Strengthening Governance and Environmental Responsibility: The 2026 Tax Procedure and Miscellaneous Bills Uganda’s 2026 Tax Procedure and Miscellaneous Bills signal a shift toward stronger tax governance, improved compliance, and increased environmental responsibility. From a one-time tax waiver aimed at clearing historical arrears to revised digital tax penalties and new environmental levies on imports, these reforms are designed to streamline administration while promoting sustainability. Businesses should take note of both the relief opportunities and the stricter compliance landscape ahead of the 1st July 2026 implementation.

By Ankit Jangla, Bruno Kalibbala and Bruno Edwin Amanya

In the last four articles, we looked at income tax, VAT, stamp duty, and excise duty. Now, we look at the other bills, specifically the Tax Procedures Code (Amendment) Bill, the External Trade (Amendment) Bill, and the Traffic and Road Safety (Amendment) Bill. Together, these proposals focus on cleaning up historical tax arrears, tightening environmental regulations on imports, and refining the penalties associated with digital tax systems.

These amendments, scheduled to take effect on 1st July 2026, reflect a move toward a more organised tax administration and a clearer commitment to environmental sustainability. Stakeholders should particularly note the “clean slate” opportunity provided by the proposed tax waiver.

A Strategic Clean Slate: The 2026 Tax Waiver

The Tax Procedures Code (Amendment) Bill introduces a significant relief measure through the proposed Section 47C, which waives any tax, interest, and penalties outstanding as of 30th June 2016 that remain unpaid by 1st July 2026. This initiative acknowledges that a significant portion of existing arrears stems from historical issues such as default assessments, inactive Taxpayer Identification Numbers (TINs), and inconsistent record-keeping.

The primary goal of this waiver is to “clean up” current taxpayer ledgers and reduce the volume of ongoing disputes and verification checks within the Uganda Revenue Authority (URA). While this is a positive proposal, proper implementation will be key, as past waivers have occasionally been frustrated by the methodology used to allocate payments.

Refining Penalties for the EFRIS Era

As the URA expands its digital footprint, the Bill proposes revising penalties to ensure they apply across all business scales. Currently, penalties for non-compliance with the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) are tied to “double the tax due,” which has been difficult to apply to non-VAT registered entities that have no identifiable tax on their supplies. The amendment addresses this gap by introducing a minimum fixed penalty of UGX 200,000.

Additionally, the Bill proposes reducing the penalty for the possession of unstamped goods. The current penalty of UGX 50 million is deemed relatively high for small businesses; therefore, the proposal seeks to lower this to UGX 2 million (or double the tax due, whichever is higher). This adjustment aims to maintain a deterrent effect while remaining reflective of an appropriate penalty for smaller taxpayers.

Environmental Levies and Import Restrictions

Environmental responsibility is a dominant theme in the Traffic and Road Safety and External Trade amendments. The government proposes prohibiting the importation of motor vehicles that are 13 years old or older, reducing the limit from the current 15 years. This is coupled with a new graduated environmental levy system, under which motor vehicles (excluding goods vehicles) will attract levies based on their age: 20% for 9-year-old vehicles, increasing to 50% of the CIF value for 12-year-old vehicles.

Furthermore, the External Trade (Amendment) Bill introduces a 30% environmental levy on the CIF value of worn clothing and other worn articles. This measure targets the environmental harm caused by imported second-hand clothing that rapidly becomes waste, while also supporting the domestic textile and garment industries by reducing competition from cheap imports.

Strategic Exemptions and Gaming Harmonisation

To balance these new levies, the government is proposing critical exemptions for the health and agricultural sectors. Imports of vaccines, medicines, medical supplies, and agricultural inputs, such as pesticides and insecticides, will be exempt from both the 1.5% infrastructure levy and the 1% import declaration fee. This is intended to reduce the cost of critical goods, support public health, and promote agricultural productivity.

In the gaming sector, the Lotteries and Gaming (Amendment) Bill seeks to harmonise the tax rate for betting activities, increasing it from 20% to 30% of the total amount staked, less payouts. By aligning betting with the existing 30% gaming rate, the government acknowledges that there is no meaningful economic difference between the two activities. The amendment also clarifies the definition of “payouts” to ensure a consistent basis for tax computation.

This article is an extract from the comprehensive Grant Thornton: Proposed Uganda Tax Amendments 2026 commentary.

This article is co-authored by Ankit Jangla (Director – Tax), Bruno Kalibbala (Manager – Legal and Tax), and Bruno Edwin Amanya (Senior Associate).To access the full 2026 analysis or to consult on how these administrative and miscellaneous shifts will impact your operations, contact Grant Thornton Uganda today at +256 200 807 600 or info@ug.gt.com. Schedule a comprehensive tax health check now to ensure your business remains resilient and 2026-ready.