Uganda reduces import duty on fabrics, garments

The announcements came in the budget presentation for fiscal 2025-26 by finance minister Matia Kasaija.

Starting July 1, the import duty on fabrics will drop to $2 per kg, or by 35 per cent, whichever is higher, down from the previous $3 per kg.

In addition, the duty on imported garments will decrease to $2.5 per kg, or by 35 per cent, down from $3.5 per kg.

The measures are expected to help traders engaged in value addition and stimulate further growth in the textile sector, according to domestic media reports.

The government said these tax cuts and incentives are part of a broader strategy to stimulate the economy, create jobs and enhance the country’s position as an attractive destination for investment.

These are aimed at fostering innovation, supporting local industries, and stimulating the country’s economic growth.

A three-year income tax holiday for businesses established by Ugandan citizens will be implemented from July 1. The initiative is designed to ease the burden of high initial investment costs that often hinder the growth of start-ups.

This tax incentive, Kasaija said, will foster innovation, support the formalisation of small and medium enterprises, and improve business survival rates.

ALCHEMPro News Desk (DS)