Businesses struggling with tax debts have been given a lifeline by the Uganda Revenue Authority (URA), which says taxpayers can seek payment by instalments, benefit from certain waivers and challenge tax assessments they believe are wrong.
According to URA Commissioner General John Musinguzi Rujoki, businesses should not allow financial difficulties to push them out of the tax system when there are legal mechanisms available to help them remain compliant.
“URA has various interventions that businesses can take advantage of, to remain compliant while still operating sustainably,” Musinguzi said through his weekly column in Uganda’s leading newspaper.
One of the key measures targets taxpayers who have accumulated interest and penalties on their tax bills.
URA says interest and penalties outstanding as at June 30, 2025 can be waived if the taxpayer pays the principal tax by June 30, 2027.
In simple terms, eligible taxpayers do not have to continue carrying the additional burden of interest and penalties if they clear the principal tax within the stipulated period.
The authority has also provided for a waiver of tax outstanding as at June 30, 2016, offering an opportunity for taxpayers with older liabilities to resolve their tax affairs under the applicable conditions.
For businesses facing financial problems, Musinguzi says another option for them is negotiating to pay the tax bill in instalments.
This means a taxpayer who cannot raise the entire amount at once does not necessarily have to wait until the debt becomes a bigger problem. Instead, the taxpayer can approach URA and seek an arrangement to settle the liability over an agreed period.
The Commissioner General also highlighted relief for some new businesses.
A business established by a citizen after July 1, 2025, with investment capital not exceeding Shs100 million, can benefit from an income tax exemption under the measure outlined by URA.
For a new entrepreneur, the exemption could provide some breathing space during the early stages of the business, when money is often being spent on stock, equipment, rent and other operating costs.
But URA is also reminding taxpayers that they have rights when dealing with the authority.
“Where a taxpayer is not satisfied with the assessment, they may object to the assessment,” Musinguzi said.
This means taxpayers who believe URA has assessed them incorrectly can use the prescribed objection process instead of simply accepting a tax bill they consider unjustified.
The authority is also trying to address another problem that often leads to non-compliance and thats lack of information.
Musinguzi said URA is conducting taxpayer education programmes across the country to help businesses understand their obligations and rights.
“URA is carrying out Taxpayer Education sessions in various areas to enable taxpayers to understand their rights and obligations,” he said.
Through these programmes, taxpayers are expected to learn more about the taxes applicable to their businesses, filing requirements, available incentives and deductions, as well as the procedures for disputing assessments.
URA is also working with local leaders to expand tax awareness and registration. According to Musinguzi, the authority collaborates with local government leaders through initiatives including the Local Taxpayer Register Expansion Programme to identify and register more taxpayers.
At the same time, URA is automating its systems and processes in an effort to make compliance easier and reduce the cost of dealing with tax matters. Among the measures highlighted is the use of pre-filled returns.
Therefore, the message from URA is that businesses facing difficulties should engage the authority instead of simply ignoring their tax obligations.
Musinguzi says the available interventions are meant to give taxpayers a chance to settle their obligations while keeping their businesses operational.
