Finance Minister Matia Kasaija appears before the trade and finance committee at Parliament on April 19, 2024. PHOTO/ DAVID LUBOWA
Parliament is today expected to vote on several new taxes that were proposed by the government last month. The seven tax amendment Bills that have been under scrutiny by the parliamentary Committee on Finance, include the Income Taxes, Tax Procedures Code, the Value Added Tax, The Excise Duty, and the Hides and Skins (Export Duty.
The tax amendment Bills will be presented for the second and third reading before the MPs can vote and approve them one by one as required by law. Among the taxes to be passed is a three-year tax exemption for citizens' startup businesses.
This tax under the Income Tax (Amendment No. 2) Bill, 2025, seeks to exempt income derived from businesses established by Ugandan citizens from tax for three years, starting July 1, 2025, provided certain conditions are met. These conditions will apply to businesses registered with an investment capital not exceeding Shs500 million. The condition will also require citizens or their associates not to have previously benefited from this exemption.
The individual must also file a tax return, including business information as required under Section 147 of the Act in a format prescribed by the Commissioner General.
The MPs will also vote on the proposed 38 percent tax increase on beer makers as contained in the Income Tax (Amendment) Bill, 2025. The amendment seeks to increase the excise rate from Shs650 to Shs900 per litre, whichever is higher.
The legislators are also expected to vote on whether the government should increase excise duty on locally-produced cigarettes by Shs10,000 on every 1,000 sticks of cigarettes, or 50 packs of cigarettes. A standard cigarette pack typically contains 20 cigarettes.
The MPs will also vote on having all the betting and gaming operators to process wagers and payouts through a centralised payments gateway licensed by the Bank of Uganda. This proposal under the Tax Procedures Code (Amendment) Bill, 2025, requires the centralised system to be the sole platform for all betting-related transactions as stipulated under the National Payment Systems Act, 2020.
The parliamentarians are also expected to vote on the proposal that will see the government use National Identification Numbers (NIN) for undertakings previously done using the Tax Identification Number (TIN).
The Tax Procedures Code (Amendment) Bill, 2025, seeks to provide for the use of the National Identification Number (NIN) issued by the National Identification Registration Authority (Nira) for individuals and the registration number issued by the Uganda Registration Service Bureau for non-individuals as tax identification numbers.
But some legislators have complained they might not be accorded enough time to handle all the tax amendment Bills. Nevertheless, Mr Chris Obore, the parliament’s director of communication and public affairs, said the time accorded would be ample to handle all businesses on the order paper.
“You know Parliament has sat up to midnight. When duty calls, legislators have always responded and it is the same thing here,” Mr Obore said.
A memo sent by Government Chief Whip Denis Obua to all Legislators of the ruling National Resistance Movement (NRM) party directed them to attend and ensure all the government proposals sail through.
Local investors upbeat
Some stakeholders have welcomed the proposed taxes, especially on exempting new businesses with capital investments worth Shs500 million from paying taxes for three years. Similarly, Mr John Tusabe from the Private Sector Foundation Uganda (PSFU), lauded the government for authoring a proposal that would see the government use National Identification Numbers (NIN)for purposes previously done using the Tax Identification Number (TIN). He reasoned that this “amendment addresses difficulties faced by URA to have an accurate and updated tax register and deploy data analytics capabilities to check levels of taxpayer compliance.” For the above proposal to pay off, Mr Tusabe recommended the “need to ensure that URA is granted access to large volumes of sensitive taxpayer data, enhanced safeguards and protocols within URA to keep taxpayers’ information confidential.”
Beer, cigarettes firms complain
The tax amendment Bills were tabled on the floor of Parliament by Finance junior minister Henry Musasizi last month for the first reading and were referred to the Parliamentary Committee on Finance for scrutiny. Since then, the Committee on Finance has been meeting various stakeholders affected by the taxes, including the betting and gaming companies, alcohol and tobacco manufacturers, the Private Sector Foundation Uganda (PSFU) officials as well as the Uganda Manufacturers Association (UMA). But the stakeholders rejected the taxes imposed on beer and cigarettes, warning that if the government goes ahead and approves them, the tax base would be reduced, given the anticipated reduction in consumption because of the hike in prices. The Gaming and Betting Alliance opposed the Tax Procedures Code (Amendment) Bill, 2025, which seeks to require all betting operators to process wagers and payouts through a centralised payment gateway licensed by the Bank of Uganda.
The proposal requires the centralised system to be the sole platform for all betting-related transactions as stipulated under the National Payment Systems Act. The Alliance, through its chairperson Innocent Nahabwe, argued that the move would create a monopoly in the sector, limit competition, and conflict with existing legal frameworks. The Uganda Alcohol Industry Association, together with the gaming and betting alliance, also opposed the new tax levies and measures that the government plans to impose on the beer and gaming sector in the country. In separate presentations, the Nile Breweries Ltd, whose major products are made using locally-sourced items such as cassava, barley, and sorghum, opposed the 38 percent increase on their beer, saying it would lead to decline in consumption and an increase in illicit alcohol on the market.
Mr Emmanuel Njuki, the head of legal and corporate affairs at the Nile Breweries Ltd, advised the government to explore alternative tax measures that would widen the tax base, as it also closes the loopholes that escalate illicit alcohol consumption in the country. “Institute policy mechanisms to introduce excise at source for un-denatured ethanol. We believe the goal for the government should be to tap into the current 65 percent illicit market as an opportunity to provide relief on the formal alcohol sector,” Mr Njuki told MPs on the Finance Committee. The beer fraternity warned that if passed in the current form, the legislation “would push more consumers toward unsafe, untaxed products, eroding public health gains and government revenue.” “Beer prices could increase by up to 40 percent, reducing affordability and fuelling pressures and therefore, leading to lower tax collections,” he added.
Tobacco manufacturers also rejected the government’s proposed tax increases, warning that the move would result in significant losses for both the companies and the State. Dr David Kamukama, the head of corporate and public relations at Leaf Tobacco and Commodity, said: “The overall impact of the extreme cigarette taxes as proposed results in promoting the illegal market, reducing sales and taxes from regulated businesses and promoting toxic, unregulated products in the country.” Mr Amos Kankunda, the Finance Committee chairperson, by press time had not picked up our calls for a comment, but he had previously told this publication that they were receiving proposals from all the affected entities before forging a way forward. He said they would then write a report from their outcomes, which report would be presented on the floor of Parliament this afternoon.
The Tax Amendment Bills
1. The Value Added Tax (Amendment) Bill, 2025
2. The Excise Duty (Amendment) (No.2) Bill, 2025
3. The Tax Procedures Code (Amendment) Bill, 2025
4. The Income Tax (Amendment) (No.2) Bill, 2025
5. The External Trade (Amendment) Bill, 2025
6. The Stamp Duty (Amendment) Bill, 2025
7. The Hides and Skins (Export Duty) (Amendment) Bill, 2025
They say...
David Kamukama, Leaf Tobacco and Commodity spokesperson The overall impact of the extreme cigarette taxes as proposed results in promoting the illegal market, reducing sales and taxes from regulated businesses and promoting toxic, unregulated products in the country.
Emmanuel Njuki,
NBL spokesperson
We believe the goal for the government should be to tap into the current 65 percent illicit market as an opportunity to provide relief on the formal alcohol sector Beer prices could increase by up to 40 percent, reducing affordability and fuelling pressures and therefore, leading to lower tax collections.
