The short answer
Uganda’s biggest tax changes for 2026 take effect on 1 July 2026, the start of the 2026/27 financial year. The VAT registration threshold doubles from UGX 150 million to UGX 300 million of annual taxable turnover, and the EFRIS penalty for non-compliance rises to double the tax due or UGX 200,000, whichever is higher, replacing the old fixed penalties of UGX 6 million to 8 million that some URA brochures still print.
Separate from the 2026 Act changes, 12 business sectors, including manufacturing, construction, IT, real estate, hotels, restaurants and fuel stations, have had to issue EFRIS e-invoices or e-receipts since 1 July 2025 regardless of VAT status, unless their annual turnover is below UGX 10 million. PAYE’s tax-free threshold also rose, from UGX 235,000 to UGX 335,000 a month. This page explains each change with its date and source. It is not tax advice: confirm your own position with URA or a tax adviser before you act.
New tax laws Uganda 2026: the changes at a glance
Most of the 2026 changes come from three Acts: the Value Added Tax (Amendment) Act 2026, the Income Tax (Amendment) Act 2026 and the Tax Procedures Code (Amendment) Act 2026. Nearly all of them start on 1 July 2026. The EFRIS sector rule below is older, from 1 July 2025, and is included because businesses still confuse it with the 2026 amendments.
| Change | Start date | Who it affects | What to do now |
|---|---|---|---|
| VAT registration threshold: UGX 150m to UGX 300m | 1 July 2026 | Businesses near UGX 300m annual turnover | Track turnover monthly; register once you cross 300m, or ask URA about deregistering if you now fall below it |
| EFRIS penalty: double the tax due or UGX 200,000, whichever is higher | 1 July 2026 | Any business required to use EFRIS | Issue every sale through EFRIS; do not rely on the old UGX 6m to 8m figures still shown in some URA brochures |
| 12 sectors must use EFRIS regardless of VAT status (UGX 10m turnover exemption) | 1 July 2025 | Manufacturing, construction, IT, real estate, hotels, restaurants, fuel stations and more | Register for EFRIS now if you have not already; see the sector list below |
| No income tax deduction for expenses missing an e-invoice | In force now | Any business claiming expenses from an EFRIS-required supplier | Demand an e-invoice or e-receipt for every purchase; keep it as proof |
| PAYE tax-free threshold: UGX 235,000 to UGX 335,000 a month | 1 July 2026 | Every employer running payroll | Update payroll bands before the July 2026 payroll run |
| Rental income tax: monthly filing now allowed (was quarterly only) | 1 July 2026 | Individual landlords | Optional; switch to monthly filing only if it suits your cash flow |
VAT threshold Uganda 2026: UGX 150m to UGX 300m explained
From 1 July 2026, a business must register for VAT once its annual taxable turnover passes UGX 300 million, up from UGX 150 million. This is confirmed by the Value Added Tax (Amendment) Act 2026 and reported consistently by EY, Onyango and Co. Advocates, and the Monitor on 11 August 2026.
If your turnover is now below UGX 300 million, you can apply online through the URA portal to deregister, subject to URA reviewing your records. Weigh that up carefully: deregistering stops monthly VAT returns and VAT charging, but it also ends your right to claim input VAT on your own purchases. A business can still register for VAT voluntarily below the threshold if that suits it.
What has not been confirmed
The old quarterly registration test, UGX 37.5 million in three consecutive months, was exactly a quarter of the old UGX 150 million annual threshold. Nobody has published a new quarterly figure to match the UGX 300 million annual threshold. Treat any UGX 75 million quarterly figure as our own inference, not a confirmed rule, and ask URA directly before relying on it.
Work out where you stand with our VAT calculator, or read the fuller VAT in Uganda guide for registration steps, rates and exempt supplies.
EFRIS penalty 2026 and the 12 mandatory sectors
From 1 July 2026, the penalty for EFRIS non-compliance, meaning failing to issue an e-invoice or e-receipt, failing to use EFRIS at all when required, or tampering with a fiscal device, becomes double the tax due on the sale or UGX 200,000, whichever is higher. This is confirmed by EY’s 11 June 2026 tax alert on the Tax Procedures Code (Amendment) Act 2026, which amends section 93.
