The short answer
A trading licence is the annual permit KCCA in Kampala, or your municipal, town or district council elsewhere, issues to anyone selling goods or services from fixed premises. The fee is set by your trade and the grade of your business area, and the published KCCA rates run from UGX 6,000 a year for a kiosk in Grade IV to UGX 600,000 a year for a pharmacy in Grade I. A general retail shop pays between UGX 31,500 and UGX 210,000 depending on grade.
The licence runs for the calendar year: payable before you start trading, renewed by 1 January and expiring on 31 December, with no pro rata rule stated for part of a year. At the same visit your council assesses local service tax, a separate annual charge of UGX 5,000 to UGX 100,000 based on your monthly turnover, which is the bill most owners have not budgeted for.
Market traders who pay market dues and stall rent, farmers selling their own produce and people making handicrafts at home are exempt under section 8(2) of the Trade (Licensing) Act. Trading without a licence where one is required is an offence, punishable by a fine or up to six months in prison. For how this sits beside your URSB registration see cost-of-registering-a-business-in-uganda and how-to-register-a-business-in-uganda.
The full fee table, by trade and grade
KCCA grades business areas from Grade I, the highest rate band, down to Grade IV, under the Trade (Licensing) (Grading of Business Areas) Order 2011. For the same trade the Grade I fee is roughly three to twelve times the Grade IV fee, so the street matters as much as the trade. These are KCCA's published rates, checked September 2026.
| Trade | Grade I | Grade II | Grade III | Grade IV |
|---|---|---|---|---|
| Retailer, general shop | 210,000 | 78,750 | 84,000 | 31,500 |
| Kiosk | 75,000 | 15,000 | 30,000 | 6,000 |
| Boutique or beauty salon | 210,000 | 131,250 | 84,000 | 52,500 |
| Restaurant | 187,500 | 90,000 | 75,000 | 36,000 |
| Eating house | 172,500 | 60,000 | 69,000 | 24,000 |
| Bar, pub or inn | 187,500 | 112,500 | 75,000 | 45,000 |
| Drug store | 165,000 | 135,000 | 66,000 | 54,000 |
| Pharmacy | 600,000 | 315,000 | 240,000 | 126,000 |
| Mobile money business | 100,000 | 50,000 | 40,000 | 20,000 |
| Grocery | 525,000 | 307,500 | 210,000 | 123,000 |
| Wholesaler | 498,750 | 236,250 | 199,500 | 94,500 |
| Printing and publishing firm | 412,500 | 262,500 | 165,000 | 105,000 |
| Car washing bay | 165,000 | 60,000 | 66,000 | 24,000 |
Two honest warnings about this table. First, in four lines KCCA's published rates put Grade II below Grade III: a retailer pays UGX 78,750 in Grade II against UGX 84,000 in Grade III, and the same inversion shows up for a kiosk, an eating house and a car washing bay. We could not reconcile that from any published source, so if you are on the boundary, ask your division revenue office which rate they will assess before you budget.
Second, KCCA does not publish which streets or divisions fall in which grade, so there is no way to look your own grade up online. Ask at the division office when you apply.
Trades with no line of their own
KCCA's table has no separate entry for a hardware shop or a barber shop. In practice a hardware shop is usually assessed as a retailer or a wholesaler and a barber under the salon line, but that is not confirmed by KCCA, so confirm the category at your division before you pay rather than after.
Local service tax, assessed at the same counter
Local service tax is assessed at the same visit as the trading licence, and business owners pay it once a year with the licence. In Kampala it is set by monthly business turnover, not by trade or grade.
