitate electricity transmission, distribution and utilisation of
existing energy stock.
vi. Natural disasters (Contingency Funding) and
vii. International commitments for regional and global partnerships.
Budget highlights
Resource envelope
The resource envelope for the financial year 2024/2025 is Ushs 72.1 trillion comprised of both domestic and external sources as
detailed below;
FY 2024/25
Budget allocation (Ushs, billions) Percentage
Domestic revenues 31,982 44.3%
Domestic borrowing 8,968 12.4%
Budget support 1,394 1.9%
External financing 9,583 13.3%
Treasury bonds for settlement 7,779 10.8%
Domestic debt refinancing 12,022 16.7%
Petroleum Fund drawdown 115.4 0.2%
Local Government revenue collections 293.9 0.4%
Total 72,137 100%
Budget highlights
Expenditure (Outflows)
The total expenditure for the FY 2024/25 is Ushs 72.1 trillion and is allocated as follows;
FY 2024/25
Budget allocation (Ushs, billions) Percentage
Project support (External financing) 9,584 13.3%
Domestic Refinancing 12,022 16.7%
External Debt repayments 3,149 4.4%
Interest payments 9,064 12.6%
Appropriation in aid 294 0.4%
Domestic arrears 200 0.3%
Domestic debt payment 9,100 12.6%
BOU Discretionary resources 28,724 39.8%
TOTAL BUDGET 72,137 100%
Key highlights and action plans on

priority areas
1. Investing in the people of Uganda through education, health and water, sanitation and hygiene
Health
To further enhance the health of Ugandans, a total of Shs 2.946 trillion has been provided next financial year, 2024/25. The following
interventions will be prioritised:
▪ Promotion and implementation of interventions for the ▪ Digitisation of the national health system to facilitate
disease prevention and health education initiatives against service delivery and tracking of medical supplies and
communicable, non-communicable and neglected tropical health workers’ performance.
diseases and injuries;
▪ Construction, rehabilitation and equipping of
▪ Provision of essential medicines where an additional Shs dilapidated hospitals across the country including in
100 billion has been provided; the Kampala Metropolitan Area.
▪ Improvement of the welfare of the health workers including ▪ Strengthening of the network of medical reference
medical interns and doctors designated as senior house laboratories including the establishment of the East
officers. I have provided more wage allocations to facilitate African Community Regional Centre of Excellence
the recruitment of staff for the upgraded HC IIIs; for Virology at the Uganda Virus Research Institute,
and the National Public Health Institute in Uganda.
▪ Construction and rehabilitation of more health infrastructure
and provision of medical equipment to improve quality of ▪ Establishment of a Pharmaceutical Industrial Park;
care and provision of specialised healthcare. These include, and strengthening the National Drug Authority
among others: the Uganda Cancer Institute and Regional Regulatory Framework.
Cancer Centres; the Uganda Heart Institute, Intensive Care
Units and an imaging centre for referral hospitals.
Key highlights and action plans on priority

areas
Education
The Minister provided Shs 2.497 trillion to further improve the

quality of education, and the following are among the priorities:
▪ Supporting the new curriculum for S1-S4 students;

▪ Operationalisation of all the 111 seed secondary schools and
completing the 27 seed secondary schools under the UGIFT
Programme;
▪ Commencing the construction of 60 secondary schools and
expansion of 61 existing secondary schools under the
Uganda Secondary Education Expansion Project;
▪ Providing loans to 5,192 degree and 1,125 diploma students
who are on the Government-funded loan scheme, both
continuing students and new beneficiaries; and
▪ Government take-over of Bunyoro and Busoga Universities
for inclusive and equitable access to university education.

priority areas
Social protection
▪ Government will continue to support

the welfare of the elderly to keep
them healthy and productive to their
communities.
▪ Government will also continue to
support the youth and women
beneficiary groups using the
recovered funds from the Youth
Livelihood Programme (YLP) and the
Uganda Women’s Enterprise
Programme (UWEP).
The Minister provided an additional Shs
355.79 billion for social protection next
financial year.

priority areas
Water, sanitation and environmental protection
In FY2024/25, clean water coverage will increase to 70 percent and 85 To support the restoration of our environment
percent in rural and urban areas, respectively. In the rural areas, the target and reverse the effects of climate change,
is to reduce the distance to the nearest source of clean and safe water for Government shall undertake the restoration of
human and animal consumption to less than one kilometre while in urban 42,450 hectares of degraded wetlands.
areas to less than 500 metres. The following are among the priorities we
have budgeted for next financial year:
▪ Construction of 52 large solar-powered water supply systems Government shall demarcate a 750-kilometre
in 19 districts that are currently at less than 50 percent water boundary with concrete pillars along the
coverage. following wetlands.
▪ Construction of another 15 solar-powered water supply
systems in the Rural Growth Centres
A total of 15 million seedlings of assorted tree
▪ Completion of the construction of 31 town water supply species shall be procured and distributed to
systems and sanitation facilities individual farmers in several districts, as well as
to refugee-hosting communities in the Albertine
▪ Construction of 17 rural water supply systems in the refugee- region and in West Nile, as well as individual
hosting districts farmers.
▪ Progress the construction of 26 water supply systems at The Minister provided Shs 516.78 billion next
various stages in financial year for climate change mitigation,
natural resources, environment and water
▪ Increasing the water for production storage capacity for resources management.
commercial farmers from 52.6 million cubic metres to 76.8
million cubic metres.

