What URA’s new tax amendments mean for Uganda’s Energy and Minerals Sector

By Humphrey Asiimwe

Every June, Ugandans go through a familiar ritual. The Minister of Finance reads a Budget Speech full of trillions and percentages, the public applauds or grumbles depending on which side of the tax line they sit, and then, a few weeks later, while everyone has moved on to arguing about something else, the Uganda Revenue Authority quietly publishes the document that actually matters to anyone running a business: the Tax Amendments booklet.

It rarely gets the fanfare of Budget Day, possibly because nobody has yet found a way to make withholding tax sound exciting on television.

The FY 2026/27 amendments, effective July 1, 2026, and targeting Shs44.18 trillion in domestic revenue, touch seven different tax laws. Most of the commentary so far has focused on what it means for the ordinary taxpayer, the welcome relief of a higher VAT registration threshold for small businesses, the widened tax-free income bracket, and the amnesty on old tax arrears.

All worthy of attention, and all genuinely good news, assuming you are not in the business of selling second-hand clothes, in which case URA has just found you and would like a word.

But buried in the schedules and justification columns are a handful of provisions that speak directly to the energy, oil and gas, and minerals sectors UCEM represents. They deserve more scrutiny than they have so far received.

Tucked into the VAT (Amendment) Act 2026, easy to miss between the cooking oil and the cement, is a single, understated line: the Minister may now, by regulation, prescribe the terms and conditions of payment of tax on inputs for the mining sector.

The justification given is equally brief, to encourage investment in the mining sector. No drama, no fireworks, just a quiet legislative door left slightly ajar.

Brief, but consequential.

For years, mining companies and explorers in Uganda have flagged VAT on capital inputs, drilling equipment, processing machinery, laboratory consumables, as one of the more painful working capital drags in the sector, particularly for juniors still years away from production revenue, and several years away from anyone besides their geologist believing in them.

This clause is the legislative door through which a genuine, sector-specific VAT deferral or input framework could walk.

Whether it becomes a meaningful relief mechanism or a paragraph that quietly gathers dust in a filing cabinet depends entirely on whether the mining sector shows up at the table when the regulations are drafted. UCEM intends to show up and intends to bring chairs for everyone else too.

Perhaps the most forward-looking provision in the entire package is the VAT exemption granted to contractors and subcontractors supplying goods and services to nuclear energy projects, a clear reference to the preparatory works underway at Buyende.

Uganda does not yet have a nuclear reactor. It now has a nuclear tax exemption.

We have, in other words, built the tax break before the power plant, which is either admirably proactive policy design or the fiscal equivalent of buying the wedding cake before finding a fiancée.

Either way, it tells us something important: Government is willing to use the tax code as a deliberate instrument to de-risk capital-intensive energy infrastructure before a single brick is laid.

If that logic holds for nuclear, the sector should be asking why it has not yet been extended, in some form, to the processing and value-addition infrastructure the minerals sector urgently needs, the smelters, refineries, and beneficiation plants that the Budget’s own Mineral-Based Industrial Development agenda is meant to deliver.

A tax incentive that works for one frontier energy technology is a template, not a one-off, and UCEM would be delighted to help Government photocopy it.

The Commissioner General’s foreword leads with the tax amnesty, and for good reason, because it is the closest thing URA has produced this year to an outright gift.

Principal tax, penalties, and interest outstanding as at June 30, 2016, are simply waived. For more recent arrears, accumulated interest and penalties on balances outstanding as at June 30, 2025, will be waived in full, provided the principal is paid by June 30, 2027. This is not a small gesture, and it is certainly not one URA makes twice a decade out of pure sentiment.

Energy and mining companies operating across long project cycles, exploration, feasibility, construction, and financing rounds frequently accumulate tax exposure that nobody quite gets around to resolving while the deal pipeline is hot, in the same way nobody gets around to servicing the company generator until the day it actually breaks down.

A clean tax position is also, increasingly, a condition precedent for project financing and an item on every credible due diligence checklist.

UCEM’s advice to members is unambiguous: treat June 30, 2027, as a hard deadline, not a soft suggestion, and use the window to clean house before it closes and before the goodwill that produced it evaporates along with it.

Less generous, but equally important, is the Tax Procedures Code’s new codification of the arm’s length principle for controlled transactions between associates, which is a polite, legally precise way of saying URA has had quite enough of related companies pricing things as though they were doing each other personal favours.

Multinational structures common in oil, gas, and large-scale mining joint ventures should read this as a formal sharpening of URA’s transfer pricing teeth, not a routine clarification.

Intercompany pricing on management fees, technical services, and intra-group financing arrangements deserves a fresh look before the July 1, 2026 effective date, not a retrospective scramble after an audit notice arrives looking for an explanation nobody quite has ready.

On the customs side, the one-year duty remission on galvanised slit coils, the input for galvanised iron and steel pipe manufacturing, from 25 percent (or USD 200 per tonne, whichever is higher) down to zero, is a small provision with an outsized logic, and frankly the most underappreciated line item in this entire booklet.

Energy and water infrastructure projects consume enormous quantities of pipe and casing. Cutting the input cost for local pipe manufacturers is, in effect, an indirect subsidy to every downstream infrastructure project that buys Ugandan steel instead of imported steel. It will not make headlines, and nobody is going to throw a launch event for a steel coil. It should still be welcomed, ideally with a small, dignified round of applause.

Tax policy is rarely glamorous, but it is where strategy quietly meets arithmetic, usually in a back room while everyone else is debating something louder. This year’s amendments tell a coherent story: Government is using the tax code to nudge capital toward the infrastructure it has decided matters, power generation, nuclear preparation, and local steel fabrication, while simultaneously tightening compliance expectations around transfer pricing and digital transactions to protect the revenue base that funds it all.

It is, in its way, a remarkably consistent piece of statecraft for a document that most people will never read past the executive summary.

For UCEM’s members, the task now is not simply to read the amendments, but to act on the two or three that matter most: engage early on the mining VAT input regulations before they are finalised, take the amnesty window seriously while it remains open, and tidy up transfer pricing documentation before, rather than after, the taxman comes calling, because he always calls eventually, and he is not known for his patience or his sense of humour.

Tax law amendments are easy to skim and easy to ignore, rather like the fine print on a loan agreement or the instructions on a flat-pack wardrobe. The companies that read them properly, and act on them early, tend to be the ones still standing, still compliant, and still on reasonably good terms with URA when the next set arrives.

The writer is the Chief Executive Officer of the Uganda Chamber of Energy and Minerals (UCEM).