Uganda Proposes Tax Recognition for IAEA to Support Nuclear Energy Plans
The Ugandan government is advancing legislation to formally recognize the International Atomic Energy Agency (IAEA) under its Income Tax Act, a move aimed at deepening collaboration in the country’s nuclear energy ambitions.
The proposal was presented in the Income Tax (Amendment) (No. 2) Bill, 2025, tabled before Parliament on Wednesday, May 14 by Finance Minister Matia Kasaija.
This amendment would add the IAEA to Schedule 2 of the law, granting it tax-related privileges and exemptions in line with global diplomatic standards. The IAEA is a UN-affiliated agency that promotes safe and peaceful use of nuclear energy and ensures nuclear technologies are not used for weaponry.
Nuclear Energy Partnership Gains Momentum
Uganda has intensified cooperation with the IAEA over the past few years, especially in capacity building and feasibility studies for future nuclear power plants. In 2022, the government signed deals with Russia’s Rosatom and other international partners to lay the groundwork for its first nuclear facility.
The country aims to generate 2,000 megawatts of nuclear energy by 2032 as part of its broader energy diversification and industrial development agenda.
“This amendment is part of Uganda’s commitment to creating a favorable regulatory and diplomatic framework for nuclear energy,” a Ministry of Energy official stated.
Bujagali Hydropower Tax Exemption Extended to 2032
In the same legislative proposal, the government is also seeking to extend tax exemptions for the Bujagali Hydropower Project until June 30, 2032. The plant, located on the Nile in Jinja District, currently contributes 250 megawatts to Uganda’s grid.
Officials argue that the exemption is critical for maintaining low electricity tariffs and attracting private investment into the energy sector.
However, the proposal has sparked debate. While supporters claim it lowers generation costs and boosts affordability, critics argue that long-term tax waivers hurt national revenue and may not offer sufficient public return.
Energy economist Davis Musiime noted, “The original aim was to stabilize power costs, but repeated extensions now warrant serious parliamentary review.”
Energy Access Still a Challenge
Uganda’s overall energy access rate is 58%, with 78% coverage in urban areas and only 38% in rural regions. The government insists that initiatives like nuclear energy development and hydropower tax incentives are vital to improving access and fostering industrial growth.
In Summary:
Uganda’s move to list the IAEA under its tax law highlights a firm commitment to nuclear energy development and international cooperation. The proposed tax extension for Bujagali further reflects ongoing efforts to ensure affordable electricity, though not without economic and political scrutiny.