Auditor General, Edward Akol, has revealed that Uganda collected just UGX 29.583 billion in Digital Service Tax (DST) during the 2024/25 financial year, far below the UGX 100 billion annually projected by government.
The shortfall, Akol noted, is largely due to the Uganda Revenue Authority’s (URA) inability to independently verify the accuracy and completeness of tax declarations submitted by non-resident digital companies.
The findings are contained in the December 2025 Auditor General’s report, which was tabled before Parliament last week. The report further indicates that several well-known digital service providers are not paying the tax, raising concerns about enforcement gaps in Uganda’s rapidly expanding digital economy.
Akol warned that URA is currently entirely dependent on self-declarations by foreign digital firms, leaving the tax authority blind to actual transaction values.
“I noted that during the year 2024/25, UGX 29.583 billion was collected from non-resident digital service providers through Income Tax and VAT. Although some non-resident digital service providers submitted tax returns under the Digital Service Tax regime, URA lacked a mechanism to verify the accuracy or completeness of the declarations,” Akol stated.
“In effect, URA is entirely reliant on self-declarations by the non-resident service providers.”
According to the report, the UGX 29.583 billion was collected from 82 non-resident digital service providers, but the Auditor General observed that the list of compliant companies was not exhaustive, as it excluded several known global digital platforms operating in Uganda.
The report cautions that the lack of visibility into payments made to non-resident digital service providers significantly undermines government’s ability to fully assess, collect, and enforce digital taxes.
To address the loopholes, stakeholders have renewed calls for the Bank of Uganda to fast-track the establishment of a single national payment gateway, which would enable authorities to track payments to digital service providers and strengthen tax compliance.