priority areas
2. Increasing effectiveness of wealth creation initiatives
The parish development model
Government will deepen the use of WENDI and other Emyooga

digital technologies and innovations to enhance
financial inclusion and drive efficiency, accessibility, and 607,636 individuals across the country have
effectiveness of the programme benefitted from the Emyooga funds, and Shs 80.28
billion has been recovered from the first-round
Government will also ensure effective implementation beneficiaries and it is being advanced to others.
of Pillar One which includes input certification, provision
of extension services, storage, value addition, and
market linkages. An additional Shs 100 billion has been provided
Shs 1.059 trillion has been provided next financial year under Emyooga to support more Ugandans to
for an additional Shs 100 million per parish to benefit create wealth and boost their incomes.
more households. Government will also ensure
effective implementation of Pillar One which includes
input certification, provision of extension services,
storage, value addition, and market linkages.

priority areas
Agricultural credit facility (ACF) Capitalisation of UDB
Government has invested Shs 303 billion, During FY2024/25, the Bank will continue to
causing a cumulative loan disbursement of provide capital to businesses involved in value
Shs 860 billion. This money has enabled a addition, including promotion of innovation in
total of 3,868 agricultural projects to the areas of science and technology. It will also
access patient capital for commercial on- support youth-led enterprises, manufacturers,
farm investment, post-harvest and also provide working capital to exporters
management, agro-processing, and trade and those involved in import substitution. Green
in agricultural produce. Next financial year, financing is also going to be enhanced to
Government will continue to capitalise the ensure climate adaptation and mitigation. To
ACF with an additional Shs 30 billion. achieve this, Government is going to further
capitalise UDB with another Shs 55 billion.
Government is also in the process of acquiring
for UDB credit lines worth Shs 1.083 trillion to
lend more to wealth creators.

priority areas
Support to SMEs Invite and grow programmes
At a disbursement of Shs 18.4 billion so

far, supporting 1,459 businesses, uptake of
this fund has been low. Government and Government is also implementing two
Bank of Uganda are going to relax the programs namely; the Generating Growth
requirements to ensure increased uptake Opportunities and Productivity for Women
of the SBRF to support SME growth. At a Enterprises (GROW) worth USD 217 million
disbursement of Shs 18.4 billion so far, (Shs 824 billion); and the “Investment for
supporting 1,459 businesses, uptake of Industrial Transformation and Employment
this fund has been low. Government and (INVITE)” worth USD 210 million (Shs 800
Bank of Uganda are going to relax the billion). These funds are intended to support
requirements to ensure increased uptake women-owned enterprises and value addition
of the SBRF to support SME growth. for exports.

priority areas
Agro - industrialisation
In the FY 2024/25 Budget, the Minister allocated a total of Shs 1.878 trillion towards
deepening agro-industrialisation with increased focus on commercialisation and value
addition in agriculture. The priority areas include;
i) More investment in research and genetic development of selected value chains for
animal, fish and crop varieties;
ii) Support for pest, vector and disease control and prevention.
iii) De-risking agriculture through supporting increased production and productivity as
well as value addition for all the priority value chains;
iv) More support for agricultural mechanisation;
v) Increased investment in small and large irrigations systems, particularly solar-
powered irrigation;
vi) Support for seed multiplication through the Uganda Prisons to increase seed
availability for PDM beneficiaries; and
vii) Additional credit support to large-scale commercial farmers to ensure food security
and increased exports.

priority areas
3. Tourism development
Tourism has a high return on investment. In FY2024/25, the Minister provided An additional Shs 1.629 trillion has been provided for
Shs 289.6 billion to the tourism development programmes to undertake the several critical interventions associated with tourism
following: including support to Uganda Wildlife Authority, construction
▪ Support international and domestic tourism marketing and promotion of tourism roads, road rehabilitation and upgrade under
activities; Kampala Capital City Authority, support to AFCON‘27 and
completion of key stadia, strengthening security, law and
▪ Modernise our tourism products to make them more competitive. These order in our tourism destinations, and extension of the
include completion of the pier and related infrastructure at the Source of internet to tourism destinations, among others.
the Nile; upgrading the Uganda Museum; construction of 8,000 metres of
climbing ladders and boardwalks on the Rwenzori Mountains to make
The Minister provided an additional Shs 55 billion to
hiking safer;
Uganda’s Missions Abroad to support the Uganda Tourism
▪ Continue with the grading, supervision and classification of tourism Board (UTB) to market Uganda to potential tourists, market
facilities to enhance the quality of services and ensure adherence to the our exports and attract more investors
required global standards;
▪ Complete the upgrade of the Uganda Hotel and Tourism Training Institute
infrastructure in an effort to make it an International Centre of Excellence
for training and skills development in tourism and hospitality; and
▪ Enhance the conservation of Uganda’s 22 Wildlife Protected Areas with a
focus on the mitigation of human wildlife conflicts. Government is going to
construct an additional 150 kms of electric fence and maintain the
existing 106-km fence; carry out boundary surveillance through more
than 13,904 patrols; uproot invasive species and construct four (4) water
dams in protected areas.

