Health taxes: Progress for Uganda but a lot of ground to cover

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Uganda has made notable progress in using health taxes to protect its population from the harmful effects of tobacco, alcohol and sugary drinks, but experts warn the country is still far from meeting global benchmarks needed to tackle the growing burden of noncommunicable diseases (NCDs).

At the launch of a new report on health taxation last month (July 29), public health experts observed that Uganda’s implementation of such taxes has improved in recent years. The report looks at the role of health taxes on the future of health financing in Africa.

The public health experts said the strategy offers what they described as a 'triple win': reducing premature deaths linked to NCDs, generating predictable domestic revenue, and cutting dependence on donor funding.

Harmful products targeted for heavy taxation include cigarettes, alcohol, shisha, e-cigarettes and other addictive substances. However, Uganda’s current tobacco tax levels remain critically low despite recent adjustments in the 2025/26 national budget. Experts say these rates fall far short of the levels required to make a meaningful impact on public health.

Jim Arinaitwe, manager at the Centre for Tobacco Control in Africa (CTCA) at Makerere University, said that although Uganda has a robust legal framework through the Tobacco Control Act of 2015, enforcement and fiscal measures have lagged behind.

“Having a law is one thing, but translating that law into action on the ground is quite another. What we now need is not just policy, but enforcement and stronger fiscal measures,” he said.

The report’s data paint a stark picture.

As of 2024, Uganda’s cigarette excise tax as a share of the retail price was 22 per cent. Beer excise tax stood at 17 per cent in 2022, while sugar-sweetened carbonated drinks were taxed at just 7.9 per cent of the internationally comparable brand price in the same year. These figures are not only far below the World Health Organisation (WHO) recommendations, but also trail neighbouring countries such as Kenya.

Arinaitwe partly credits Uganda’s existing laws for the progress so far, but warns that without urgent reforms, future gains will stall.

UN health agency WHO recommends that health taxes should constitute at least 75 per cent of the retail price, yet Uganda’s current rate is approximately 31 per cent, even after the recent increment passed by Parliament.

“We last revised tobacco taxes in 2017, and even with the new figures, we remain far from where we ought to be,” said Arinaitwe.

The 2025/26 budget included significant increases in excise duty for various tobacco products. The tax on locally manufactured soft cup cigarettes rose from 55,000 shillings to 65,000 shillings per 1,000 sticks.

The imported version of the same product saw a 100 per cent increase from 75,000 shillings to 150,000 shillings. Imported hinged-lid cigarettes were raised from 100,000 shillings to 200,000 shillings.

“We are pleased that Parliament listened and took our concerns seriously. A 100 per cent increase on some products is commendable. But inflation could easily erode the impact if adjustments aren’t indexed to price levels," said Arinaitwe.

He also pointed to a recent announcement by the Uganda Revenue Authority (URA) which listed duty-free allowances for travellers entering the country, including one litre of spirits, 250 grammes of cigarettes and two litres of wine. According to him, these exemptions undermine the very health policies the government is trying to strengthen.

Arinaitwe emphasised that raising health taxes is one of the most effective tools for reducing consumption, particularly among young people. “When you raise taxes, you reduce affordability. And when people—particularly the youth—can’t afford it, smoking rates go down."

He urged Uganda to adopt the WHO-recommended 'single spine' tax system to ensure that increases apply evenly across all tobacco products. “That way, people can’t just migrate to lower-priced tobacco products when taxes go up."

Triple win for Africa

Global health experts used the health taxes report's launch to urge governments across Africa to strengthen health taxes on harmful products to curb the rising tide of NCDs and to generate much-needed revenue for public services.

NCDs such as cardiovascular disease, cancer and diabetes now account for 37 per cent of deaths across the continent, even as infectious diseases persist. Financing for prevention and treatment remains low, and official development assistance is in decline.

“Health taxes on unhealthy products save lives, reduce health care costs and generate revenue. This is more urgent than ever as governments face budget deficits and overwhelmed health systems,” said Dr Mary-Ann Etiebet, the chief executive officer of Vital Strategies, a global public health organisation that works with governments to advance solutions for chronic disease, injuries, and climate health threats.

The report identifies three main benefits for countries: averting premature deaths by reducing harmful consumption, raising predictable revenue for sectors such as health, education and infrastructure, and lowering the cost burden of disease.

Despite such successes, most African countries keep their health tax rates too low to meaningfully reduce affordability, and poor design leaves them vulnerable to inflation and industry interference. 

“Specific taxes per pack, per litre or per gramme, adjusted regularly, are most effective,” said Prof. Corne van Walbeek of the University of Cape Town in South Africa.

The report estimates that a 50 per cent price increase on tobacco, alcohol and sugary drinks could raise 2.1 trillion US dollars over five years for low- and middle-income countries, equivalent to 40 per cent of their total health spending.

As African leaders prepare for the UN High-Level Meeting on NCDs this September, experts are calling for reforms to ensure health taxes are linked to inflation, earmarked for public benefit, and shielded from corporate lobbying.

“All countries should follow suit. The benefits are too great to ignore,” said Adam Karpati, senior vice-president of public health programmes at Vital Strategies.