By Mulengera Reporters
Uganda Revenue Authority (URA) has outlined a range of tax relief measures for small and medium-sized enterprises (SMEs), clarified the transfer of tax credits and announced plans to automate air cargo documentation as part of efforts to make tax administration more efficient.
In a question-and-answer feature published in New Vision on Thursday, July 23, 2026, URA Commissioner General John Musinguzi Rujoki addressed concerns from taxpayers and businesses on customs valuation, cargo clearance, tax credits, withholding tax and taxation of foreign income.
SMEs offered tax relief measures
Musinguzi said SMEs facing financial difficulties can take advantage of several measures aimed at helping businesses remain compliant while managing their tax obligations.
Among the measures is a waiver of interest and penalties on principal tax outstanding as of June 30, 2025, provided the taxpayer pays the principal tax by June 30, 2027.
URA also cited a waiver of tax, including penal tax and interest, outstanding as of June 30, 2016.
New businesses established by Ugandan citizens after July 1, 2025, may also qualify for an income tax exemption if their investment capital does not exceed Sh500 million, according to the Commissioner General.
Taxpayers facing cash-flow challenges can further request to pay their taxes in instalments, while those who disagree with a tax assessment have the right to object.
URA also said taxpayers may request extensions of time to file returns and are being educated about their tax rights, obligations and the taxes applicable to their businesses.
Taxpayers can now transfer eligible credits online
The authority has also restored a self-service, system-based process for transferring eligible tax credits.
Musinguzi said taxpayers can log into their TIN accounts and access the Credit Transfer option under the Payments menu. The system allows eligible taxpayers to request adjustments to a tax period, transfers between tax types or, in certain circumstances, transfers from one taxpayer to another.
The Commissioner General said the process had previously required taxpayers to write formally to URA seeking approval. The restored system allows eligible transfers to be initiated directly through the taxpayer’s online account.
However, not all tax credits can be transferred between tax heads. Withholding Tax and Value Added Tax/Local Excise Duty offsets, for example, cannot be transferred across different tax heads through this process and must instead be utilised through a refund application.
Transfers across tax heads are generally permitted where a payment was made incorrectly under the wrong tax head.
URA moves to automate air cargo clearance
On delays affecting air cargo at Entebbe International Airport, URA attributed the problem largely to the reconciliation of cargo information before it can be captured in the customs system.
According to Musinguzi, the process is often initiated by airline ground handlers after an aircraft lands. Because much of the data entry remains manual and depends on the volume of cargo on individual flights, the process can take several hours.
URA is now in advanced stages of automating and integrating its systems with airlines operating through Entebbe.
The planned system will allow airlines to submit cargo manifests electronically before aircraft arrive, enabling taxpayers to begin the clearance process earlier and potentially reducing cargo turnaround times.
In the meantime, URA advised importers to make accurate and timely declarations and provide authentic supporting documentation promptly.
Withholding tax remains the supplier’s credit
The Commissioner General also clarified the treatment of the 6% withholding tax applied by designated withholding tax agents.
For income tax purposes, designated agents are required to withhold 6% on payments exceeding Shs1 million for goods and services, except where the supplier is exempt.
Musinguzi said the tax withheld is treated as a payment of tax by the supplier and is therefore creditable against the supplier’s tax liability for that year.
As a result, a withholding tax agent cannot claim the withheld amount as its own tax credit or redirect it towards its own tax liabilities.
Where a designated agent fails to withhold the required tax, the agent is personally liable to remit the tax to URA, although the amount may be recovered from the supplier.
URA also highlighted a change effective July 1, 2026: designated VAT withholding agents are not required to withhold VAT on payments to suppliers who issue an Electronic Fiscal Receipting and Invoicing Solution (EFRIS) invoice or receipt.
URA publishes indicative customs values
Responding to concerns from importers over the availability of standardized customs values, Musinguzi said URA maintains a database of harmonized customs values that is reviewed quarterly in line with the General Agreement on Tariffs and Trade (GATT).
The values are available through the URA web portal under Tax Education → Customs Valuation → Revised General Goods Database.
However, Musinguzi cautioned that the published values are indicative and do not replace the customs valuation principle of “price paid or payable.”
Foreign income remains subject to tax rules
On taxation of foreign interest income, Musinguzi said URA applies Uganda’s domestic tax laws alongside Double Taxation Agreements to prevent excessive taxation.
While Uganda generally retains taxing rights over the worldwide income of its residents, applicable treaties can limit source-country taxation and provide credits for taxes paid abroad.
URA encouraged taxpayers earning interest from foreign sources to declare the income and take advantage of applicable relief provisions.
The Commissioner General’s responses form part of URA’s ongoing taxpayer education efforts, providing businesses and individuals with guidance on their tax obligations, available reliefs and changes in tax administration. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
