Uganda is exempting the imposition of value-added tax (VAT) on textile inputs.
The proposal is contained in the Value-Added Tax (Amendment) Bill 2025.
The Bill outlines the textile inputs for exemption as wet processing operations and garmenting, cotton lint, artificial fibres for blending, polyester staple fibre, and viscose.
Other textile inputs include textile dyes and chemicals, garment accessories, textile machinery spare parts, industrial consumables for textile production, and textile manufacturing and equipment.
The proposed amendments also include VAT exemptions on solar lanterns, deep cycle batteries, and raw materials for the manufacture of deep cycle batteries and solar lanterns.
Also exempted is VAT on biomass pellets, with the justification that this will promote environmental sustainability by encouraging the adoption of cleaner, energy-efficient cooking and heating solutions, hence reducing reliance on traditional biomass fuels.
The Bill also proposes a zero tax rate on aircraft supply.
According to the State Minister of Finance (General Duties), the exemptions are intended to boost local production, reduce reliance on imports, and advance Uganda’s industrialization agenda.
“By supporting domestic manufacturing, these measures are expected to create jobs, enhance value addition, and stimulate economic growth,” said the minister.
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