priority areas
4. Science, technology and innovation
Government has earmarked Science, Technology, and Innovation The Pathogen Economy
(STI) as a key catalyst for the qualitative leap to achieve tenfold The pathogen economy has made tremendous progress in developing
growth of our economy. This financial year, building on investments vaccines, therapeutics, diagnostics and other healthcare tools for our public
made in recent years, the following are the key achievements health security and import substitution.
attained
Other Government support under the pathogen economy has been directed
Kiira Motors Corporation (KMC) towards the following special initiatives:
Government has supported Kiira Motors to construct and equip a i) Dei Biopharma Ltd is establishing Africa’s largest pharmaceutical and
magnificent 2,500 vehicles per year manufacturing plant in Jinja vaccine manufacturing facility here in Uganda. Government is in the
Industrial Park. process of finalising equity acquisition in exchange for its Shs 723
billion investment.
The Government is going to support Kiira Motors with Shs 32.5 billion
to complete the plant and access working capital. ii) The anti-tick vaccine project at Makerere University, spearheaded by
Dr. Margaret Saimo-Kahwa, has undergone clinical trials. The Minister
Presidential Initiative on Banana Industrial Development (PIBID) has provided an additional Shs 25 billion to produce and commercialise
the anti-tick vaccines.
Government has supported PIBID to establish semi-automated plant
in Bushenyi with a daily processing capacity of 14 metric tons of fresh iii) Government has also supported Jena Herbals of Prof Patrick Ogwang
matooke. This project has shown potential for import substitution by (known for COVIDEX) to undertake clinical trials of his natural
replacing wheat, and also by providing gluten-free starch products. therapeutics and establish an internationally certified production facility
to manufacture and commercialise them. The Minister has provided an
Government has provided an additional Shs 50 billion to complete the additional Shs 2.07 billion for this purpose next financial year.
capitalisation of the company to transition into a self-sustaining
iv) Support to Prof Jennifer Serwanga Sempala to advance her research in
business. human vaccines. The Minister provided an additional Shs 25.24 billion
needed to complete the research and start producing the vaccine.

priority areas
Coffee Value Chain Development Space Programme
Government will support the completion and expansion of Government has supported rapid human capital development of the
these facilities, their operationalisation and market Aerospace Programme by training our engineers in Japan, China and
penetration of the products on the local, regional and Egypt. Government has partially refurbished the headquarters of the
international markets. The target is to aggregate, add Space Programme, the Mpoma Satellite Earth Station to enhance
value and market at least 1 million bags of medium-to-high weather prediction, and monitoring of landslides and the environment.
quality green coffee beans by 2025. This will earn Uganda
USD 560 million from value added coffee in the next five Government will support completion of the initiatives including the
years, which would catalyse the whole sector to bring in at establishment of a satellite development laboratory and a modern
least USD 5 billion in line with our tenfold growth strategy. Geospatial Centre to be able to obtain data from a broad spectrum of
Shs 75 billion has been provided next financial year to satellites from partner nations. The Minister has provided Shs 3.3
improve coffee value chain development. billion for Space Programme activities next financial year.

priority areas
5. Mineral development
The Minister has allocated Shs 41.55 billion to undertake

the following interventions for further mineral
development:
▪ Fast-tracking quantification and market studies for all
minerals for the purpose of investor promotion;
▪ Operationalising the National Mining Company;
▪ Further reviewing and strengthening the fiscal regime
for minerals, including regulation of artisanal and
small-scale miners;
▪ Developing the e-government mineral production
system and data bank for mineral statistics;
▪ Commencing construction of the Busia and Moroto
beneficiation centres; and strengthening the
Ntungamo and Fort Portal centres; and
▪ Facilitating private sector participation in exploration,
mining and value addition to minerals.

priority areas
6. Oil and gas
Next financial year the Minister has provided Shs

920.86 billion for the oil and gas sector to prioritise
the following:
▪ Development of the East African Crude Oil
Pipeline (EACOP) hub in Tanga;
▪ Continued construction of the EACOP
including the necessary infrastructure to
facilitate adherence to high quality
environmental standards;
▪ Procurement and dissemination of the 57,000
Liquefied Petroleum Gas (LPG) cylinders to
promote clean cooking; and
▪ Establishment of the Petroleum Geoscience
Laboratory; and
▪ Equity contribution for the Refinery Project.

