By Fredrick ES Mutengeesa
Social Scientist | Chartered Secretary | Strategic Management and Development Practitioner
A nation cannot build a prosperous future by weakening the institutions that educate its children.
A country cannot sustainably expand employment by undermining enterprises that employ its citizens.
Nor can a government guarantee long-term revenue if the economic institutions upon which that revenue depends are increasingly unable to survive.
These are not merely philosophical observations. They are fundamental questions of public finance, economic sustainability, education policy and national development.
Uganda’s private schools and tertiary institutions have become indispensable partners in the country’s educational system. They mobilise private investment, construct learning facilities, employ teachers and support staff, educate children, train young people and help prepare the workforce upon which the country’s future economic prosperity depends.
They do so while the Government continues to shoulder substantial responsibilities in providing public education.
Yet private educational institutions must also contend with rising operational costs, the financial pressures experienced by parents, infrastructure requirements, salary obligations, statutory compliance and taxation.
This raises a question that deserves serious national attention:
Can Uganda design a taxation framework that enables the Government to collect revenue while allowing qualifying private educational institutions to remain financially sustainable, employ more people and continue educating the children who will build tomorrow’s Uganda?
My position is clear: the Government should undertake an urgent, evidence-based review of taxation in the private education sector and introduce targeted, conditional income tax relief for qualifying educational institutions, while retaining PAYE and other applicable statutory obligations.
This is not a demand for tax irresponsibility.
It is a call for strategic tax reform.
It is not an argument that private schools should operate beyond the reach of the law.
It is an argument that the law should recognise the exceptional public value of educational investment.
And it is not a proposal to deprive the Government of revenue.
It is a proposal to protect the economic activity, employment, educational capacity and future tax base that Uganda needs to sustain its development.
The ultimate objective must be to make taxation work for national development, rather than allow an unnecessarily burdensome taxation framework to undermine the very institutions that contribute to that development.
Uganda’s published education statistics demonstrate the scale of private educational investment.
According to the Ministry of Education and Sports’ Education Statistical Abstract 2025, the country had 45,164 primary schools in its national database.
Of these, 32,620 were privately owned, compared with 12,544 government schools.
Private schools therefore represented approximately 72.2% of all primary schools recorded in the national database.
At secondary level, the country had 7,466 schools: 5,959 private schools and 1,507 government schools.
Private institutions consequently represented approximately 79.8% of the recorded secondary schools.
These figures reveal a striking reality: private institutions constitute the majority of recorded primary and secondary school establishments in Uganda.
However, school numbers must be distinguished from learner enrolment.
The same statistical abstract reported total primary enrolment of 11,787,396 learners.
Of these:
Private primary schools therefore educated approximately 2.7 million children in the reported figures.
The statistical abstract reported 2,044,586 secondary school learners.
Of these:
Private secondary schools were therefore educating more than three-quarters of a million learners in the published figures.
Source: Ministry of Education and Sports, Education Statistical Abstract 2025. Consult the official statistics.
These numbers must not be misrepresented as showing that private schools educate the majority of all primary and secondary learners. Government schools continue to educate the larger share of learners nationally.
Nevertheless, the statistics establish that private institutions constitute a major part of the country’s educational infrastructure and educate millions of children.
The question, therefore, is not whether private schools make a contribution.
The question is whether our national taxation policy adequately recognises the magnitude, sustainability and wider economic value of that contribution.
A school may be privately owned, but the benefits of its educational work extend far beyond its proprietor.
When a child learns to read, Uganda gains a more capable citizen.
When a young person acquires professional skills, the country gains productive capacity.
When a teacher earns a salary, a household gains the means to pay rent, buy food, educate children and meet medical expenses.
When a school purchases food, books, furniture and construction materials, other businesses gain customers.
When a tertiary institution trains nurses, engineers, accountants, teachers, technicians and information technology specialists, it contributes to the human capital required for national transformation.
These benefits are not confined to the institution’s accounts.
They are distributed throughout society.
Private educational institutions support an interconnected network of economic activities involving:
A school that operates sustainably contributes to the livelihoods of people who may never enter its classrooms.
This is why the economic contribution of education must not be measured exclusively by the corporation tax appearing in an institution’s tax return.
The wider picture includes jobs, wages, household consumption, supply chains, infrastructure, human capital and future productivity.
A government that understands this wider picture will assess educational taxation as part of its economic development strategy.
A government that looks only at the immediate tax payment risks overlooking the broader value generated by a functioning school.
A school is not merely a place where fees are collected. It is a place where human potential is developed, livelihoods are supported and the foundations of national productivity are laid.
Let us consider a practical example.
Imagine a private school employing 100 teachers and non-teaching staff.
These employees may include teachers, administrators, accountants, laboratory technicians, librarians, cooks, drivers, security personnel and cleaners.
Each employee represents a livelihood.
