The following are the investment incentives in mining sector in Uganda
Uganda Investment Authority (UIA)
UIA is under Ministry of Finance & Economic Planning and Economic Development put in place an Investment Code, 1991.
- The Code encourages private investment by streamlining procedures and guaranteeing protection of investors against appropriation. Foreign individuals and companies – own 100% of a business in Uganda (Mining companies inclusive
General investment incentives
Under the Income Tax Act, Cap.340 the mining companies are given special consideration through a Variable Rate Income Tax (VRIT). The rationale for this arrangement is to capture a competitive share of net cash flows for the government at different mine profitability levels while at the same time providing suitable tax relief for projects. A minimum of 25% and a maximum 45% VRIT have been put in place depending on the level of profitability.
Also under other tax provisions (like the East African Community Customs Management Act and Value Added Tax Act, Cap.349), there is the duty free importation of mining plant and equipment with VAT deferment facilities.
Other incentives are:
• Investment protection under the Multilateral Investment Guarantee Agency (MIGA)
• Mineral exploration expenditures are expensed 100%
• Import taxes such as customs duty for all mining equipment is zero-rated
• There is externalisation of dividends and profits
• Generous depreciation allowance at 30% for all depreciable mining assets.