Government Tables New Tax Amendment Bills
The Ugandan government has presented eight new tax amendment bills before Parliament’s Finance Committee, aiming to raise an additional Shs1.7 trillion in revenue for the 2026/27 financial year. The proposals are part of a broader strategy to generate about Shs4.8 trillion in extra revenue through both new tax policies and improved enforcement by the Uganda Revenue Authority.
The plan was presented by State Minister for Finance Henry Musasizi, who emphasized the government’s goal of increasing Uganda’s tax to GDP ratio toward 20 percent in the medium term and 25 percent in the long term. The national budget for the 2026/27 financial year is projected at about Shs84.2 trillion, with domestic revenue expected to finance more than half of the total expenditure.
The proposals are aimed at strengthening fiscal sustainability and reducing reliance on external borrowing while supporting national development priorities.
Key Tax Measures Under Consideration
The proposed tax changes target several sectors and economic activities, with a focus on increasing government revenue and widening the tax base.
Among the key proposals are excise duty increases on essential goods and consumables such as fuel, sugar, cement, spirits, and cooking oil. Reports indicate that fuel, particularly kerosene, could see an increase of around Shs200 per litre, which would directly affect transportation and production costs.
Gaming taxes are also expected to rise from 20 percent to 30 percent, while vehicle transfer charges may increase from Shs200,000 to Shs500,000. Artists and promoters could face a 6 percent withholding tax, while companies that consistently report losses may be subjected to an alternative minimum tax of 0.5 percent of gross income.
The proposals also include possible adjustments to Pay As You Earn (PAYE) tax brackets, including raising the tax free threshold and introducing higher rates for high income earners. Other suggested measures involve taxes on mobile money transactions, urban land sales, and improved compliance systems through digital tax administration.
These reforms are intended to expand the tax base and improve government revenue collection in a growing economy.
Rising Cost of Living Concerns
The new tax proposals have triggered widespread debate among businesses, economists, civil society organizations, and the general public, with many warning that the measures could increase the cost of living.
Fuel tax increases are expected to push up transportation costs, which would affect food prices, public transport fares, and the movement of goods across the country. Sugar and cooking oil taxes could put additional pressure on household budgets, particularly for low and middle income families that rely on these basic commodities.
Higher cement taxes could slow construction and infrastructure development, potentially affecting jobs, housing affordability, and business growth. Many businesses also fear that increased taxation could reduce consumer spending and weaken competitiveness, especially in the informal sector, which employs a large portion of Uganda’s workforce.
Economists warn that these measures may lead to cost push inflation and slow economic recovery if not carefully managed.
Calls for Balanced Fiscal Measures
Several analysts and civil society groups have called on the government to balance new taxation with spending discipline and improved service delivery. Some voices suggest reducing non essential government expenditures, such as administrative costs and luxury spending, instead of relying heavily on new taxes.
Public sentiment shows mixed reactions. While many Ugandans support higher taxes if they lead to better healthcare, education, infrastructure, and youth employment programs, skepticism remains about whether the additional revenue will translate into tangible improvements in public services.
Parliament’s Finance Committee is currently reviewing the proposals, with some lawmakers already questioning certain measures and seeking clarification on their potential impact.
Economic Context and Future Outlook
Uganda’s tax to GDP ratio has been gradually improving but still remains below regional targets, making domestic revenue mobilization a key priority for the government. The new tax proposals come at a time when Uganda is preparing for oil production and expanding infrastructure projects, which require strong financial support.
The government is also focusing on improving Uganda Revenue Authority efficiency, strengthening digital tax systems, and closing tax loopholes to ensure better compliance and collection.
However, the success of the new tax measures will depend on careful implementation and parliamentary approval. If the proposed taxes lead to significant inflation or reduced economic activity, the expected revenue gains could be undermined.
Parliament Debate Will Shape Final Outcome
As Parliament continues to scrutinize the bills, the final structure of the new tax measures may change before the full national budget is presented.
The coming weeks will be critical in determining how Uganda balances revenue generation with affordability and economic stability. For many citizens and businesses, the key concern remains whether the new taxes will support national development without placing excessive pressure on everyday living costs.
The final decisions made by lawmakers will ultimately shape the real impact of these tax proposals on households, businesses, and the broader Ugandan economy.
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