Uganda Introduces Three-Year Startup Tax Exemptions to Fuel Innovation

Kampala,Uganda
In an ambitious move to bolster the country’s digital economy, the government of Uganda has proposed a three-year income-tax exemption for eligible startups, under amendments to the 2025 Income Tax Bill.
The measure aims to accelerate entrepreneurship and innovation, especially in sectors such as FinTech, AgriTech, HealthTech and sustainability-oriented ventures. A statement from the Ministry of Trade, Industry & Cooperatives emphasised that the exemption complements existing initiatives like the National ICT Initiatives Support Program and the National ICT Innovation Hub.
For Uganda’s startup community, this is significant. Startups often cite tax burdens and regulatory uncertainty as major obstacles. With this incentive, early-stage firms may have more breathing room to scale. However, eligibility criteria, enforcement, and access to broader ecosystem support (mentorship, financing, market access) will determine how impactful the policy will be.

From a broader perspective, the policy signals Uganda’s attempt to position itself more strongly within Africa’s technology shift. With cities like Kampala already being recognised among fast-growing tech hubs (see below), this tax initiative could further enhance the country’s attractiveness to local and international investors.
Why it matters:

For tech founders: an incentive to launch/expand ventures in Uganda rather than relocate.

For investors: clearer signal that government is supportive of innovation, possibly reducing risk.

For the economy: jobs, productivity gains, export potential.

For the urban-reader/audience: potential new services, local innovation, and maybe a rising “startup culture” in Kampala and beyond.