The prospect of Uganda becoming an oil producing country has caused a lot of excitement among many Ugandans. Even the Government has boasted of the possibility of import savings of about a billion dollars (almost two trillion shillings) a year if the country s oil needs are met from domestic oil supply, freeing much needed foreign exchange, and even the possibility of Uganda becoming a net oil exporter. The importance of the development of a country s oil sector is the revenue that will be created for the government. However, to achieve this, an appropriate fiscal regime must be designed. Every government should aim at designing a fiscal regime that will attract investment, while at the same time ensuring a flow of revenue for the government. This paper is set to examine the appropriateness of Uganda s fiscal regime for the oil industry for attracting further investment into the oil industry. Given the global nature of the industry and the fact that Uganda is still a new entrant in this oil industry, it has to compete to attract multinational oil companies with already established oil producing nations.