Each salary may support a household.
Each household may have children whose education depends on that income.
Each family may have rent to pay, food to purchase, medical expenses to meet and relatives to support.
Now imagine that the school experiences severe financial difficulties and eventually closes.
The consequences are not confined to the proprietor.
One hundred employees may suddenly find themselves without their previous source of income.
Children may be transferred to other schools. Parents may struggle to secure affordable alternatives. Suppliers may lose contracts. Landlords may lose tenants. Lenders may face repayment difficulties.
The Government may also lose some of the revenue associated with the school’s former operations.
These consequences are not inevitable in every closure, and taxation is not the sole cause of school failure. However, they illustrate why the sustainability of educational institutions deserves serious policy attention.
The 100-employee example is illustrative, not a claim that every private school employs that number.
Its purpose is to demonstrate that a school’s economic footprint extends well beyond its ownership structure.
A school proprietor may appear in a tax assessment as one taxpayer.
But behind that taxpayer may stand hundreds of learners, dozens of employees, suppliers, parents and dependants whose economic welfare is connected to the school’s continued operation.
When a school closes, the loss is not simply the disappearance of a business. It can become the loss of livelihoods, educational opportunities, productive investment and future public revenue.
That is why a tax policy concerned with long-term national prosperity must consider the consequences of avoidable business failure.
The Uganda Revenue Authority’s published guidance identifies several tax obligations that may apply to privately owned educational institutions.
These include corporation tax, individual income tax where applicable, PAYE and withholding tax.
Education services are also treated as VAT-exempt supplies under the applicable framework.
URA’s guidance distinguishes privately owned institutions from government-aided institutions in its description of relevant tax obligations.
The relevant policy question is whether the cumulative framework should be adjusted to support the sustainability of qualifying private educational investment.
URA states that the standard corporation tax rate is 30% of chargeable profits for companies subject to that regime.
The distinction between revenue and taxable profit is essential.
A school may collect substantial tuition fees but also incur significant expenditure on salaries, food, utilities, infrastructure, maintenance, educational materials and other allowable business costs.
The tax is not automatically 30% of all tuition fees collected.
It is calculated according to the applicable tax rules and the institution’s chargeable income.
Nevertheless, for a school operating on narrow margins, taxation of profits can affect the funds available for reinvestment, expansion, maintenance and other priorities.
The appropriate policy response is not to assume that every school needs relief.
It is to establish whether a targeted relief framework could support financially viable institutions that deliver demonstrable educational and social benefits.
PAYE is deducted from employees’ taxable employment income and remitted to URA by the employer.
It is distinct from corporation tax.
A policy that exempts a qualifying school’s profits from corporation tax would not, by itself, exempt its employees from PAYE.
This distinction is central to the proposal.
A qualifying institution could receive relief on its eligible profits while continuing to deduct and remit PAYE according to the law.
This would preserve an important revenue channel while providing targeted support to educational investment.
Schools may also have withholding tax obligations on qualifying payments, depending on the transaction and the applicable statutory provisions.
Where those obligations apply, the proposed reform need not abolish them.
URA confirms that education services are VAT-exempt supplies.
However, this does not mean that every activity, transaction or purchase associated with a school is automatically exempt from every tax.
The applicable treatment depends on the law and the nature of the transaction.
Depending on the circumstances, schools may also be responsible for applicable local government licences, property rates, ground rent under relevant land arrangements and other lawful charges.
These obligations arise under different legal frameworks and should not be treated as identical.
The proposed national reform should therefore preserve legitimate local revenue while examining whether the cumulative burden of taxes, fees and compliance requirements is sustainable.
Official references:
The technical conclusion is straightforward: a well-designed relief policy can target eligible institutional income without automatically abolishing PAYE, withholding tax or every other applicable statutory obligation.
Uganda uses tax incentives under specified statutory conditions to encourage certain forms of investment and economic activity.
These arrangements do not mean that all foreign investors are exempt from income tax. Eligibility depends on the relevant legislation, investment category, thresholds and conditions.
The important policy principle is that taxation is not merely a mechanism for collecting money.
It can also be used to encourage investment, employment, infrastructure development and activities considered strategically important to national development.
Education deserves equally serious consideration.
A foreign investor may establish an enterprise that creates jobs, expands productive capacity and contributes to economic growth.
A private educational investor may construct classrooms, employ teachers, educate children and develop the skills required for the country’s future workforce.
The two investments are different, and they should not automatically receive identical tax treatment.
However, both should be assessed according to transparent criteria that consider their economic and social contributions.
The question Uganda should ask is this:
If tax incentives can be justified for qualifying investments that advance national economic objectives, why should the Government not rigorously evaluate comparable incentives for educational institutions that advance national human capital development?
The proposal is not to grant every school an unconditional exemption.