That replaces older fixed minimums of UGX 6 million (for non-issue or tampering) and UGX 8 million (for not using EFRIS at all). URA’s own EFRIS brochure, still dated 2023/24, has not been updated and continues to show those older figures. If you see UGX 6 million or UGX 8 million quoted as the EFRIS penalty, it is out of date; use the 1 July 2026 figure instead.
The 12 sectors, mandatory since 1 July 2025
Separately, and already in force, businesses in these 12 sectors must issue EFRIS e-invoices or e-receipts whether or not they are VAT registered, unless their annual turnover is below UGX 10 million (below that, EFRIS is voluntary):
- Manufacturing
- Mining and quarrying
- Water supply, sewerage, waste management and remediation
- Electricity, gas, steam and air conditioning supply
- Construction
- Transportation and storage (excluding passenger taxis, boda-bodas, shuttles and buses)
- Accommodation and food service (hotels and restaurants)
- Information technology and communication (excluding non-resident digital service providers paying digital service tax)
- Real estate (landlords earning under UGX 2,820,000 a year in rent are excluded)
- Professional, scientific and technical activities
- Arts, entertainment and recreation
- Wholesale and retail of fuel
Every VAT-registered business, in any sector, has had to use EFRIS since 1 January 2021; the 12-sector list only widened who else must use it. Not sure whether EFRIS applies to your business? Check it against your sector and turnover there.
The rule that catches buyers out
Under Income Tax Act section 22(3)(m), you cannot claim an income tax deduction for an expense if the supplier was required to use EFRIS and did not give you a valid e-invoice or e-receipt. As an illustration only: paying UGX 5 million to a construction firm that should have issued an e-invoice but did not means that UGX 5 million cannot be deducted, which can cost roughly UGX 1.5 million in extra company tax at the 30 percent rate. Always ask for the e-invoice or e-receipt at the time of the purchase, not afterwards.
PAYE, rental and other tax changes from 1 July 2026
The PAYE tax-free threshold for resident employees rose from UGX 235,000 to UGX 335,000 a month (UGX 2,820,000 to UGX 4,020,000 a year) from 1 July 2026. The bands above it were restructured too: 20 percent applies from UGX 335,001 to 410,000, a new 25 percent band applies from UGX 410,001 to 485,000, and 30 percent applies above that, with an extra 10 percent surcharge on pay above UGX 10 million a month. Confirmed on URA’s own live PAYE rates page and by EY and Onyango and Co. Advocates. Update your payroll before the July 2026 run; see the full bands and worked examples in our PAYE guide.
Rental income tax
Individual landlords can now choose to file provisional rental income tax monthly instead of only quarterly, an added option, not a new requirement. The rental tax rate itself has not changed: 12 percent of chargeable rental income above UGX 2,820,000 a year for individuals, 30 percent of chargeable rental income for companies.
Other changes worth knowing
- A VAT withholding agent no longer has to withhold VAT from a supplier who gives them an e-invoice or e-receipt through EFRIS, from 1 July 2026.
- The purchase threshold for a non-VAT-registered buyer to qualify for the 5 percent e-receipt lottery refund was cut from UGX 5,000,000 to UGX 2,000,000 of purchases in 30 days, from 1 July 2026.
- A tax amnesty from 1 July 2026 waives outstanding principal tax, penalties and interest owed as at 30 June 2016 and still unpaid, with no condition to pay the principal first.
Two figures in this area are not fully confirmed: the new cap on interest URA pays on late VAT refunds (reported as 5 percent of the refund, from a single source only), and whether PAYE on a second job is withheld at 30 percent (URA’s own page) or 40 percent (some 2026 press reports citing URA). Ask URA or your payroll provider to confirm the current figure before you rely on it.
What has NOT changed in 2026
Rumours travel faster than tax law. These figures stayed the same in the 2026 Amendment Acts:
- The standard VAT rate is still 18 percent.
- The standard corporate income tax rate is still 30 percent for non-mining companies.
- NSSF contributions are still 15 percent of gross monthly pay in total (10 percent employer, 5 percent employee).
- Local Service Tax bands are still UGX 5,000 to 100,000 a year.
- Presumptive tax bands and the UGX 150 million small-business ceiling are unchanged.