| Monthly business turnover | Local service tax a year |
|---|---|
| UGX 500,000 to 1,000,000 | UGX 5,000 |
| UGX 1,000,000 to 2,000,000 | UGX 10,000 |
| UGX 2,000,000 to 3,000,000 | UGX 20,000 |
| UGX 3,000,000 to 4,000,000 | UGX 30,000 |
| UGX 4,000,000 to 5,000,000 | UGX 40,000 |
| UGX 5,000,000 to 6,000,000 | UGX 50,000 |
| UGX 6,000,000 to 7,000,000 | UGX 60,000 |
| UGX 7,000,000 to 8,000,000 | UGX 70,000 |
| UGX 8,000,000 to 9,000,000 | UGX 80,000 |
| UGX 9,000,000 to 10,000,000 | UGX 90,000 |
| Above UGX 10,000,000 | UGX 100,000 |
So a Grade III restaurant turning over UGX 4,500,000 a month pays UGX 75,000 for the licence and UGX 40,000 in local service tax, UGX 115,000 for the year, not the UGX 75,000 the fee table alone suggests.
The part that carries a penalty
If you have staff, you must also deduct local service tax from their gross pay and remit it to the local authority where each employee lives, within the first four months of the financial year, by 31 October. Employee rates run from UGX 5,000 a year on pay above UGX 100,000 to UGX 200,000 a month, up to UGX 100,000 a year on pay above UGX 1,000,000 a month, and KCCA allows the deduction in four equal monthly instalments. The penalty for late or non remittance is 50% of the local service tax due. It is a small tax with a heavy penalty, and it is deducted from gross pay before PAYE is worked out.
Exempt from local service tax: members of the UPDF, police, prisons and local defence units, diplomats, the unemployed, peasants and subsistence workers, petty food vendors, boda boda riders, and small informal artisans who are not established businesses.
How to apply and renew
A new licence
- Take your ID, your URSB certificate of incorporation or business name registration, and your rent agreement to your KCCA division office or council. Applicants must be 18 or older.
- A revenue officer assesses the fee for your trade and grade and issues a payment advice form.
- Pay at a bank. KCCA also accepts mobile money and its own online platform.
- Collect the licence at the division office once the payment clears.
A renewal
Bring last year's licence and receipt instead of a fresh URSB certificate. Pay before 1 January, because the licence expires on 31 December and there is no stated pro rata discount for starting or renewing part way through the year. Budget the local service tax at the same time.
Outside Kampala
Your city, municipal, town or district council issues the licence under the same Trade (Licensing) Act, but fee levels differ by council and some work on the July to June financial year rather than the calendar year. Do not assume the KCCA rates above apply to your district. Ask your council for its own rate notice.
If you are trading without a licence, or yours has lapsed
Trading without a required licence is an offence under the Trade (Licensing) Act, punishable by a fine or up to six months in prison, so the way out is to get assessed rather than to wait to be found. Four things decide what it costs you.
- Check whether you needed one at all. Market traders who pay market dues and stall rent, farmers selling their own produce and people making handicrafts at home are exempt under section 8(2) of the Act. If that is you, nothing is owed.
- Take your own turnover figure with you. The officer who assesses the licence assesses your local service tax at the same counter, from monthly business turnover. Arrive without a figure and somebody else estimates it, and the estimate sets the band. One month of daily sales totals is enough.
- Clear the arrears that carry a stated penalty first. Employees' local service tax is remitted by 31 October and the penalty for missing it is 50% of the tax due. NSSF contributions stay owed whatever else happens, and fall due by the 15th of the following month. Those two have published consequences. The late trading licence, as far as we can find, does not.
- Keep the payment advice and the receipt. Last year's licence and receipt are what you produce at renewal instead of a fresh URSB certificate, and the payment advice form is your only record of the trade and grade you were assessed under.
One thing we will not guess at: KCCA does not publish which streets or divisions sit in which grade, and we found no published route for disputing the trade or grade you were assessed under. Ask the division revenue office, and ask in writing.
If the live problem is a URA one instead, a penalty, an assessment or an audit letter, the clock is tighter: an objection to an assessment must be lodged within 45 days of the notice, with the grounds stated and the evidence attached. We are registered with URA as a tax agent and can set the records up, file, object and represent you, and we quote after seeing the notice, see tax-agent-services-uganda. For the licence application and the URSB paperwork itself, see business-registration-services-uganda.
