Uganda’s Parliament has approved sweeping changes to the country’s gambling taxation system, introducing a single 30 percent rate across betting and gaming activities as part of broader fiscal measures tied to the 2026–27 national budget. The reform follows the passage of the Lotteries and Gaming (Amendment) Bill 2026 alongside updates to income tax rules that will also affect player winnings.

The new framework replaces the previous structure, where betting and gaming activities were taxed at different levels. Under earlier rules, casinos and similar gaming operations faced a 30 percent rate, while betting operators were taxed at 20 percent. Lawmakers have now aligned these segments under one uniform rate, citing the increasing overlap between products and platforms in the digital gambling environment.

The updated tax system will come into effect from July 1, placing additional financial obligations on both operators and players.

New Tax Structure Targets Industry Revenue

Authorities expect the revised approach to strengthen domestic revenue collection. Projections indicate the changes could generate approximately Shs24 billion annually, contributing to funding priorities within the upcoming financial year.

The reform also introduces a revised calculation method for determining tax liabilities. Instead of applying rates directly to gross figures, the system will calculate tax based on the total amount wagered minus payouts to players during a given period. Lawmakers included a formal definition of “payouts” in the legislation to eliminate ambiguity and reduce disputes over how tax obligations are assessed.

“The proposed tax is computed on net winnings as opposed to applying a uniform thirty percent Gross Gaming Revenue to both betting and gaming activities, including land based and live casinos,” the Committee stated while reviewing the bill in early April.

In addition to the unified rate, the Income Tax (Amendment) Bill 2026 introduces a 15 percent withholding tax on players’ net winnings. This measure applies directly to individuals participating in betting and gaming activities, further expanding the tax base.

Officials have framed the changes as part of a wider effort to simplify compliance procedures while improving the efficiency of tax collection across the sector.

Alongside fiscal reforms, authorities are advancing structural changes aimed at strengthening oversight of gambling transactions. A centralized payment system is under development, requiring all licensed operators to process wagers and payouts through a single gateway.

This system will operate under the supervision of the Bank of Uganda and will be connected to the Uganda Revenue Authority’s electronic platform. Regulators intend for the gateway to provide greater visibility into betting activity and reduce the scope for unreported transactions.

Operators who fail to comply with the requirement could face financial penalties. These penalties may include fines equivalent to double the applicable gaming or withholding tax, or a fixed amount of approximately UGX 110 million.

The centralized payment framework builds on earlier efforts to track activity through the National Central Electronic Monitoring System, which began recording real-time transactions in 2024. Authorities expect full enforcement of the payment gateway during the current financial cycle.

Market Growth Continues Amid Rising Tax Pressure

Uganda’s gambling sector has expanded steadily in recent years, driven largely by online betting. Data indicates that the interactive segment generated gross win revenue of $435.3 million in 2025, with projections suggesting the market could exceed $1 billion by 2029.

iGaming Business reports that betting remains the dominant segment, accounting for $341.2 million of the 2025 total. At the same time, offshore activity continues to represent a significant portion of the market, contributing more than 26 percent of total interactive gross win.

The introduction of higher and more uniform tax rates places Uganda among the jurisdictions with the heaviest gambling tax burdens in Africa. Similar adjustments have taken place in other regional markets, where authorities have introduced new levies on deposits, withdrawals, or winnings as part of broader revenue strategies.

Lawmakers acknowledged that the earlier two-tier system created inconsistencies within the industry. With digital platforms offering interconnected products, maintaining separate tax rates became more difficult to justify and administer.

The new legislation reflects an effort to address these challenges while securing additional government revenue. As the July implementation date approaches, operators and players will need to adapt to a system that reshapes both taxation and transaction oversight across Uganda’s gambling landscape.