Uganda Hosts Training for Free Zone Entrepreneurs on Taxes and Exports

The Uganda Free Zones and Export Promotions Authority (UFZEPA) and the Uganda Revenue Authority (URA) recently hosted a training workshop for Special Economic Zones (SEZs) and Free Zones operators in Uganda. The workshop aimed to educate business owners on customs rules, tax incentives, and digital tax tools to ensure they take full advantage of tax perks while staying legally compliant. This training is organized twice a year to promote value addition for export and encourage local product processing.

The free zone scheme in Uganda allows businesses to operate outside the standard customs territory for tax purposes, enabling them to import machinery, equipment, and raw materials duty-free. Rebecca Nalumu Wamono, Senior Manager for Special Economic Zones Operations and Compliance at UFZEPA, emphasized the importance of tax awareness for free zone developers and operators. She highlighted that understanding tax obligations and incentives can help businesses comply with tax requirements, invest, and create employment opportunities.

Businesses in an Export Processing Zone (EPZ) must export at least 80% of their total annual production, while companies operating under a Free Port license can sell 100% of their goods locally, provided all required taxes are paid. Wamono also stressed the importance of "backward linkages" to encourage free zone factories to buy raw materials directly from local Ugandan suppliers. This can help keep money circulating within Uganda and promote local economic growth.

To access tax exemptions, businesses must obtain an official developer or operator license from UFZEPA, and their operational site must be formally gazetted by law. Wamono also suggested that tax amendments and transformations should support free zones to source locally by zero-rating the value-added tax. This can help reduce costs for local suppliers and encourage them to sell goods to free zone factories.

The URA is using smart technology to make tax compliance effortless for businesses. Seguya Hafsah Nabachwa, Supervisor for Tax Education at URA, guided participants through automated digital systems built to save businesses time and money. The URA is now prefilling monthly VAT returns automatically using data from the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) invoicing app and The Automated System for Customs Data (ASYCUDA) customs platform.

The URA is also waiving old unpaid tax debts originating from before June 30, 2016, that remained unpaid as of July 1, 2026. Additionally, the URA revised penalties for non-usage of EFRIS receipts from heavy flat rates down to double the tax amount on an un-fiscalized transaction. These changes aim to reduce the tax burden on businesses and encourage compliance.

By combining UFZEPA's drive for local supplier integration with URA's digital prefilling tools, Uganda is creating a transparent, tech-driven business environment where industries can flourish and expand exports globally. The training workshop has equipped free zone entrepreneurs with the knowledge and skills to navigate tax compliance and take advantage of digital tools, ultimately promoting economic growth and development in Uganda.

Key points

• The Uganda Free Zones and Export Promotions Authority partnered with the Uganda Revenue Authority to host a training workshop on tax compliance and digital tools for free zone entrepreneurs.
• Businesses in an Export Processing Zone must export at least 80% of their total annual production, while companies operating under a Free Port license can sell 100% of their goods locally.
• The Uganda Revenue Authority is waiving old unpaid tax debts and revising penalties for non-usage of EFRIS receipts to encourage tax compliance.