- The rental income tax rate itself (12 percent individuals, 30 percent companies) is unchanged; only the filing frequency option changed.
If someone tells you VAT went up, or that EFRIS is a new tax, or quotes a penalty figure without a date, check it against this page or ask URA directly before you act on it.
If a penalty has already landed, or URA has asked for records
If a penalty notice, an assessment or an EFRIS compliance letter has just landed on your desk, three things matter more than anything else on this page:
- Read the deadline first. URA assessments and penalty notices carry their own deadline for objecting or paying; missing it can close off your right to object. Do not wait to understand everything before you check that date.
- Do not ignore it. A penalty that goes unanswered tends to accrue interest, currently 2 percent a month, compounded, on unpaid VAT.
- Gather your records now. Sales and purchase invoices, EFRIS records, and bank statements for the period in question. You, or whoever advises you, will need them either way.
If URA has asked for records with a short deadline, request an extension in writing if you genuinely need one; URA can grant an extension of time to file, though it is capped at 90 days and does not move the date the tax itself is due. For a formal objection to an assessment, or a dispute over EFRIS compliance, this is a matter for URA directly or a registered tax agent, not something to guess at from a blog post.
Where Growth Informer fits in
Meeting these deadlines is your business’s own obligation, and any ruling on your specific case has to come from URA or a registered tax adviser, not from this page. Growth Informer Software Services is registered with URA as a tax agent. We can help with EFRIS and VAT set-up and training on your own systems, filing VAT, PAYE and other returns, responding when a penalty or assessment lands, objections to assessments, and representation in a dispute. We quote after seeing your notice or your books; we do not price tax work in advance, and we make no claims about outcomes or a success rate.
If you also need EFRIS to actually issue receipts
Growth Informer Business, our own cloud POS and business-management platform, issues URA EFRIS e-receipts and e-invoices today, for sales, stock, purchases and expenses across one or more branches, on a phone. EFRIS is a setting you can switch on when URA requires it, or earlier if you choose, and leave off until then, without changing systems. See it explained for a shop or small trader in our EFRIS for small business guide.
If you already run your own POS, ERP or accounting software and just need it connected to EFRIS, we scope the connection against URA’s published specification and confirm feasibility before quoting. Meeting URA’s fiscal rules stays your business’s own obligation either way.
Frequently asked questions
What are the new tax laws in Uganda for 2026?
The main ones are the VAT registration threshold rising from UGX 150 million to UGX 300 million, the EFRIS penalty rising to double the tax due or UGX 200,000 (whichever is higher), and the PAYE tax-free threshold rising from UGX 235,000 to UGX 335,000 a month. All three start on 1 July 2026. This is not tax advice; confirm your position with URA.
What are the tax amendments 2026 Uganda made in total?
Three main Acts: the Value Added Tax (Amendment) Act 2026, the Income Tax (Amendment) Act 2026 and the Tax Procedures Code (Amendment) Act 2026, plus a Stamp Duty (Amendment) Act 2026. Between them they touch VAT registration, EFRIS penalties, PAYE bands, rental filing, several new withholding taxes and a tax amnesty for old debts. Most changes start on 1 July 2026.
What are URA's new rules for 2026?
The rule people usually mean is the 12 sectors that must use EFRIS regardless of VAT status, which actually took effect 1 July 2025, not 2026, though URA's notice about it carries a 2026 date online. The genuinely new 2026 rules are the VAT threshold rise, the EFRIS penalty change, and the PAYE band changes, all from 1 July 2026.
What is the VAT threshold in Uganda now?
UGX 300 million of annual taxable turnover, from 1 July 2026, up from UGX 150 million. A business can still register for VAT voluntarily below that figure.
What is the EFRIS penalty in 2026?
From 1 July 2026, double the tax due on the sale or UGX 200,000, whichever is higher. Older figures of UGX 6 million to 8 million, still printed in some URA brochures, no longer apply from that date.
Do I need EFRIS if I am not VAT registered?
Possibly. If your business is in one of the 12 sectors URA named (manufacturing, construction, IT, real estate, hotels and restaurants, fuel stations and others) and your annual turnover is UGX 10 million or more, you have needed EFRIS since 1 July 2025 regardless of VAT status. Check your own sector and turnover against the list on this page before assuming either way.