This study investigated the relationship between tax holidays and industrialization in the Namanve Industrial Area, Mukono District. Using multiple linear regression analysis, the research aimed to determine the extent of giving tax holidays to businesses, assess the level of industrial development, and examine the influence of tax holidays on industrialization. The findings revealed that the extent of tax holidays was significantly influenced by tax policy index (β = 0.495, p < 0.01), government incentive policies (β = 0.258, p < 0.05), and awareness levels (β = 0.4699, p < 0.01). These results highlighted the importance of clear, structured policies and public awareness in enhancing the effectiveness of tax holidays. The level of industrial development was significantly driven by employment growth (β = 0.1976, p < 0.01), infrastructure development (β = 0.4311, p < 0.01), and foreign investment rates (β = 0.3458, p < 0.01). These findings underscored the need for investments in infrastructure and strategies to attract foreign investors as key enablers of industrial development. Additionally, the analysis revealed that tax holidays positively influenced industrialization (β = 0.7348, p < 0.01), with supporting roles played by infrastructure (β = 0.5105, p < 0.01) and foreign investments (β = 0.2813, p < 0.05). The study concluded that while tax holidays are a critical tool for promoting industrialization, their effectiveness depends on complementary factors such as robust infrastructure, employment growth, and foreign investment. Recommendations included strengthening tax policies, enhancing public awareness, investing in infrastructure, encouraging job creation, and fostering foreign investment through simplified processes and attractive incentives. The study emphasized the importance of integrated policy frameworks to ensure sustainable industrial growth in Namanve Industrial Area.