Betting, casinos, and gaming have rapidly evolved into a major business sector in Uganda, generating substantial revenue, creating employment, and attracting both domestic and foreign investment.
However, beneath this growth lies a persistent concern over tax evasion and revenue leakage, with government authorities warning that the country is losing significant income due to under-declaration and non-compliance within the industry.
Investigations and available reports indicate that some betting companies operate without proper licensing or fail to fully register with the Uganda Revenue Authority (URA), allowing them to bypass key tax obligations. Even among licensed operators, there are cases of incomplete registration across required tax categories.
Additionally, under-reporting of revenue remains a major issue, with some firms declaring minimal or inaccurate figures for stakes, winnings, and overall income, thereby reducing their taxable base. The reliance on self-assessment systems further creates opportunities for manipulation.
The widespread use of cash transactions and non-centralised payment systems has also made monitoring difficult. Informal handling of bets and payouts often leaves little or no digital trail, weakening enforcement efforts. Legal loopholes and limited regulatory oversight, particularly in rural areas, have enabled illegal and unlicensed operations to persist. In some cases, the absence of integrated payment systems linked to regulators allows companies to understate payouts and profits.
The impact of these practices is significant. Government revenue losses undermine the country’s ability to fund essential public services such as healthcare, education, and infrastructure. At the same time, compliant operators are placed at a competitive disadvantage, distorting the market. Non-compliant firms also face increasing risks of penalties, legal action, and possible closure as authorities intensify enforcement efforts.
In response, the government has introduced a series of reforms aimed at strengthening oversight and improving tax compliance. The Lotteries and Gaming (Amendment) Act, 2023 increased gaming tax rates from 20 percent to 30 percent for certain operations and addressed ambiguities around withholding tax on winnings. Proposed amendments under the Tax Procedures Code seek to require all betting transactions, including stakes and payouts, to pass through a centralised payment gateway licensed by the Bank of Uganda and integrated with URA systems for real-time monitoring. These measures are intended to enhance transparency and reduce unreported transactions.
The reforms also introduce stricter penalties for non-compliance, including fines equivalent to double the tax owed or up to 5,500 currency points, whichever is higher. Authorities are expanding enforcement efforts nationwide to capture illegal operations, while new measures such as the use of National Identification Numbers (NIN) as Tax Identification Numbers (TIN) aim to improve traceability of financial transactions.
Despite these efforts, challenges remain. Smaller operators may struggle with the cost and technical requirements of compliance, potentially pushing some into informal operations. Regulatory bodies must also strengthen their capacity in terms of technology, personnel, and monitoring systems. There is also the risk that some firms may adopt more sophisticated tax avoidance strategies or pass increased costs on to consumers.
Experts suggest that further measures are necessary to ensure the effectiveness of these reforms. These include stronger auditing mechanisms, mandatory licensing and registration for all operators, support for small businesses transitioning to compliant systems, enhanced collaboration with financial institutions and mobile money providers, and continuous review of tax laws to close emerging loopholes.
Tax evasion in Uganda’s betting industry remains a critical fiscal and regulatory challenge. While recent reforms signal a strong commitment by government to address the issue, their success will depend on effective implementation, institutional capacity, and the ability to bring all operators into compliance. Ensuring transparency and accountability in the sector will be essential for safeguarding public revenue and maintaining a fair and competitive business environment.
