President Yoweri Kaguta Museveni has returned provisions in the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026 to Parliament for reconsideration, citing concerns over possible tax avoidance, revenue losses and the impact of proposed tax increases on manufacturers.
Deputy Speaker Thomas Tayebwa informed Parliament during Tuesday’s plenary sitting that the President had recommitted Clause 11 of the Income Tax (Amendment) Bill, 2026 and Clause 2(e) of the Excise Duty (Amendment) Bill, 2026 in line with Article 91(3)(b) and (c) of the Constitution.
Tayebwa said Parliament had received a letter from President Museveni dated July 10, 2026, addressed to the Speaker of Parliament, returning the two provisions for further consideration.
“I have received a letter from the President returning some Bills dated July 10, 2026, and addressed to the Right Honourable Jacob Oulanyah, Speaker of Parliament, the Income Tax Amendment Bill 2026 and the Excise Duty Amendment Bill 2026,” Tayebwa told the House.
The President raised concerns over a provision passed by Parliament that exempted winnings from land-based casinos from withholding tax, arguing that the move could create loopholes for tax avoidance and lead to revenue leakage.
According to the President, Clause 11 of the Income Tax (Amendment) Bill, 2026, which amends Section 131 of the Income Tax Act, introduced withholding tax on winnings from betting and gaming based on the difference between the payout and the stake.
However, Parliament added an exemption for winnings from land-based casinos licensed under the Lotteries and Gaming Act, a move Museveni said could unfairly favour one category of gaming operators over others.
“The exemption creates opportunities for tax avoidance and revenue leakage. By removing an entire category of gaming winnings from withholding tax, the amendment creates incentives for transactions to be structured through land-based casinos to obtain a tax advantage not available to other gaming operators,” the President said.
Museveni further argued that land-based casinos and online gaming platforms conduct substantially similar activities and should not be treated differently under the tax law.
“In addition, the amendment creates an unjustified distinction between land-based casinos and operators conducting substantially similar gaming activities through online platforms. Both derive income from the same economic activity, and there is no justification for exempting one category while taxing the other,” he added.
On the Excise Duty (Amendment) Bill, 2026, the President objected to the proposed increase in excise duty on single-use plastics, saying the measure could place heavy financial pressure on manufacturers and negatively affect investment and employment.
Parliament had approved an increase in excise duty on single-use plastics from 2.5 percent or $70 (about Shs260,000) per tonne, whichever is higher, to 25 percent or $1,500 (about Shs5.5 million) per tonne, whichever is higher.
Museveni said the proposed increase requires further assessment, noting that Uganda currently lacks readily available alternatives to plastic packaging.
“The proposed increase is substantial and is likely to impose significant cost pressures on manufacturers engaged in the production and use of single-use plastics. It may adversely affect production, investment and employment within the sector,” Museveni stated.
“In addition, viable alternatives to plastic packaging are not yet readily available in Uganda. I therefore consider that the matter requires further study before the proposed increase is implemented as a policy measure for advancing environmental conservation objectives,” he added.
The President said he was unable to assent to the two Bills in their current form and had therefore returned the specific clauses to Parliament for reconsideration.
“Given the above observations and concerns, I’m constrained to assent to the Income Tax Amendment Bill 2026 and the Excise Duty Amendment Bill 2026. Accordingly, I hereby recommit the following provisions to Parliament for reconsideration,” Museveni said.
The President proposed that Clause 11 of the Income Tax (Amendment) Bill, 2026 be amended to provide for withholding tax on betting and gaming winnings, while maintaining an exemption only for winnings paid by a person licensed to conduct a national lottery under the Lotteries and Gaming Act.
For the Excise Duty (Amendment) Bill, 2026, Museveni proposed retaining the lower tax rate of 2.5 percent or $70 per tonne, whichever is higher, while Parliament reconsiders the proposed sharp increase.
The Bills will now return to Parliament, where legislators are expected to debate the President’s concerns and either amend the clauses as proposed or reconsider their earlier decisions.
