- Uganda proposes three-year income tax exemption for startups
- Measure part of 2025 Income Tax Bill aims to boost entrepreneurship and innovation
- Builds on past state initiatives like the National ICT Support Program and Innovation Hub
Ugandan startups may soon receive a three-year income tax exemption aimed at accelerating the nation's startup ecosystem. The measure, part of proposed amendments to the 2025 Income Tax Bill announced last week, seeks to spur entrepreneurship, support small and medium-sized enterprises, and bolster innovation.
The government has previously launched initiatives to support startups, including the National ICT Initiatives Support Program, which helps Ugandan ICT innovators overcome hurdles to entering local and international markets. Additionally, the state established the National ICT Innovation Hub, providing stable internet connectivity and dedicated workspace for tech entrepreneurs.
Private sector efforts, including those by telecom operators and accelerators like Stanbic Business Incubator, Innovation Village, Hive Collab, and Outbox Hub, also contribute to the country’s entrepreneurial growth.
Uganda currently ranks third in East Africa and 95th globally, according to StartupBlink's 2024 "Global Startup Ecosystem Index." Kampala, the capital, holds the 368th position out of 1,000 cities worldwide, and is home to startups such as Tugende, SafeBoda, Numida, and Rocket Health.
StartupBlink, however, recommends diversifying Uganda’s startup ecosystem, which it deems too Kampala-centric. Developing regional hubs would accelerate sector growth, the organization said. It also stressed the need for stronger collaboration among stakeholders to prevent fragmentation that could limit the country’s potential. Furthermore, it advocated for a robust regulatory framework and incentives to attract more investment and stimulate startup growth. National ecosystem investment totaled $10.6 million in 2023, a 60.4% drop from the $26.8 million recorded in 2022.
By Isaac K. Kassouwi,
Editing by Sèna D. B. de Sodji
