Mbarara City, Uganda — Local manufacturers in western Uganda are raising alarm over what they describe as a harsh and unpredictable tax regime, warning that it is driving small and medium enterprises out of business.
Industry players, under the Uganda Manufacturers Association (UMA), say increasing tax pressure has forced several businesses to shut down or relocate to neighboring Kenya in search of a more favorable operating environment.
According to Gilbert Kibekityo, a researcher and policy analyst at UMA, Uganda lost about 40 local manufacturing businesses in the past year alone, a trend he says poses a serious threat to the country’s industrial growth.
“Heavy and inconsistent taxation is squeezing small and medium manufacturers, making it difficult for them to survive,” Kibekityo noted.
He called on the Uganda Revenue Authority (URA) to adopt a more transparent and balanced taxation approach that supports business sustainability while ensuring government revenue collection.
Manufacturers argue that the current system not only undermines industrial development but also has ripple effects on consumers, including higher prices and reduced availability of locally produced goods.
Stakeholders warn that unless urgent reforms are implemented, Uganda risks losing more enterprises, jobs, and investment to regional competitors.
They emphasize that a fair and predictable tax regime would help stabilize the manufacturing sector, boost investor confidence, and promote long-term economic growth.
