Uganda’s tax body turns up the pressure on businesses and their banks

Uganda’s tax authority has issued a wave of demand notices to businesses and begun requesting customer information from commercial banks, as it races to meet sharply higher revenue targets.

Since June, the Uganda Revenue Authority (URA) has sent out more than 1,000 compliance notices, most of them tied to unpaid taxes, according to The East African, which first reported the campaign. The drive has raised concerns about the financial health of businesses, the pressure now bearing down on collectors, and the limits of what banks can lawfully hand over.

One letter, dated 27 July, went to Standard Chartered Bank Uganda seeking information on a local steel company facing a five-year audit covering December 2020 to December 2025. According to documents seen by the paper, URA asked for bank statements over the period, personal identity details of the company’s directors, and correspondence between the bank and its client.

Another notice, sent to a pharmaceutical distributor, referred to a review of returns filed between June 2024 and June 2025 and carried a fresh demand for value-added tax running into billions of shillings.

The requests sit at an awkward legal junction. URA’s powers to gather information are grounded in the Tax Procedures Code Act. But the Data Protection and Privacy Act, 2019 bars regulated firms — banks, insurers, telecoms and audit firms among them — from sharing personal data with third parties without the owner’s consent or a court order. How those two laws are reconciled is likely to shape how far the campaign can reach. URA officials were unavailable for comment.

The intensity reflects mounting fiscal pressure. Uganda’s tax collection target has risen from about Shs36.7 trillion ($9.6bn) in the 2025/26 financial year to Shs40 trillion ($10.7bn) in 2026/27. In the first 10 months of the previous year, tax and non-tax revenue fell short by about Shs1.5 trillion ($401.6m).

A source at the audit firm Deloitte suggested URA was seizing on errors identified in tax ledgers to pursue the businesses concerned.

Some in the private sector describe an economy still finding its feet. Tony Bocana, a small business owner in Kampala, said many small firms were struggling to make sales, though he acknowledged that some were exploiting loopholes. He said certain traders had used the Uganda Registration Services Bureau’s deregistration of dormant companies to escape old tax bills — an escape URA may yet chase down.

Analysts expect collections to keep climbing. Alexander Venter, an economist at Oxford Economics Africa, projected that tax on income, profits and capital gains alone could reach about Shs12.1 trillion ($3.2bn) in 2026/27, and forecast overall government revenue rising by roughly 13% on the year. He linked the outlook to solid economic activity and the expected start of commercial oil production later this year.

For now, the campaign leaves businesses caught between a tax authority under orders to collect more and banks bound by a privacy law that limits what they can disclose — a tension unlikely to ease as the year’s targets bite.