Title: VAT & PAYE Simplified: What Every Ugandan Small Business Owner Must Know
Taxes confuse many entrepreneurs. But ignorance is not an excuse before the Uganda Revenue Authority (URA). Here is a simple breakdown of the two most common taxes.
1. Value Added Tax (VAT) – 18%
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Who pays it? Any business with annual turnover exceeding UGX 150 million (as of 2025) must register for VAT.
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How it works: You charge customers 18% (output tax) and pay 18% on your supplies (input tax). You remit the difference to URA.
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Deadline: File and pay by the 15th of the following month.
2. Pay As You Earn (PAYE) – Employment Tax
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Who pays it? Any employer paying a salary.
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Rates (2025 – check URA for annual updates):
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First UGX 235,000: 0%
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UGX 235,001 – 335,000: 10%
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UGX 335,001 – 410,000: 20%
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UGX 410,001 – 10,000,000: 30%
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Above UGX 10,000,000: 40%
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Penalties for late filing: 2% per month on the unpaid tax + interest (approx. 2–3% per month).
Pro Tip: Use the URA e-tax portal. Hire a part-time accountant if your turnover exceeds UGX 50 million yearly – mistakes are costly.