Uganda Intensifies Tax Enforcement Amid Inactive Taxpayers  

Uganda is intensifying efforts to strengthen taxpayer compliance and improve domestic revenue mobilization following concerns that a significant portion of registered taxpayers remain inactive within the national tax system.

According to findings highlighted by the Auditor General, only a relatively small percentage of Uganda’s approximately 5.25 million registered taxpayers are actively filing returns and meeting ongoing tax compliance obligations.

Growing Tax Register but Low Active Compliance

While Uganda’s taxpayer register has expanded significantly in recent years, active participation within the tax system has remained comparatively low.

Reports indicate that active taxpayers range between approximately 1 million and 2.7 million, suggesting that a substantial number of registered Tax Identification Numbers (TINs) remain dormant or non-compliant.

During the 2024/2025 financial year alone, approximately 728,640 new taxpayers were added to the register. However, concerns remain that growth in registration is not translating into proportional revenue collection or improved compliance levels.

URA Directed to Clean Up Taxpayer Register

In response to the findings, the Uganda Revenue Authority (URA) has been directed to strengthen taxpayer compliance monitoring, identify dormant taxpayer accounts, and improve enforcement measures across high-risk sectors.

The exercise is expected to include verification of inactive accounts, review of filing behavior, and targeted compliance interventions aimed at increasing active participation within the tax system.

Increased Focus on Professionals

Professionals including lawyers, engineers, doctors, consultants, and other specialized practitioners are expected to face increased compliance scrutiny as part of the broader enforcement initiative.

The Auditor General’s findings indicate that professionals represent a key area of potential revenue growth, particularly because many do not qualify under presumptive tax arrangements and are expected to maintain formal tax compliance.

Informal Sector Challenges

Uganda’s large informal sector continues to present significant tax administration challenges. Estimates suggest that approximately 10 million individuals could potentially participate within the tax system, indicating substantial untapped revenue potential.

However, limited record-keeping, informal business operations, and low compliance awareness continue to affect tax collection efforts and enforcement effectiveness.

Business Implications

The developments highlight the growing importance of proactive tax compliance, accurate taxpayer registration, proper record management, and timely filing of tax returns.

Businesses and professionals should review their compliance status, filing obligations, tax registration details, and documentation processes to ensure alignment with evolving enforcement expectations and regulatory requirements.

Organizations operating within sectors considered high-risk or under-monitored may experience increased compliance reviews and enforcement activity as URA continues efforts to strengthen revenue collection and expand active taxpayer participation.

“Sustainable revenue growth depends not only on expanding taxpayer registration, but also on strengthening active compliance and accountability.”