Govt tables new taxes on imported spirits, cement, cooking oil

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The Ugandan government has tabled in Parliament a raft of new taxes that are scheduled to come into effect at the beginning of the 2026/27 financial year.

The proposed new taxes contained in the Excise Amendment Bill, 2026, are on imported spirits, cement and cooking oil, among other things.

Finance state minister in charge of general duties, Henry Musasizi, tabled the Bill for first reading on Wednesday (April 1) during the plenary session chaired by Speaker Anita Among.

It seeks to impose a sh3,500 levy on any other un-denatured spirits that are imported into Uganda, sh1,000 tax per 50kg of cement and sh500 per litre of cooking oil.

The government also wants all public entertainers in Uganda to pay a withholding tax as it seeks to raise the sh44.5 trillion revenue in the 2026/27 financial year to finance the sh84.209 trillion national budget.

Widening tax base

In mid-January this year, Musasizi said Uganda’s tax-to-GDP (gross domestic product) ratio had stagnated between 10% to 14% due to the small tax base, poor compliance culture by taxpayers, limited number of tax collectors and revenue leakages/corruption. 

At the time, he was appearing before the parliamentary committee on finance for their Budget Framework Paper for 2025/26 financial year together with the Uganda Revenue Authority (URA) team.

To address those challenges, Musasizi said URA had increased the use of technology to bring more transparency, efficiency and simplification of processes.

He also said the taxman had intensified sensitisation of taxpayers to address the non-compliance culture, in addition to collaboration and sharing of data with government Ministries, Departments and Agencies to expand the tax base.

To address the limited staff numbers, the minister said URA structure had also been reviewed, and the recruitment process is on-going.

GDP, which is a widely-used measure of the size of the economy, stands for gross domestic product, and is a measure of all the economic activity of companies, governments and people in a country.

Economic experts say the tax-to-GDP ratio is a key indicator in assessing a nation’s efforts to raise domestic revenue as it shows how much of a country’s tax money contributes to its GDP.

They say a low tax-to-GDP ratio suggests that fewer actors are contributing to the nation’s tax income and that a sizeable portion of the economy is untaxed.

On January 8, 2025, the URA commissioner general, John Musinguzi, announced that they had added a total of 420,183 new taxpayers to the taxpayer register, bringing the total to 4,881,983.

“The new taxpayers so far yielded sh59.01b for the period of July to December of the financial year 2024/25. Of these, 232,063 were non-individuals and 4,649,920 were individual taxpayers,” he told the media in Kampala.