Why Govt, MPs split hairs on taxing plastics
The MPs argued that the 25% or $1,500 (equivalent to sh5.6 million) per tonne tax rate, which was approved by the previous Parliament before the Bill was returned to the House by the President on July 14 this year, should be maintained on environmental grounds.
Deputy Speaker Thomas Tayebwa, who, relying on Rule 140(5) of the Rules of Procedure issued in May 2024, said that for such a proposal to pass, the mover ought to have notified the presiding officer a day earlier. (Credit: Maria Wamala)
By Dedan Kimathi, Mary Karugaba and John Odyek
KAMAPALA - Parliament has passed the Excise Duty (Amendment) Bill, 2026, amid resistance from a section of Members of Parliament (MPs) who wanted to retain a proposed tax increase on plastic materials.
The MPs argued that the 25% or $1,500 (equivalent to sh5.6 million) per tonne tax rate, which was approved by the previous Parliament before the Bill was returned to the House by the President on July 14 this year, should be maintained on environmental grounds.
Presenting one of the two minority reports, Karim Masaba (Mbale Industrial Division, Indep) warned that the move would further narrow the tax base, which he pointed out would have dire consequences for the economy.
“According to this proposal, almost all plastics, even this pen I am holding, won’t be paying taxes. A basin won’t be paying excise duty. I want us to be critical. The way they have phrased the definition, all plastics have been exempted,” Masaba contended.
“You will recall that recently there was a big clampdown on Ugandans who were staying in swamps and many of them lost their livelihoods. Many are watching this Parliament. They lost their livelihoods in the interest of protecting the environment. We can’t be sitting here as Parliament, trying to help other people who are destroying the environment,” Nsamba stated.
“Whereas the President reduced it to the lowest, we can do a win-win and at least we don’t lose the revenue but also at least achieve the intention of the eleventh parliament,” he implored.
Speaker intervenes
However, his suggestion was rejected by Deputy Speaker Thomas Tayebwa, who, relying on Rule 140(5) of the Rules of Procedure issued in May 2024, said that for such a proposal to pass, the mover ought to have notified the presiding officer a day earlier.
Majority report
Meanwhile, the Government side, in the majority report tabled by Finance Committee chairperson Maximus Ochai (West Budama West, NRM), pushed for the existing rate of 2.5% or $70 (equivalent to Sh262,500) per tonne to remain in force.
Finance minister Henry Musasizi defended their position, saying the economic impact of the move would be insignificant.
“The revenue loss as a result of the extended exemptions which the President (Yoweri Museveni) has proposed is only Sh7 billion. Not as Karim stated. Also, the proposal which Honourable Karim agrees with of 2.5% or $70 per tonne of plastics will give us sh60.06 billion in revenue. What I am trying to say is that we should not be so much worried that the proposal by the President, if supported, will result in significant revenue loss,” Musasizi assured.
He added that another factor behind the President’s move was concern that the costs would eventually be transferred to consumers.
“Some of these items which were going to be affected by the tax are the inputs into production of other items. For example, the water tanks, water pipes and other insulators use these materials,” he cited.
That said, Musasizi said, as recommended by the President, the government would undertake a comprehensive study of the matter.