For those interested in Uganda’s tax regulations, here is a comprehensive breakdown of the individual income tax framework in place for 2025. This overview details tax brackets, applicable supplementary taxes, and the progressive structure that defines Uganda’s current tax policy.
Individual Income Tax Rates in Uganda: 2025 Overview
Uganda employs a progressive system for taxing individual income, levied on the basis of annual income earned. All figures are provided in Ugandan Shillings (UGX) and reflect the official structure as of 2025.
| Taxable Income (UGX, per year) | Applicable Rate (%) |
|---|---|
| UGX 0 – UGX 2,820,000 | 0% |
| UGX 2,820,001 – UGX 4,020,000 | 10% |
| UGX 4,020,001 – UGX 4,920,000 | 20% |
| UGX 4,920,001 – UGX 120,000,000 | 30% |
| Above UGX 120,000,000 | 40% |
The progressive tax system means your effective tax rate increases with higher income brackets, but only the income in each bracket is taxed at the corresponding rate. For those earning less than UGX 2,820,000 annually, there is no individual income tax liability.
Supplementary Taxes and Surtaxes
Uganda also applies a set of surtaxes and withholding taxes that impact specific types of income. Understanding these is crucial for accurate tax planning and compliance in 2025.
| Condition | Rate (%) |
|---|---|
| Rental income in excess of UGX 2,820,000 per year | 12% |
| Withholding tax on interest income | 15% |
| Withholding tax on dividends (from a listed company) | 10% |
| Withholding tax on dividends (non-listed company or standard) | 15% |
| Withholding tax on importation of goods | 6% |
| Withholding tax on payments from government or designated agents for supplies exceeding UGX 1,000,000 | 6% |
These taxes are generally withheld at source, reducing the administrative burden on individuals but also potentially impacting net incomes, particularly for those with diverse income streams.
Basis of Assessment
Uganda’s individual income tax is assessed on income, which includes both employment remuneration and select other streams such as rental, investment, and some capital earnings. The bracketed structure ensures an increasing rate as taxable income rises, with the maximum statutory personal rate set at 40% on income above UGX 120,000,000 per year.
Pro Tips for Managing Individual Income Tax in Uganda
- Review all sources of income annually—including rental and investment income—to anticipate any supplementary tax liabilities before filing.
- Where applicable, keep clear records of withholding tax already paid—especially on dividends and interest—to avoid double taxation or claim necessary credits during annual assessment.
- Monitor your annual income against threshold brackets to strategically plan the timing of receipt of income and potential tax-savings opportunities within the progressive system.
- When dealing with government contracts or supplies, account in advance for the 6% withholding tax applied to payments over UGX 1,000,000 to avoid unexpected shortfalls in cash flow.
- If you receive significant rental income, consult with your accountant annually to ensure the 12% excess rental surtax is properly reported and paid.
Where to Find Official Information
For the latest updates on Uganda’s individual income tax framework, direct information, and tools, consult the official Uganda Revenue Authority website: ura.go.ug
In summary, Uganda’s income tax system for individuals in 2025 remains progressive, with a clear bracketed approach and targeted surtaxes for specific types of income. The basic principle is straightforward but requires ongoing attention, particularly for those with earnings spread across multiple categories. Paying close attention to bracket thresholds and supplementary withholding taxes will help ensure compliance and optimal tax planning in Uganda.