The Civil Society Budget Advocacy Group (CSBAG) has raised alarm over the proposed FY 2026/27 Tax Amendment Bills, warning that the measures, if implemented, will significantly increase cost of doing business.
Julius Mukunda Exectuive Director says the planned UGX 2.3 trillion through new tax measures leans heavily on consumption and transaction taxes that disproportionately burden low income earners.
“What we are concerned about is that several of these measures will increase the cost of living, deepen inequality, and undermine long-term revenue sustainability,”Mukunda stated.
Mukunda further warned that fuel being a cross-cutting input in transport, agriculture, and manufacturing, will trigger a ripple effect across the economy, driving up transport fares, food prices, and food produce.
“These measures will directly erode household purchasing power, especially among low-income earners who already spend a larger share of their income on basic necessities,”he stated.
He warned that higher transaction taxes including the increase in stamp duty on land transfers from 1.5% to 3%, could discourage formalization in an economy where nearly 80% of activity is informal.
CSBAG a coalition of Civil Society Organizations influences Government decisions on resource mobilization and utilization for equitable and sustainable development.
John Walugembe Executive Director of Federation of Small Scale Enterprises said the proposed tax on mobile money will hurt the economy.
“Smartphones in Uganda carry a 28% tax burden, including 10% import duty and 18% VAT. Yet smartphone penetration is only 33%, which is lower than the 50% regional average,”Walugembe said.
The proposed Uganda 2026/27 tax bills introduce a Ugx 84.2 trillion budget focused on aggressive revenue mobilization, including raising the PAYE rate to for high earners (above Shs 10m/month), a Shs 200/litre fuel levy, and increased excise duties on alcohol, sugar, and plastics. The proposals aim to increase tax revenue to UGX 44.5 trillion
The proposed Uganda 2026/27 tax bills introduce a Ugx 84.2 trillion budget focused on aggressive revenue mobilization, including raising the PAYE rate to for high earners (above Shs 10m/month), a Shs 200/litre fuel levy, and increased excise duties on alcohol, sugar, and plastics. The proposals aim to increase tax revenue to Ugx 44.5 trillion.
Key 2026/27 Tax Proposals
Income earners exceeding Shs 10m per month may face a 40% PAYE rate. A 0.5% Alternative Minimum Tax is proposed for businesses reporting losses for seven consecutive years.
A proposed Shs 200 per litre hike on petrol and diesel.
Excise duty on imported un-denatured spirits (less than 80% strength) rises to 80% or Shs 3,500 per litre. Sugar excise duty increases to Shs 300 per kg, and taxes on cooking fat are introduced.
A flat excise duty of Shs 1,000 per 50kg on cement and related materials is proposed, along with a 3% duty on local paint.
Tax on single-use plastics increases significantly from 2.5% to 25% or USD 1,500 per ton.
A 0.5% withholding tax is proposed on agricultural supplies exceeding Shs 1 million to boost formalization.
Replacement of TINs with National Identification Numbers (NINs) for individuals.
