EY highlights Tax reforms for Technology Economic Transformation

Uganda’s 2025/26 Financial Year budget, themed “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding Services, Digital Transformation, and Market Access,” signals a bold step toward economic modernization.

With a total budget of UGX 72.4 trillion, the government is leveraging tax reforms and significant investments in technology to drive inclusive growth, enhance accountability, and position Uganda as a digitally empowered, industrialized economy.

At the recent EY Breakfast Forum FY 2025/26, held at the Sheraton Hotel in Kampala, Ernst & Young Uganda’s Senior Tax Manager, Robert Mbaziira, outlined the government’s ambitious tax administration reforms. Central to these changes is the enforcement of the Tax Identification Number (TIN) policy, effective July 1, 2025, which mandates every Ugandan—including those in rural areas—to register for tax.

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This policy aims to broaden the tax base, with Mbaziira noting that “every Ugandan, however, if you are in the village, will now pay the tax rally.” While this inclusive approach will bring many into the tax register via their national IDs, it poses challenges. Approximately 33% of Ugandans operate outside the money economy, meaning many will not contribute significant revenue but will still require administrative oversight.

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Mbaziira highlighted the complexity this creates, particularly for informal traders who often operate in groups, pooling goods under a single business registration. The government may need to “disaggregate and see who qualifies for registration” to ensure fairness and efficiency.

The TIN policy aligns with a broader push for grassroots accountability. Mbaziira cited Finance Minister Hon. Matia Kasaija’s directive that parish chiefs report on local economic performance, fostering transparency and economic visibility from the micro to macro levels. These reforms aim to stabilize Uganda’s economy by enhancing fiscal oversight and supporting inclusive growth.

Complementing these tax reforms is a robust investment in science, technology, and innovation (STI), with UGX 835.98 billion allocated to drive Uganda’s digital transformation. This includes UGX 388.23 billion for ICT and creative industries, UGX 256.66 billion for innovation and technology transfer, and UGX 191.83 billion for digital transformation initiatives. Though representing just 1.15% of the total budget, technology’s impact is amplified through its integration across agriculture, health, education, and infrastructure.

Agriculture, which supports over 60% of Ugandans’ livelihoods, remains a cornerstone of the budget. Mbaziira emphasized the sector’s critical role, noting significant funding for agricultural initiatives to counter disruptions like COVID-19. Technology plays a pivotal role here, with digital platforms enabling smallholder farmers to access markets and precision agriculture tools reducing post-harvest losses. These innovations align with the budget’s focus on value addition and industrialization, ensuring agriculture drives economic growth.

The 2025/26 budget reflects Uganda’s commitment to a tenfold economic growth trajectory under the Fourth National Development Plan (NDP IV). By combining tax reforms with technology investments, the government aims to enhance public service efficiency, reduce transaction costs, and attract foreign investment. The focus on ICT and creative industries positions Uganda to tap into the global digital economy, creating opportunities for its youthful population.

While challenges remain—such as the administrative burden of universal TIN registration and the need for equitable enforcement—these initiatives signal a forward-thinking approach. As Mbaziira concluded, these reforms are part of a broader effort to create a transparent, inclusive, and resilient economic environment, with technology and accountability at its core.