How URA’s tax amnesty program can revive struggling businesses

The Uganda Revenue Authority (URA) has introduced a tax amnesty program, offering a vital opportunity for businesses to regain their financial footing after the economic devastation caused by the COVID-19 pandemic.

Launched in July 2024, the program waives penalties and interest on unpaid principal taxes due by June 30, 2023, if settled by December 31, 2024.

For businesses, particularly those hit hard by the pandemic, this initiative could be the lifeline they need to recover. By clearing their tax arrears without the added burden of interest and penalties, businesses can free up much-needed cash flow to reinvest in growth, innovation, and sustainability.

The program covers a broad range of domestic taxes, including corporate income tax, individual income tax, rental income tax, pay-as-you-earn (PAYE), value-added tax (VAT), and more.

The relief applies to companies of all sizes, but it is especially beneficial for small and medium enterprises (SMEs) that often struggle with limited financial resources.

The URA’s tax amnesty enables businesses to clean up their financial standing with the tax authority, which is crucial not only for compliance but also for enhancing their reputability.

Tax compliance is often a prerequisite for accessing business opportunities, such as government contracts and financing from banks or investors. Clearing tax liabilities improves creditworthiness, allowing companies to access the capital they need for expansion or stabilization.

“This program underscores the government’s dedication to helping businesses recover and thrive post-pandemic,” said a URA spokesperson. “We urge business owners to take full advantage of the waiver, which allows them to settle their taxes and reinvest their savings in the business.”

For businesses that faced operational disruptions during the pandemic, the waiver represents an opportunity to rebuild. It allows them to prioritize essential investments—whether in technology, workforce expansion, or production—without the strain of heavy tax burdens.

Additionally, partial payments toward principal tax will still result in proportionate relief from interest and penalties, making it easier for businesses to benefit from the program even if they cannot settle all their dues at once.

By alleviating these tax liabilities, URA is encouraging businesses to focus on long-term sustainability, which is critical to Uganda’s broader economic recovery. With the lingering effects of COVID-19 still evident in various sectors, removing the financial strain of penalties and interest gives businesses the chance to stabilize and reestablish growth.

The amnesty also addresses the issue of tax compliance, which has been a challenge for many during the economic downturn. URA’s initiative encourages businesses to return to compliance without the punitive consequences that might otherwise have delayed their recovery efforts.

As businesses begin to rebound, the tax waiver allows them to focus on future tax obligations, ensuring smoother operations and avoiding future arrears.