priority areas
7. Integrated transport infrastructure and services ▪ Rehabilitation of over 10,000 km of national and
community access roads in various parts of the country.
During the FY 2024/2, more focus will be put on maintenance of the roads ▪ Commencing the reconstruction works for Masaka-
we have built, building of a few new strategic roads, accelerated Kyotera-Mutukula Road (89.5 km) and Rehabilitation of
rehabilitation of the Metre Gauge Railway, and commencement of Nyendo-Villa Maria Road (11 km) and access roads (7
construction of the Standard Gauge Railway. The Minister provided a total km).
of Shs. 4.989 trillion for that purpose. In particular, the following transport
▪ Continuing with the ongoing construction of up to 30
infrastructures will be undertaken:
bridges and structures on the national roads.
Roads and Bridges
▪ Tarmacking of an additional 306 km of roads under the ongoing
Development of Water Ferries
projects;
The construction of two (2) Lake Bunyonyi Ferries is currently
▪ Completion of the upgrading of 210 km of roads
underway, and will be completed next financial year.
▪ Commencing the upgrading/construction of 643 km of roads projects.
▪ Upgrading to bitumen standard (tarmac) 16.9 km of roads in the
Air Transport
Greater Kampala Metropolitan Area (GKMA), and Gomba District;
Shs 162 billion has been provided for completion and
▪ Completing the construction of 20.2 km of Kayunga-Nabuganyi Road;
operationalisation of Kabalega International Airport in Hoima;
▪ Completing the construction of Kakiri-Masulita-Mawale Road (23 km); and plans are underway to acquire at least two (2) mid-range
aircraft and 2 cargo aircraft to facilitate exports in the medium
term.

priority areas
8. Information and communications technology (ICT)
Next financial year, the Minister has provided over Shs 246
billion to continue developing the ICT and digital
transformation through the following interventions:
▪ Further expansion of internet connectivity and digital
infrastructure across the country;
▪ Continuing the rollout of digital services across
Government to improve efficiency of service delivery,
transparency and accountability
▪ Leveraging Business Process Outsourcing (BPO) and
ICT to create employment opportunities for the young
people;
▪ Digital skilling to increase adoption of the digital
services; and
▪ Cyber security, data protection and privacy.

priority areas
9. Energy development
The country’s power generation capacity has increased by 600MW from

1,378.7MW to 1,978.1MW following the connection of Karuma Hydropower
Dam to the national grid. The electricity transmission capacity has now
increased to 4,218 km of high voltage from 3,500 km in 2020.
The Minister has provided Shs 982.56 billion to undertake the following:
▪ Increased access to electricity through grid expansion and
connectivity projects;
▪ More investment in the construction of transmission and
distribution networks targeting load centres to promote value
addition;
▪ Improving the quality of power supply through the systematic
operation and maintenance of existing power infrastructure;
▪ Increasing access to clean energy by supporting clean cooking
technologies;
▪ Development of five (5) micro-grid power plants using wind and
solar hybrids in Karamoja; and
▪ Preparatory activities for the 8,400MW Nuclear Power Plant in
Buyende District.

priority areas
10. Industrial development and manufacturing
Government is continuing to develop industrial parks to provide

investors with the required infrastructure and utilities. Work is
progressing in the Namanve Park (with 190 companies
operating); Liao Shen Park in Kapeeka (19 companies); Sino-
Uganda Industrial Park in Mbale (18 companies); Luzira Park
(11 companies); Bweyogerere Park (8 companies); and MMP in
Buikwe (6 companies).
Other operational industrial parks include: Jinja, Soroti, Kasese,

Mbarara, and Tian Tang-Mukono Industrial Parks. So far, over
USD 3.5 billion have been invested in these parks in the form of
Foreign Direct Investment. Over 266,812 direct and indirect jobs
have so far been created.

priority areas
11. Security, good governance and rule of law
Next financial year, the Minsiter provided a total of Shs 9.588 trillion, of which Shs 481.4 billion is for the administration of
justice to ensure that Uganda remains a peaceful and accountable country with law-abiding citizens. Some of the priorities
in these programmes include:
Security of the Person and Property
▪ Strengthening the capacity of security agencies to address emerging security threats, and ensuring combat readiness
of security agencies to protect life and property;
▪ Enhancing military capability through acquisition of various assets, and strengthening the surveillance infrastructure;
▪ Supporting joint military operations in the region;
▪ Building effective crime response systems targeting sophisticated crimes such as terrorism, other transnational
crimes, arms proliferation, illegal entry into the country, money laundering, cybercrime, espionage, smuggling of
contraband, human trafficking, and others;
▪ Supporting the civil authorities in combating threats as well as managing the refugees in line with our Refugee Policy;
and
▪ Improving the welfare of the military, police, prisons, ISO and ESO personnel through salary enhancement.