It is to create a transparent mechanism through which eligible schools can receive relief in return for measurable public benefits.
Such benefits could include maintaining affordable fees, employing teachers, investing in infrastructure, serving underserved communities and providing education to learners who might otherwise face limited alternatives.
A policy of this kind would recognise private education as a strategic development partner while protecting the public interest.
Government revenue is essential.
It finances roads, hospitals, security, public education, infrastructure and other national priorities.
No responsible policy proposal should ignore this reality.
However, revenue policy must also recognise the importance of preserving productive economic activity.
A school that remains open can continue generating economic activity and applicable tax receipts.
A school that closes may stop paying corporation tax on profits it no longer earns. It may cease employing staff whose salaries previously generated PAYE. It may purchase fewer supplies and reduce its demand for local services.
The actual fiscal consequences depend on the school’s circumstances and what happens to its assets, employees and economic activities after closure.
Nevertheless, the risk of a contracting tax base deserves attention.
Consider two possible policy approaches.
Under the first, the Government continues the existing tax framework without introducing additional targeted relief. Schools that remain viable continue operating and meeting their tax obligations. Others may face financial pressure for a range of reasons, including costs, enrolment challenges, debt and taxation.
Under the second, the Government introduces conditional relief for qualifying institutions. It forgoes some immediate corporation tax revenue but seeks to preserve employment, encourage investment and support sustainable educational provision.
The second approach is not guaranteed to produce more revenue.
That is precisely why fiscal modelling is necessary.
Government should compare the cost of the proposed relief with its measurable benefits, including employment, educational capacity, investment, school survival and other applicable tax receipts.
The decisive question is whether the public benefits of the relief justify its fiscal cost.
The right question is not simply how much tax a school can pay this year. It is how Uganda can preserve a sustainable network of educational institutions that will continue contributing to public revenue and national development for decades to come.
Behind every school closure is the possibility of disrupted education.
A child may have spent years learning in an institution, building friendships, developing confidence and preparing for important examinations.
A sudden closure may require that child to transfer to another school, sometimes at short notice.
Parents may struggle to find a suitable alternative. Some may face additional transport expenses, new admission charges or higher fees.
Learners with disabilities, children in examination classes and families with several school-going children may face particular difficulties in finding appropriate alternatives.
Not every school closure leads to these outcomes, and other schools may sometimes absorb displaced learners successfully.
Nevertheless, the potential disruption is serious enough to warrant consideration in national education policy.
Uganda must protect the interests of learners while also maintaining high standards of school registration, safety, quality and accountability.
A tax relief framework should therefore prioritise institutions that demonstrate educational value, financial transparency and compliance with the law.
The objective is not to preserve failing institutions indefinitely.
It is to prevent avoidable financial pressures from destroying viable educational capacity.
Every child deserves an opportunity to learn in a safe, stable and supportive environment.
Every teacher deserves the opportunity to work in an institution capable of meeting its legitimate obligations.
Every parent deserves confidence that the school in which a child is enrolled has a reasonable prospect of continuing to provide education.
Educational continuity is not merely a commercial concern. It is a matter of human dignity, family stability and national development.
The Government should establish a Private Education Tax Relief Framework, subject to the necessary legislative and administrative arrangements.
The framework should be based on six principles.
First: Eligibility. Institutions must satisfy applicable registration, licensing, educational quality and financial reporting requirements.
Second: Conditionality. Relief must be tied to measurable educational, employment or investment outcomes.
Third: Proportionality. The level of relief should reflect the institution’s circumstances and public contribution.
Fourth: Continued compliance. PAYE and other applicable statutory obligations should remain in force unless the law expressly provides otherwise.
Fifth: Transparency. The Government should publish information about the cost of the relief and the benefits achieved.
Sixth: Review. The policy should be periodically evaluated and adjusted according to evidence.
The Government could consider several options:
These options are alternatives for policy evaluation, not existing entitlements.
The final model should be selected only after assessing its legal feasibility, fiscal cost, administrative complexity and likely impact.
A targeted framework would be more defensible than a blanket exemption because it would focus public support on institutions that demonstrate genuine educational and social value.
The following institutions should work together to develop the reform:
The Ministry of Finance, Planning and Economic Development should lead the fiscal assessment and determine the potential revenue implications.
The Uganda Revenue Authority should provide data on the tax treatment of private educational institutions, including relevant corporation tax receipts, compliance trends and administrative challenges.
The Ministry of Education and Sports should provide information on school registrations, enrolment, teacher employment, school closures and educational capacity.
Parliament should examine the proposed reforms and determine whether amendments to the relevant legislation are justified.
Local governments should participate in reviewing the cumulative effect of applicable local charges while protecting legitimate local revenue.
Private educational institutions and their representative bodies should provide verifiable information on operating costs, employment, fee affordability, investment and financial sustainability.
The review should establish a clear baseline and assess the effects of alternative tax policies.
