Parliament has passed the Income Tax (Amendment) Bill, 2026, rejecting a government proposal to tax income earned and sent home by Ugandans living and working abroad.
Parliament sitting on Thursday, 23 April, 2026 and presided over by Speaker Anita Among also rejected the government proposal to tax gains from the sale of non-business assets, including land, jewelry, and other personal property.
The Income Tax (Amendment) Bill, 2026 and the Lotteries and Gaming (Amendment) Bill, 2026 are only two of the bills considered and passed by Parliament intended to provide ways through which government will raise revenue to fund the national Budget of the 2026/2027 financial year.
The Chairperson of the House Committee on Finance, Amos Kankunda, who presented the reports on the bills said that in giving their proposals, the committee aimed to “balance revenue mobilisation with economic growth and taxpayer protection,” recommending expansion of the tax base while removing provisions seen as impractical or punitive.
The committee recommended deletion of the proposal to tax income from the disposal of non-business assets, citing difficulty separating personal from commercial transactions.
“Non-business assets are usually disposed of for personal reasons, for instance payment of medical bills… and these therefore should not constitute a tax base,” Kankunda said.
Hon. Karim Masaba (Ind., Industrial Division, Mbale City) warned that the government proposal was too broad.
“If I sell my TV at home and I earn a profit, you want to tax that,” he said.
The State Minister of Finance Planning and Economic Development (General Duties), Hon. Henry Musasizi defended the proposal, arguing that it targeted disguised business transactions. He later admitted enforcement challenges in distinguishing personal from business sales, after which Parliament dropped the clause.
On the move to tax income earned by Ugandans working out of the country, legislators warned that this would unfairly affect low-income migrant workers in the Middle East.
Masaba said many Ugandans abroad earn small incomes under harsh conditions and support families back home, warning against taxing them without safeguards.
Concerns were also raised that expanding withholding tax on offshore arrangements could undermine investor confidence and reduce access to international financing for infrastructure and industry.
Parliament unanimously approved a six-year extension of the tax exemption for the Bujagali Hydropower Project up to 2032, arguing removal would increase electricity tariffs.
“I think the President needs to be explained further to understand this… this is not coming from the Consolidated Fund but from excess charges imposed on Ugandans,” said Nandala Mafabi.
Among the reforms is the inclusion of software under royalties, bringing digital services into the tax net in line with the digital economy.
The Bill also exempts employees earning Shs335,000 per month from Pay As You Earn (PAYE) and reduces the minimum investment threshold for Ugandan hotel developers from US$5 million to US$1.5 million to boost tourism investment.
Parliament also passed the Lotteries and Gaming (Amendment) Bill, 2026, harmonising tax rates across the gaming sector and standardising the treatment of gambling activities.
