URA headquarters in Nakawa, KampalaThe recently circulated information that the government planned to raise income tax (Pay-as-You-Earn), later dismissed as false, reignited debate over Uganda’s tax system which overburdens a few and leaves out the majority.Ugandans, especially taxpaying citizens, are always worried about the next budget introducing new taxes. This is because of the view that the few taxpaying Ugandans always bear the impact of new tax measures. Calls for and efforts at increasing the number of taxpayers seem to be slow at bearing fruit, with many Ugandans, especially businesses continuing to stay out of the net.As of June 30, 2025, the Uganda Revenue Authority (URA) had more than 5.2 million registered taxpayers on its register.However, according to the latest Auditor General’s Report, only about 2.7 million are active taxpayers, while just about 1 million are fully compliant. There has been a rapid expansion of the register, with more than 700,000 persons added to the register in just the last year alone, and the URA drive is thought to have added more non-paying but eligible Ugandans through systems like the Tax Identification Number (TIN).Yet URA says there are 10 million potential taxpayers, meaning that the tax base by number of persons, should be double what it is today. All this has been blamed on the large but largely informal private sector which accounts for about 54.8 percent of the economic output as of 2023/2024, and employs more than 80 percent of the population. Many would-be taxpayers operate informally and either avoid registration and/or compliance or slip through despite being listed. The Government, through the 4th National Development Plan aims to reduce the size of the informal sector to 41.5 percent of GDP by 2030, mainly by focusing on formalisation and registration of small and medium enterprises to bring them into the net.According to the just released Microeconomic Indicators and Developments by the Ministry of Finance, Planning and Economic Development, several steps have been taken to meet the commitments in the NDPIV.To strengthen the legal and regulatory frameworks to promote formalization and business registration, the Companies (Fees) Regulations 2024, have been amended, revising the fees for registering, searching, and certifying company documents.The core registration fees at Uganda Registration Services Bureau (URSB), is now UGX 35,000 for name reservation while the registration fee for a company with nominal share capital up to UGX 5 million UGX 105,000.For nominal share capital above UGX 5 million, the coat is 1.5 percent of the capital, while for a company limited by guarantee, the fee is UGX 105,000. The reforms also included promotion of automated and digitalized registration processes to enhance efficiency and service delivery.This is through rolling out the Online Business Registration System (OBRS), which the Ministry says has simplified registration, making it efficient and faster, taking up to four hours to complete registration. The operationalisation of the Trademark front office system in 2022/23 eased the Trademark and Industrial Design end-to-end processes which are now entirely online.In financial year 2024/25, Trademark registrations totaled 3,138 registrations, including 1,476 local registrations and 1,662 foreign registrations, according to URSB. Business registration has also been enhanced by a nation-wide Mass Business Registration initiative (dubbed KiriEasy in 2023/24, which was aimed at extending registration services to the local communities, promoting benefits of formalization and expanding the national business register.This, according to URSB led to the registration of 3,195 businesses in its first year, 6,856 in the second phase, (2024/25), and the third phase this financial year is plans to add over 235,000 new businesses.The establishment of the Uganda Business Facilitation Centre (UBFC) in Kololo, was also aimed to simplify and speed up business and investment processes, streamlined licensing and registration for businesses and investors, including free investment licenses and tax incentives.The Ministry’s Microeconomic Outlook shows that business registrations are expected to increase modestly, driven by reduced compliance costs, digitalized registration processes and improved access to coordinated services such as the UBFC One Stop Centre. Last financial year, the number of Company, Business Name and Building Society Reservations increased by 17.8 percent to 115,163. However, the number of new companies registered slightly reduced by 0.02 percent to 28,408.Similarly, the number of Business Names registered reduced by 20.5 percent from 27,297 in 2023/24 to 21,695 in 2024/25, while Copyright registrations increased by 42.7 to 117. Local trademark registrations increased by 18.9 percent to 2,363 last year.-URNThe post 5.2M Taxpayers, Only One Million Compliant: Tackling Uganda’s Tax Burden to Match Expanding Taxpayer Register appeared first on Business Focus.