URA Gives Taxpayers Last Chance to Clear Debt without Penalty, Interest

The Uganda Revenue Authority (URA) has given taxpayers a last chance to clear their debt, without having to deal with penalties and interests.

The New waiver under the Tax Procedures Code Act Section 47B is another opportunity the government has given to Taxpayers who have tax arrears to settle their liabilities without worrying about the burden of interest and penalty.

UR Commissioner General John Musinguzi Rujoki confirmed the opportunity to have the burden on the taxpayers reduced.

“The government recognizes the challenges taxpayers face and offers this waiver as an incentive for voluntary compliance. We also noted that most taxpayers had missed out on the previous two waivers due to cash constraints making it difficult to settle their tax obligations within the limited waiver period. We have now granted you one full financial year i.e. from July 2025 to June 2026 to enable you plan better,” said URA CG Musinguzi.

He, however, appealed to taxpayers to “demonstrate responsibility by taking advantage of this waiver, and the government will reward you by waiving the additional charges.”

“Voluntary Compliance of taxpayers is expected to improve significantly. For many businesses, the accumulation of tax penalties and interest can be a significant burden, sometimes leading to tax evasion or avoidance. The waiver, particularly of penalties and interest, reduces this financial burden, making it easier for taxpayers to bring their obligations up to date and comply with tax laws. This is expected to improve overall compliance rates since taxpayers are more likely to pay their taxes when they have the opportunity to reduce the amount due through the waiver,” he added.

Dennis Kugonza, the Commissioner Domestic Taxes at the URA explained that the waiver applies to all domestic taxes including; Income tax, value added tax, Local excise duty, Rental tax, Gaming tax and others.

However, he added, it does not cover Customs taxes and duties.

“So, if you have any outstanding domestic taxes for the periods specified, you can clear them without worrying about additional interest and penalties. Every taxpayer with outstanding principal tax under domestic taxes as at 30th June 2024 qualifies for the waiver,” said Kugonza.
According to Kugonza, the waiver doesn’t cover deterrent penalties that are not based on principal tax. These, he said are; Penal tax in relation to digital tax stamps; Penal tax in relation to non-compliance with EFRIS; Penalty for failing to apply for registration; Penal tax for failure to provide information; and Court imposed penalty and interest.

“These penalties and related interest will continue to accrue even if you settle your principal tax by the 30th June 2026 deadline until they are paid. Therefore, it’s important to understand what is and isn’t covered by the waiver when planning your payments,” he added.

Kugonza said that the waiver shall expire by 30th June 2026.

“If you fail to settle your outstanding principal tax by the deadline, the waiver will not apply, and you will be required to pay the principal tax including accrued interest and penalties. It’s important to act promptly to avoid this,” he explained. “If you pay a portion of your outstanding principal tax by 30th June 2026, the interest and penalty related to the portion you paid will be waived proportionately. For example, if you pay 50% of your principal tax, then 50% of the corresponding interest and penalties will be waived.”

To determine if you qualify for the waiver and find out what you owe, simply log into your URA account on the URA portal (www.ura.go.ug) by using your Tax Identification Number (TIN) and password. Once logged in, go to the “Reports” section, click on “Tax Statement” and then “Submit” to view your outstanding tax liability, including the principal tax, penalties, and interest per tax type.