priority areas
Justice, Law and Order ▪ Starting construction of Regional
Courts of Appeal in Mbarara and Gulu;
▪ Strengthening justice, law and order service High Courts in Hoima and Mpigi; Chief
delivery systems by: Magistrate Courts in Amolatar, Bubulo,
Rakai and Katine; and Magistrate
▪ Recruiting 10 more High Court Judges in Grade One Courts in Busembatia,
Commercial and Land Divisions to enhance Nyarushanje, Rubuguri and Adwari;
adjudication of commercial and land cases to
eliminate backlog; ▪ Promoting the use of scientific
evidence in investigation and
▪ Recruiting 5 more Justices of Court of prosecution of cases, including
Appeal in line with the Judicature construction of the National DNA
(Amendment Act), 2024; Databank at the Government Analytical
Laboratories at Wandegeya;
▪ More investment in court automation to
cover an additional 10 Courts to enhance ▪ Mass enrolment for and renewal of
efficiency, reduce human contact and by National IDs, and automation of
extension reduce incidents of corruption; immigration and business registration
services;
▪ Promotion of the Alternative Dispute
Resolution (ADR) Mechanism to ▪ Reforming laws and the due process to
complement the formal adjudication of ensure faster and expeditious
cases; resolution of disputes, among others.

priority areas
12. Natural disaster response and management
During FY2023/24, Government supported 53,930

households with relief food and non-food items such across
the country. Next financial year, the Minister has provided
Shs 18.1 billion plus a Contingency Fund of Shs 146.26
billion to support disaster response and management,
including:
▪ Operationalisation of the National Disaster Risk
Management Plan;
▪ Support 50,000 households with food and non-food
items across the country;
▪ Provision of funds to Uganda Red Cross Society to
support disaster victims;
▪ Supporting the resettlement of 1,000 households that
were displaced by landslides and floods in the Elgon
Region including the districts of Bududa, Manafwa,
Bulambuli, Namisindwa and Sironko.
Income Tax (Amendment) Act, 2024

Income Tax
1. Expansion of the definition of a Retirement fund
The definition of a retirement fund has been expanded to

include the provision of benefits for members of the fund in
the event of termination of service or upon the occurrence
of an event specified in the written law, agreement, or
arrangement.
Currently, a retirement fund is a pension or provident fund

maintained for the provision of benefits for members of the
fund in the event of retirement or in case of death.
This amendment is intended to align the definition of a

retirement fund in the Income Tax Act with that in the
Uganda Retirements Benefits Regulatory Authority Act to
include, accessing benefits by members upon the
termination of employment with their respective employers.
Upon the passing of this amendment, the contributions by

an employer to a retirement fund in the event of termination
of service or upon the occurrence of a specified event will
not be included in employment income, therefore not taxed.

Income Tax
2. Exemption of certain Incomes
The Act seeks to exempt:
a. Income derived from or by private equity or venture capital

fund regulated by Capital Markets Authority.
b. Income derived from the disposal of government securities on

the secondary market.
c. Income earned by investors from manufacturing an electric

vehicle, electric battery, or electric vehicle, charging
equipment or fabricates the frame and body of an electric
vehicle is exempt upon fulfilling the set conditions of capital
investment, use of local content, and local raw materials.
d. Income from operating a specialized hospital facility is

exempt upon fulfilling the set conditions. These are: capital
investment requirements, use of local content, and use of
local raw materials.
This amendment is intended to attract investment into the Country.
Upon the coming into force of the Amendment, the income

indicated above will be exempt from Income Tax.

Income Tax
3. Introduction of the Concept of a Permanent Establishment (PE)
The Amendment seeks to replace a Branch with the concept of h. a farm, plantation, or other place where agricultural, forestry
Permanent Establishment for income tax purposes. This is in order plantation or related activities are carried on;
to align the definition of a branch to the definition of a branch per
the United Nations Model Double Taxation Convention between i. a sales outlet;
Developed and Developing Countries, 2017 and Uganda Taxation
Agreements. j. a building site or a construction, installation or assembly
project, or supervisory activities in connection with the site,
A permanent establishment is defined to mean a fixed place of project or activity that lasts for at least 90 days in any 12
business through which the business of the enterprise is wholly or months period;
partly carried on and includes:
k. the furnishing of services, including consultancy services, by
a. a place of management; a person through employees or other personnel engaged by
the person for such purposes provided that such activities
b. a branch; continue in Uganda for a period of, or periods amounting in
aggregate to, 183 days or more in any 12-month period that
c. an office; commences or ends during the year of income; or
d. a factory; l. substantial equipment or machinery that is operated, or is

available for operation, in Uganda for a period of, or periods
e. workshop; amounting in aggregate to, 90 days or more in any 12-month
period that commences or ends during the year of income.
f. a warehouse, in relation to a person providing storage
facilities to others; The Amendment further indicates activities that do not lead to
creation of a PE. These include the use of facilities solely for the
g. a mine, an oil or gas well, a quarry or any other place of
purpose of storage or display of goods or merchandise belonging
exploration for or extraction or exploitation of natural
to the person, among others.
resources;

Income Tax
4. Taxation of Income of a PE
According to the amendment, income of a non-resident person A PE shall be a distinct and separate entity from the head office
attributable to activities of a permanent establishment shall be and the transactions between the PE and the head office are
taxed in Uganda. subject to Transfer Pricing Regulations.
A PE shall not be allowed a deduction in respect of amounts paid Therefore, where a person creates a PE in Uganda, that person will
by the PE to the head office of the non- resident person or any of be required to register for tax and declare the income earned from
its other offices by way of, royalties, fees or other similar payments Uganda and pay the corresponding income tax at the rate of 30%
in return for the use of patents or other rights; commission, for in case of a Company.
specific services performed or for management; or interest on
moneys lent to the PE, except, in case of financial institution. The PE will also be required to determine whether income was
repatriated for each year of income and pay tax on the repatriated
income at the rate of 15%.

