Date: 3 June 2024

Uganda Ministry of Finance proposes an amendment to the Income Tax Act to exempt income derived from or by private equity or venture capital funds registered and regulated in Uganda

The Ministry of Finance has proposed amending section 21 of the Income Tax Act to exempt income derived from or by private equity (PE) or venture capital (VC) firms in Uganda, regulated by the Capital Markets Authority (CMA), from income tax. If approved by the Parliament of Uganda, the proposed amendment will take effect on 1 July 2024.

The Ministry of Finance has also proposed an amendment to the Stamp Duty Act to exempt payment of stamp duty on shares acquired by PE or VC capital firms regulated by the CMA. Stamp duty would also be exempted on the transfer of shares by PE or VC firms to other PE or VC firms in Uganda.

The proposed amendments aim to create a more attractive investment climate for PE and VC funds in Uganda. They are welcomed as a step in the right direction for incentivizing PE and VC firms to increase investment in Uganda. Verdant Capital opened a local office in Kampala, Uganda, in March 2023, led by Rafiq Suleman, Vice President. Verdant Capital was ranked joint 2nd by deal flow in 2023 in the prestigious DealMakers Africa M&A leagues tables for the East Africa region overall. This is the fourth successive year that Verdant Capital has been placed in the top three in East Africa. Verdant Capital also won joint 2nd place overall in the pan-Africa (ex-South Africa) region. Verdant Capital has been placed in the top five in the Pan-Africa region for three consecutive years.  

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