New PAYE tax commencing next week (opens original article in a new tab)

Uganda implements new PAYE tax reforms in July 2026, raising the tax-free threshold and introducing a lower middle-income tax rate, but critics say the changes are insufficient to address economic challenges.

• Uganda introduces new PAYE tax adjustments effective July 1, 2026, including a higher monthly tax-free threshold of 335,000 shillings.
• A middle-income tax bracket of 25% is introduced for earnings between 410,000 and 485,000 shillings per month, reducing tax for some earners.
• Critics argue the new threshold is still too low and the 40% tax rate for high earners may hinder economic growth and competitiveness.