Income Tax
5. Sourcing of Income from Uganda
The Amendment expands the circumstances under which a

non-resident is construed to have sourced specified income
from Uganda.
According to the Amendment, income is derived from sources

in Uganda to the extent to which:
a. It is a pension or an annuity where the annuity is paid by a

non-resident person as expenditure of a business carried
on by the non-resident person through a PE in Uganda;
b. It is derived from the payment of insurance premium if the

premium relates to the insurance or reinsurance of a risk
in Uganda.
Where a non- resident receives the income indicated above,

that income will be sourced in Uganda and that person will be
required to pay tax in Uganda unless there exists a Double Tax
Treaty that exempts the payment of that tax in Uganda.

Income Tax
6. Withholding tax on commissions paid to a 7. Expansion of Listed Institutions

Banking Agent / Agent offering financial services
The Amendment seeks to impose withholding tax at the rate of 10% The list of listed institutions has been expanded to include:
on a payment of commissions to a banking agent or any other agent
a. African Reinsurance Corporation (Africa Re);
offering financial services.
b. International Regulatory Board of the East African Power
This is intended to bring commissions paid within the banking sector
Pool; and
within the scope of the withholding tax mechanism.
c. Islamic Cooperation for the Development of the Private
Previously only commissions paid to Insurance and mobile money
Sector.
agents were subject to WHT.
This implies that the income earned by those persons will be
Upon the coming into force of this law, Banks/persons will be
exempt from income tax in Uganda.
required to withhold tax (WHT) at a rate of 10% on commission
payments to a banking agent or any other agent offering financial The Amendment is intended to incentivise the development of
services. the insurance and reinsurance industry in Africa; promote
investment in the power sector and facilitate smooth cross
The 10% withholding tax is not final and can be used as a credit to
border energy initiatives within the East African Region; and to
offset the service provider’s tax liability for the year.
fulfil the Government’s commitment to promotion of Islamic
finance and encouraging increased financing towards private
sector projects
B Value Added Tax (Amendment) Act, 2024

1. Recipient of the proceeds liable to pay tax on the goods sold through
Auction
The Act has been amended to provide that goods.
in the case of supply of goods through
auction, VAT is to be paid by the recipient Furthermore, the amendment is intended
of the proceeds of the auction. to clarify that where a debtor’s property is
disposed of through a sale, then the
Furthermore, the Act provides that the supply is treated as to be made by the
supply of goods through auction by an debtor and not the auctioneer or the
auctioneer in the course of auctioning creditor.
goods is treated as a supply of goods by
the recipient of the proceeds of the Upon the coming into force of this law, the
auction. recipient of the proceeds of the sale will be
required to remit the VAT to the Tax
Currently, the supply of goods by auction Authority.
is treated as a supply of goods made by
the auctioneer. The auctioneer, or the creditor will not be
required to remit the VAT or offset any
This amendment is intended to clarify that input tax credit incurred against the VAT
the recipient of the proceeds of the imposed on the sale of the goods through
auctioned goods is responsible for auction.
accounting for VAT on the sale of those
Value Added Tax (Amendment) Act, 2024

2. Employer to remit VAT on supply of services or
goods to employees
The supply of goods or services by an employer who is a

taxable person to an employee, for no consideration shall be
regarded as the supply of goods or services for consideration
as part of the person’s business activities.
This Amendment is intended to ensure that the tax authority

recovers VAT on the goods and services supplied by the
employer to his or her employee for free since the employer
would have claimed VAT on them when acquiring them or
producing them.
We however note that currently, those supplies are treated as

supplies for own use and the taxable person is required to pay
VAT on them.

3. Increase of the threshold to 4. Change in the list of Public
apply for a cash refund of VAT International Organisations
credit
According to the Act, where the input tax The First Schedule to the Act has been
credit is below UGX 10M, that amount shall amended to include African Reinsurance
be offset against future tax liability of the Corporation (Africa Re); International
taxable person. Where the input tax credit Regulatory Board of the East African Power
is UGX 10M and above, the taxable person Pool; Islamic Cooperation for the
may apply for his or her tax credit to be Development of the Private Sector Company
refunded in cash. Currently the threshold as a public International Organisations.
for claiming VAT credit is UGX 5M.
This means that these institutions may be
According to the Report of the refunded the value added tax borne or paid
Parliamentary Committee on Finance, by them relating to transactions concluded
Planning and Economic Development on for their official purposes.
VAT Amendment Bill, this amendment is
intended to reduce the number of taxpayers
claiming tax refunds.

