Manufacturers of electric vehicles, batteries, charging equipment, or bodies and frames of electric vehicles, who employ at least 80 percent Ugandan workers, will be exempt from paying Stamp Duty Tax in the 2024/2025 fiscal year.
This exemption is part of the changes introduced in the Stamp Duty (Amendment) Bill, 2024, which was approved during the parliamentary session on Monday, May 6, 2024, presided over by Speaker Anita Among.
According to the Bill, companies seeking this exemption must demonstrate their ability to utilize at least 80 percent locally sourced raw materials, subject to availability.
Chairing the Committee on Finance, Planning, and Economic Development, Hon. Amos Kankunda, emphasized that companies must also meet specific investment thresholds, with foreign investors required to have a minimum capital investment of US$10 million, while citizens must invest a minimum of US$300,000, or US$150,000 for investments in rural areas.
“This initiative aims to encourage investment in environmentally friendly transportation solutions in Uganda,” he stated.
Hon. Nathan Nandala-Mafabi (FDC, Budadiri County West) praised the move, noting Uganda’s abundance of natural resources, particularly herbs, which could be utilized by manufacturers.
Hon. Remigio Achia, Member of Parliament for Pian County, welcomed the exemption, citing the increasing involvement of youth in science and innovation.
Hon. Karim Masaba (Indep., Industrial Division, Mbale City) supported the exemption, highlighting its potential to create employment opportunities for Ugandans and bolster citizen welfare.
However, Kira Municipality MP, Hon. Ibrahim Ssemujju, expressed reservations about the committee’s report, referencing concerns raised by the Auditor General regarding the effectiveness of tax exemptions in promoting employment.
Meanwhile, Butambala County MP, Hon. Muhammad Muwanga Kivumbi, called for thorough assessments of companies seeking tax exemptions to prevent misuse and ensure that exemptions align with government objectives.
Additionally, legislators approved a proposal for Stamp Duty exemption on shares or securities invested in private equity or venture capital funds regulated under the Capital Markets Authority Act.
Minister of State for Finance, Planning, and Economic Development (General Duties), Hon. Henry Musasizi, emphasized that this move would stimulate economic growth and attract investment, citing the need to remain competitive with neighboring countries like Kenya and Tanzania.
Hon. Dicksons Kateshumbwa (NRM, Sheema Municipality) echoed support for the minister’s remarks, advocating for reduced taxation to encourage investment.
In another development, lawmakers passed the Tax Procedures Code (Amendment) Bill, 2024, aimed at ensuring that taxpayers intending to claim deductions or credits for destroyed goods inform the Commissioner General of the Uganda Revenue Authority before destruction occurs.
