The VAT changes sit within a broader Domestic Revenue Mobilisation Strategy, with overall domestic revenue projected to rise from Shs 35.7 trillion in FY 2025/26 to Shs 45.6 trillion in FY 2026/27.

Higher Registration Threshold

Parliament approved an increase in the annual VAT registration threshold from Shs 150 million to Shs 300 million, a measure Finance Minister Henry Musasizi said in his Budget Speech is intended to ease compliance for small businesses and improve tax administration efficiency. The measure is projected to generate Shs 349 billion in revenue.

VAT Deferment Extended to Iron Ore Processing

The budget also extends VAT deferment to inputs used in iron ore processing, a move framed as supporting mineral value addition and industrialisation.

Context

The measures were presented as part of the FY 2026/27 Budget Speech, delivered to Parliament on 11 June 2026 under the theme "Full Monetisation of Uganda's Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access."