It should also investigate whether taxation is a material factor in school closures, rather than assuming that every closure results from tax pressure.
The Government should then publish its findings and determine whether a pilot relief programme is justified.
A pilot could be limited to defined categories of schools, with transparent eligibility criteria and measurable outcomes.
After an appropriate period, an independent evaluation could determine whether the relief improved sustainability, protected employment, increased investment and delivered sufficient public benefit to justify its fiscal cost.
This is a practical, accountable and evidence-based route towards reform.
Public policy is often discussed through percentages, revenue projections, statutory provisions and financial statements.
These are necessary tools of government.
But education is ultimately about people.
It is about the child who needs a classroom.
It is about the teacher who wakes up every morning to prepare a lesson.
It is about the parent who makes sacrifices to pay school fees.
It is about the school proprietor who invested savings, borrowed money, acquired land, constructed classrooms and employed teachers in the hope of building an institution that would serve generations.
It is about the supplier who depends on the school’s orders.
It is about the cook, driver, cleaner, administrator and security guard whose household depends on a salary.
It is about the young person who may one day become a doctor, engineer, entrepreneur, teacher or public servant because an educational opportunity was available.
These human realities do not remove the need for taxation.
They remind us that taxation must be designed with a full understanding of its consequences.
A school is not entitled to exemption merely because it educates children. Equally, the public value of education should not be ignored merely because the institution is privately owned.
The appropriate response is a balanced policy that protects educational access, maintains accountability and promotes sustainable investment.
The future of a child should never be treated as an insignificant consideration in the design of national economic policy.
Uganda needs revenue.
It needs accountable educational institutions.
It needs responsible private investment.
It needs teachers who are paid, learners who are taught and schools that can maintain the facilities necessary for effective learning.
These objectives are not mutually exclusive.
The Government can enforce tax compliance while reviewing whether targeted relief would strengthen the educational institutions that help deliver national development.
The Ministry of Finance, URA, the Ministry of Education and Sports and Parliament should therefore initiate a structured review of taxation in the private education sector.
The review should consider conditional income tax relief for qualifying institutions while retaining PAYE and other applicable statutory obligations.
It should examine the cumulative effect of taxes and operating costs, assess the fiscal implications of school closures, and establish whether targeted incentives can improve educational sustainability without imposing unjustified costs on the public.
The case for reform is not built on emotion alone.
It rests on the scale of private educational provision, the employment and economic activity associated with schools, the importance of human capital, and the need for a tax system that remains sustainable over time.
The published statistics show that private schools constitute approximately 72.2% of recorded primary schools and 79.8% of recorded secondary schools. They educate approximately 2.7 million primary learners and 776,546 secondary learners in the reported figures.
These numbers represent a substantial part of Uganda’s educational infrastructure.
They deserve serious consideration in the design of national tax policy.
Let us be clear: the objective is not to protect private profit at the expense of the public.
It is to ensure that educational institutions which comply with the law and deliver measurable public benefits can continue to educate children, employ citizens and contribute to the economy.
The ultimate goal is a fair and sustainable partnership between the State and private educational providers.
Let us collect revenue without unnecessarily weakening the institutions that create future revenue.
Let us protect the taxpayer without overlooking the teacher.
Let us enforce the law without losing sight of the child.
Let us encourage responsible investment without compromising public accountability.
And let us recognise that the strongest tax policy is not necessarily the one that extracts the most from every institution today, but the one that sustainably finances public services while preserving the productive capacity of the nation.
Uganda’s children deserve an education system with the capacity, stability and resources to prepare them for tomorrow.
Its teachers deserve institutions capable of sustaining their livelihoods.
Its investors deserve a predictable and proportionate regulatory environment.
And its Government deserves a tax base that remains productive, compliant and sustainable.
These interests can be reconciled through evidence-based reform.
Government of Uganda, let us look beyond the immediate tax return and consider the classroom, the teacher, the parent, the learner, the investor and the future of our country.
A school that remains viable can continue educating children, employing teachers, supporting families and contributing to the economy.
A school that closes loses the opportunity to continue providing those benefits.
The Government should therefore act decisively to examine whether a carefully designed tax relief framework can preserve educational capacity, protect employment and sustain long-term public revenue.
This is not a plea for privilege.
It is a call for fairness, foresight and responsible national leadership.
It is an appeal to protect educational investment as a vital component of Uganda’s development strategy.
Let us not allow the pursuit of today’s revenue to undermine the foundations of tomorrow’s prosperity. Let us tax wisely, educate sustainably and build a Uganda in which every child has a meaningful opportunity to learn, every teacher has an opportunity to serve, and every responsible educational investor has a fair opportunity to contribute to the nation’s future.
Fredrick ES Mutengeesa
Social Scientist | Chartered Secretary | Strategic Management and Development Practitioner
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