5. Removal of certain goods from the Exempt supplies
schedule
The Second Schedule to the Act has been amended to exclude:
a. Postage stamps.
b. Supply of software and equipment installation services to manufacturers.
The above will not be exempt from VAT and as such,, suppliers of those items will be
required to register and account for VAT on them if they meet the turnover threshold.

6. Inclusion of certain goods and services as
Exempt supplies
The Second Schedule to the Act has been amended to include:
a. the supply of an electric vehicle locally manufactured or

supply of frame and body of an electric vehicle locally
fabricated.
b. the supply of electric vehicle charging equipment or the

supply of charging services of an electric vehicle.
c. the supply of cooking stoves, that use fuel ethanol,

assembled in Uganda, up to 30 June, 2028.
Persons supplying those goods or services will not be required

to charge VAT on them or claim VAT incurred in providing those
goods and services.
C Excise Duty (Amendment) Act, 2024

The Act proposes to amend Schedule 2 of the Excise Duty Act, 2014 to substitute certain items; and vary excise duty in respect of certain
excisable goods as follows:
Item 2023/2024 2024/2025 Proposal
Opaque beer 20% or Shs. 230 per litre, 10% or shs 150 per litre whichever is higher.
whichever is higher
any other alcoholic beverage locally produced 20% or Shs. 230 per litre, 10% or shs 150 per litre whichever is higher.
whichever is higher
Powder for reconstitution into beer NIL shs 2500 per kg
Un-denatured spirits of alcoholic strength by 100% or shs. 2500 per litre, 100% or shs. 2500 per litre, whichever is Higher
volume of 80% or more made from imported whichever is higher Proposal: Currently, the duty payable is
raw materials; irrespective of the Volume.
Any other un-denatured spirits—that is locally 60% or shs. 1500 per litre, 80% or shs. 1700 per litre whichever is higher
produced of alcoholic strength by volume of whichever is higher
less than 80%;
any other un-denatured Spirit that is imported of 100% or shs. 2500 per litre, 80% or shs. 1700 per litre whichever is higher
alcoholic strength by volume of less than 80%. whichever is higher
Other wines 80% or shs 8000 per litre, 100% or shs 10,000 per litre whichever is higher
whichever is higher
Excise Duty (Amendment) Act, 2024

Item 2023/2024 2024/2025 Proposal
fruit juice and vegetable juice, except juice 12% or Shs. 250 per litre 10% or shs. 250 per litre, whichever is higher.
made from at least 30% pulp or at least whichever is higher. Proposal: Exclusion of Juice made from 30%
30% juice by weight or volume of the total juice by weight or volume of the total
composition of the drink from fruits and composition of the drink from fruits and
vegetables locally grown. vegetables locally grown from excisable goods.
any other non-alcoholic beverage locally 12% or shs. 150 per litre 10% or shs 150 per litre whichever is higher
produced made out of fermented sugary whichever is higher.
tea solution with a combination of yeast
and bacteria.
Mineral water, bottled water and other 10% 10% or shs 50 per litre whichever is higher”
water purposely for drinking
Cement, adhesives, grout, white cement or Shs 500 per 50kgs shs 500 per 50 kgs
lime Proposal: Inclusion of adhesives, grout, white
cement, or lime in excisable goods
Motor spirit (gasoline) Shs 1450 per litre shs 1550 per litre
Excise Duty (Amendment) Act, 2024

Item 2023/2024 2024/2025 Proposal
Gas oil (automotive, light, amber for high-speed Shs 1130 per litre shs 1230 per litre
engine)
Incoming international calls from Burundi, USD 0.09 per minute Nil
Republic of Tanzania,
Payment service of withdrawals of cash Not provided for 0.5% of the value of the transaction
provided through a payment system but does
not include withdrawal services provided by a
financial institution or a micro finance deposit
taking Institution and an agent of a financial
institution
any other fermented beverages including cider, 30% or shs 550 per litre, 30% or shs 550 per litre whichever is higher.
perry, mead or near beer produced from locally whichever is higher Proposal: This applies to beverages from
grown or produced raw materials locally produced raw materials
construction materials of a manufacturer of an Not provided for NIL

electric vehicle, electric battery or electric
vehicle charging equipment or fabricator of the
frame and body of an electric vehicle whose
investment capital is, at least USD 35M for a
foreigner and USD 5M for a citizen
D Tax Procedures Code (Amendment) Act, 2024