The trades that need a second licence
Some trades need a licence from another body on top of the trading licence. The rules below come from sources we could not fully verify, so treat them as what to ask your division and the regulator about rather than the final word.
- Restaurants, eating houses, bars and food processors in Kampala generally need a KCCA public health inspection of the premises, and food handlers a medical examination and food handler certificate, before the trading licence is issued or renewed.
- Retail pharmacies need a National Drug Authority licence and a registered pharmacist resident in Uganda as a director or partner, on top of the KCCA trading licence. NDA is reported to inspect proposed premises within about 20 days of a complete application.
- Class C drug shops are licensed separately by NDA under its own guidelines, revised 1 November 2023 and effective 1 December 2023.
- Selling alcohol needs a liquor licence under the Liquor Act from KCCA or your council, on top of the trading licence, with separate types for retail on premises, off licence and wholesale. Current fees were not published where we could read them, so ask the licensing office.
Set this up first
A trading licence sits alongside URSB registration, not instead of it. Take these in order and stop where your business actually is.
- The basics at their real cost. URSB registration at UGX 90,000 for a business name or from UGX 105,000 plus 0.5% stamp duty for a company, a free TIN, and this trading licence at your trade and grade rate, plus the local service tax above. Only the TIN is free. Owners report agents charging from about UGX 600,000 upwards for the URSB filing alone.
- The free habits. Business money kept apart from personal money, a daily record of sales and expenses, WhatsApp Business with a catalogue, and a claimed Google Business Profile so customers find the shop on Maps, see how-to-add-business-to-google-maps-uganda. The daily turnover record is also the figure the revenue officer asks for at your next licence assessment.
- Once there is stock to lose or staff at the till, put sales, stock and the daily cash up on Growth Informer Business, our cloud POS. Switch EFRIS on only when URA requires it of your trade, and check that first with do-i-need-efris.
- Once customers look you up before they visit, a website , with a monthly care plan . A kiosk on a UGX 6,000 licence does not need this yet, and we will say so.
- A custom build, quoted as a job, only when no ready made tool fits the trade.
- If a penalty, assessment or URA deadline is already live, none of this is the next move. Start with the steps in the section above.
Frequently asked questions
How much is a trading licence in Uganda?
It depends on your trade and business area grade. Published KCCA rates for September 2026 run from UGX 6,000 a year for a kiosk in Grade IV to UGX 600,000 for a pharmacy in Grade I. A general retail shop pays UGX 210,000 in Grade I, UGX 78,750 in Grade II, UGX 84,000 in Grade III and UGX 31,500 in Grade IV.
What are the KCCA trading licence grades?
KCCA grades business areas from Grade I, the highest rate band, to Grade IV, under the Trade (Licensing) (Grading of Business Areas) Order 2011. KCCA does not publish which streets or divisions fall in which grade, so ask at your division office when you apply.
How do I get a trading licence in Uganda?
Take your ID, your URSB business or company registration and your rent agreement to your KCCA division office or council. A revenue officer assesses the fee for your trade and grade and issues a payment advice, you pay at a bank or by mobile money, then collect the licence. Applicants must be 18 or older.
When does a trading licence expire in Uganda?
It runs for the calendar year: payable before you start trading, renewed by 1 January, and expiring on 31 December. There is no stated pro rata discount for part of a year. Councils outside Kampala set their own calendar and some work on the July to June financial year.
What is the penalty for trading without a licence?
A fine or up to six months in prison under the Trade (Licensing) Act.
Is local service tax the same as a trading licence?
No. Local service tax is a separate annual local government charge, assessed at the same visit as the licence. A Kampala business owner pays UGX 5,000 a year at UGX 500,000 to UGX 1,000,000 of monthly turnover, rising to UGX 100,000 a year above UGX 10,000,000 a month. Employees' local service tax must be deducted and remitted by 31 October, and the penalty for missing that is 50% of the tax due.
Do market vendors need a trading licence?
No. Market traders who pay market dues and stall rent are exempt under section 8(2) of the Trade (Licensing) Act, as are farmers selling their own produce and people making handicrafts at home.