Uganda's new tax policy links National IDs to TINs to improve tax compliance

Kampala, Uganda — The Ugandan government has introduced a new policy that will use national identification numbers (NINs) as the official tax identification numbers (TINs) for individuals. This policy is outlined in the Tax Procedures Code (Amendment) Bill, 2025, which was announced in the Uganda Gazette on March 25 and is currently under discussion in Parliament.

The bill specifies that individuals will use a national identification number issued by the National Identification Registration Authority for tax purposes, while non-individuals will use a registration number from the Uganda Registration Services Bureau.

Set to be implemented from July 1, 2025, this change aims to unify taxpayer data and enhance compliance by directly linking people and businesses to the central tax system. Foreign taxpayers from countries that have tax agreements with Uganda will continue to use their own countries' tax identification numbers.

The legislation also introduces stringent requirements for accessing government services. It mandates that local authorities and government bodies cannot issue business licenses or authorizations to any entity without a valid national identification or registration number.

This move addresses ongoing challenges in Uganda's tax collection. The Uganda Revenue Authority (URA) is tasked with collecting UGX 29.7 trillion for the fiscal year 2024/2025. Tax evasion, which results in a loss of over UGX 5 trillion annually, remains a significant problem.

To combat this, URA has collaborated with Global Voice Group to deploy the Tax Information Management System (TIMS) and Data Monitoring System (DMS). These technologies enhance compliance by verifying taxpayer declarations against third-party data, thereby reducing fraud and improving the accuracy of tax records.

Despite these advancements, tax collection from the informal sector remains problematic due to poor enforcement and inadequate data sharing between agencies. The new bill seeks to improve this situation by requiring a centralized register for all non-individual entities and mandating that all tax-related documents include an identification number.

Finance Minister Matia Kasaija introduced the bill as part of a broader effort to improve tax compliance and reduce revenue losses. However, the implementation of this policy faces challenges, especially in rural areas where access to national ID services is limited. Civil society groups have advocated for more extensive registration services and stronger data protection measures to be established before the bill is enforced.

If approved, the Tax Procedures Code (Amendment) Act, 2025, will be a crucial step in Uganda’s digital transformation and its efforts to enhance domestic revenue collection more effectively.