1. Destruction of Goods 2. Waiver of Interest and penalty
outstanding as at 30 June 2023
A taxpayer who intends to claim a deduction of or credit for the goods All interest and penalty to be waived where the
destroyed shall inform the Commissioner in writing. taxpayer pays all the principal tax outstanding as at
30 June 2023, by 31 December 2024.
This amendment is aimed at enabling the Tax Authority to validate the
deduction as a result of destroyed goods before it is claimed by the Part of the interest and penalty to be waived on a pro
taxpayer. rata basis, where the taxpayer pays part of the
principal tax outstanding on 30 June 2023, by 31
December 2024.
The provision is meant to incentivize taxpayers to

pay principal tax due by 30 June 2023, by 31
December 2024.
There is no requirement to undertake the voluntary

disclosure process under this provision.
E Stamp Duty (Amendment) Act, 2024

1. Instruments by venture capitalists shall not 2. Changes in the conditions to benefit from NIL
attract stamp duty stamp Duty by Strategic Investment Projects
These instruments are: These have been amended as below:

a. Instruments with respect to shares acquired by investors in or a. capacity to use at least 80 percent of the locally produced
a private equity or venture capital fund. raw materials, subject to availability.
b. Instruments with respect to nominal share capital or any b. capacity to use at least 80 percent of the locally produced
increase of shares, acquired by an investor in or a private raw materials, subject to availability
equity or venture capital fund. c. employ at least 80 percent of its employees being citizens
c. Transfer of shares or other securities, to or by an investor in earning an aggregate wage of at least eighty percent of
or to or by a private equity or venture capital fund. the total wage bill.
Where these instruments are executed, there will be no In order for the strategic businesses to benefit from the NIL
requirement to pay Stamp Duty on them before they are registered stamp duty, they will have to satisfy the conditions indicated
or relied on by Government entities to convey an interest above in addition to the capital investment requirements
Stamp Duty (Amendment) Act, 2024

3. NIL stamp duty on instruments by Manufacturers of Electric Vehicles and accessories
Certain Instruments executed by a

manufacturer of an electric vehicle, electric
battery or electric vehicle charging equipment
or fabricator of the frame and body of an
electric vehicle attract NIL stamp duty.
That person however ought to fulfil the

conditions set such as investment capital and
local content requirements.
This is to incentivize the investment in

manufacturing electric vehicles and
accessories in Uganda.
Contacts
Stephen Ineget Peter Kyambadde Edgar Mukasa

Partner and Partner Associate Director
Country Leader Tax and Regulatory Services Tax and Regulatory Services
KPMG Uganda KPMG Uganda KPMG Uganda
T: +256312170080/1 T: +256312170080/1 T: +256312170080/1
E: [email protected] E: [email protected] E: [email protected]
Disclaimer
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely
information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without
appropriate professional advice after a thorough examination of the particular situation.
© 2024. KPMG Uganda is a registered partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved.

Uganda 2024-2025 Budget Brief

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Uganda

⎯ Expanding URA presence and coverage by opening up 5 liaison

⎯ Strengthening the enforcement and use of Electronic Fiscal Receipting

⎯ Strengthening the exchange of information with tax authorities in other

⎯ Strengthening enforcement interventions.

As a result of the fiscal consolidation agenda which is intended to

By the end of financial year (FY) 2024/25, Uganda’s GDP is projected

Uganda has contained inflation. At an average rate of 3.2% in the

The commercial bank lending interest rates for shilling-

To further reduce lending rates, Government will continue to

Private sector credit Exchange rate

The budget for next financial year is aimed at achieving the

i. Investing in the people of Uganda through education, health and

Budget allocation (Ushs, billions) Percentage

Domestic revenues 31,982 44.3%

Domestic borrowing 8,968 12.4%

Budget support 1,394 1.9%

External financing 9,583 13.3%

Treasury bonds for settlement 7,779 10.8%

Domestic debt refinancing 12,022 16.7%

Petroleum Fund drawdown 115.4 0.2%

Local Government revenue collections 293.9 0.4%

Total 72,137 100%

Budget allocation (Ushs, billions) Percentage

Project support (External financing) 9,584 13.3%

Domestic Refinancing 12,022 16.7%

External Debt repayments 3,149 4.4%

Interest payments 9,064 12.6%

Appropriation in aid 294 0.4%

Domestic arrears 200 0.3%

Domestic debt payment 9,100 12.6%

BOU Discretionary resources 28,724 39.8%

TOTAL BUDGET 72,137 100%

Key highlights and action plans on

Key highlights and action plans on priority

The Minister provided Shs 2.497 trillion to further improve the

▪ Supporting the new curriculum for S1-S4 students;

Key highlights and action plans on

▪ Government will continue to support

Key highlights and action plans on

Key highlights and action plans on

The parish development model

Government will deepen the use of WENDI and other Emyooga

Key highlights and action plans on

Key highlights and action plans on

At a disbursement of Shs 18.4 billion so

Key highlights and action plans on

Key highlights and action plans on

Key highlights and action plans on

Key highlights and action plans on

Key highlights and action plans on

The Minister has allocated Shs 41.55 billion to undertake

Key highlights and action plans on

Next financial year the Minister has provided Shs

Key highlights and action plans on

Key highlights and action plans on

Key highlights and action plans on

The country’s power generation capacity has increased by 600MW from

Key highlights and action plans on

Government is continuing to develop industrial parks to provide