Answer. A tax incentive in simple terms can be described as a tax holiday; a temporary reduction or elimination of a tax. Governments usually create tax holidays as incentives for business investment.
Incentives normally include exemptions, deferrals, abatements or tax credits. Incentives were established to stimulate a specific type of new growth.
In the case of Uganda, there is currently no import tax charged on Solar Systems imported into the country. This is a tax incentive by the Uganda government to stimulate growth in the renewable energy sector.