Museveni returns Income Tax and Excise Duty amendment bills to Parliament
“The President is against the passing into law of Clause 11 of the Income Tax (Amendment) Bill, 2026,” Tayebwa said while communicating the President's message to the House.
In his communication to Parliament, Museveni argued that the exemption would create an uneven playing field between businesses undertaking similar activities while creating opportunities for tax avoidance.
KAMPALA - President Yoweri Museveni has declined to assent to the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026, returning them to Parliament for reconsideration over concerns that some of the proposed tax measures would create unfair competition among businesses, encourage tax avoidance and negatively affect the economy.
The two Bills were passed in April 2026 by the 11th Parliament ahead of the reading of the 2026/27 national budget and the commencement of the new financial year.
During the House sitting on Tuesday, July 14, 2026, Deputy Speaker Thomas Tayebwa informed legislators that the President had objected to specific clauses in both Bills, particularly the proposed withholding tax on betting winnings and the sharp increase in excise duty on single-use plastics.
“The President is against the passing into law of Clause 11 of the Income Tax (Amendment) Bill, 2026,” Tayebwa said while communicating the President's message to the House.
In his communication to Parliament, Museveni argued that the exemption would create an uneven playing field between businesses undertaking similar activities while creating opportunities for tax avoidance.
"The exemption creates opportunities for tax avoidance and revenue leakage," the President said. He questioned the basis for treating operators engaged in substantially similar economic activities differently for tax purposes.
“There is no justification for exempting one category while taxing the other,” Museveni said. The President warned that exempting land-based casinos could encourage businesses to restructure their operations to minimise tax liabilities, undermining government revenue collection.
Museveni likewise rejected the proposed increase in excise duty on single-use plastics contained in the Excise Duty (Amendment) Bill, 2026. Parliament had approved raising the duty from the current rate of 2.5 percent or US$70 per tonne to 25 percent or US$1,500 per tonne, whichever is higher.
While the amendment was intended to strengthen environmental protection and discourage plastic pollution, the President said the proposed increase was too steep and could have adverse economic consequences.
Museveni added that Uganda's manufacturing sector is not yet sufficiently prepared to shift to alternative packaging materials. “Viable alternatives to plastic packaging are not yet readily available in Uganda,” he said.
The President recommended that government undertake a study before implementing such an increase as part of its environmental protection policy.
Charles Tebandeke (Bbale County, NUP) questioned whether the Bills should instead be reintroduced through fresh legislative processes since they had been passed by the previous Parliament.
“The law assumes that the 11th Parliament that was handling these Bills was dissolved and the matter was overtaken by events,” Tebandeke said.
Responding to the concern, Deputy Speaker Tayebwa rejected suggestions that the President had acted outside the constitutional timeframe for assenting to Bills.