In a move aimed at improving investment in eco-friendly transportation, the Ugandan Parliament has approved an amendment to the Stamp Duty Act granting exemption to companies manufacturing electric vehicles, batteries, charging equipment, and fabricators of electric vehicle frames and bodies. The exemption, part of the Stamp Duty (Amendment) Bill, 2024, passed on May 6, 2024, underscores the government’s commitment to fostering sustainable development and local job creation.
To qualify for the exemption, companies must employ at least 80 percent Ugandan workers and utilize a minimum of 80 percent locally sourced raw materials, contingent upon availability. Additionally, foreign investors are required to have a minimum investment capital of US$10 million, while citizens must invest US$300,000, or US$150,000 for investments in upcountry regions.
The Chairperson of the Committee on Finance, Amos Kankunda, emphasized the measure’s intent to incentivize investment in environmentally friendly transportation solutions within Uganda. Lawmakers hailed the initiative, noting its potential to harness Uganda’s abundant resources, including herbs, and promote youth engagement in science and innovation.
However, dissenting voices, including Shadow Minister of Finance Hon. Ibrahim Ssemujju, raised concerns about the effectiveness of tax exemptions, citing Auditor General reports indicating underperformance in job creation by previous beneficiaries. Despite dissent, the Parliament proceeded to approve the amendment, emphasizing the need for comprehensive studies on tax exemptions’ impact.
In a related development, the Parliament also approved a proposal for stamp duty exemption on shares or securities by investors in private equity or venture capital funds regulated under the Capital Markets Authority Act. Minister of State for Finance, Planning, and Economic Development, Hon. Henry Musasizi, highlighted the measure’s potential to stimulate economic growth and attract capital investment, particularly in emerging sectors such as private equity and venture capital.
Legislators further passed the Tax Procedures Code (Amendment) Bill, 2024, which mandates taxpayers intending to claim deductions or credits for destroyed goods to inform the Uganda Revenue Authority’s Commissioner General beforehand, ensuring greater transparency and compliance in tax procedures.
