Parliament on Tuesday, 4 adopted President Yoweri Museveni’s recommendations on the Excise Duty (Amendment) Bill, 2026 and the Income Tax (Amendment) Bill, 2026, approving a lower excise duty on single use plastics and removing a proposed withholding tax exemption on winnings from land based casinos.
The decision followed the President’s return of the two Bills to Parliament, arguing that some of the amendments passed by legislators required reconsideration to protect both government revenue and the country’s manufacturing sector.
In his message to Parliament, Museveni advised that increasing excise duty on single use plastics from 2.5 percent or US$70 per tonne to 25 percent or US$1,500 per tonne, whichever is higher, should not be implemented before government conducts a comprehensive assessment of its likely impact on Uganda’s plastics industry.
The President also warned against exempting winnings from land based casinos from withholding tax, saying such a move would create inconsistencies in the tax regime and open opportunities for revenue leakages.
Parliament considered the President’s recommendations during Tuesday’s plenary sitting chaired by Deputy Speaker Thomas Tayebwa and adopted them after debate.
Presenting the report of the Committee on Finance, Planning and Economic Development, committee member James Kakooza said MPs agreed with the President that a sharp increase in taxes on single use plastics should only be considered after a detailed study.
“The committee agrees with the President that an increase in the excise duty on single use plastics from 2.5 percent or US$70 per tonne, whichever is higher, to 25 percent or US$1,500 per tonne, whichever is higher, should be stayed until a thorough study is undertaken to ascertain its impact on the industry,” Kakooza said.
The committee further supported broadening the scope of the tax to cover additional single use plastic products while maintaining exemptions for multiple use plastics, packaging for sanitary pads, vacuum food packaging and pharmaceutical products.
MPs also recommended that the Ministry of Finance, Planning and Economic Development undertake a comprehensive study on plastic taxation and report its findings to Parliament within six months.
Not all legislators supported reconsideration of the Bills.
Nyendo Mukungwe Division MP Gyaviira Lubowa argued that the 12th Parliament had no legal mandate to revisit Bills that had already been passed by the dissolved 11th Parliament.
“It is, therefore, irregular to consider Bills that were already passed by the 11th Parliament before it was dissolved,” Lubowa said.
Lubowa also criticised what he described as the government’s inconsistent position on taxation of plastics, arguing that adopting the President’s proposal would deny the government about Shs208 billion in anticipated revenue.
In a minority report, Mbale City Industrial Division MP Karim Masaba backed the President’s proposal to retain the lower tax rate but opposed the expanded exemptions.
“I agree with the President’s proposed rate of 2.5 percent or US$70 per tonne. My disagreement relates to the proposed exemptions, which would significantly reduce the expected revenue,” Masaba said.
Masaba argued that widening the exemptions would reduce projected collections from Shs208 billion to just Shs3 billion, translating into an estimated revenue loss of Shs205 billion.
Finance Minister Henry Musasizi dismissed those estimates, saying the actual revenue impact would be much lower.
“The President’s proposal is in the right direction. Government policy evolves as new information becomes available. The estimated revenue implication is about Shs7 billion, not the figures being claimed,” Musasizi said.
Kassanda County North MP Patrick Nsamba questioned the government’s approach, saying authorities could not aggressively evict people from wetlands in the name of environmental protection while appearing to soften their position on plastic pollution.
Parliament nevertheless endorsed the President’s recommendations on the Excise Duty (Amendment) Bill.
The House also approved Museveni’s proposals on the Income Tax (Amendment) Bill, 2026 by removing the exemption from withholding tax on winnings from land based casinos while maintaining the exemption for winnings paid under the national lottery.
Chairperson of Parliament’s Committee on Finance, Planning and Economic Development Maximus Ochai said exempting casino winnings would create an uneven tax system and encourage tax avoidance.
“The committee agrees with the President that the exemption granted to land based casinos would create unnecessary opportunities for tax avoidance and revenue leakage because it establishes different tax treatment for substantially similar gaming activities,” Ochai said.
He said maintaining withholding tax on casino winnings would safeguard an estimated Shs65 billion in projected revenue while ensuring equal treatment of all betting and gaming operators.
The adoption of the President’s proposals comes as the government seeks to strengthen domestic revenue mobilisation. For the 2026/27 financial year, the Uganda Revenue Authority (URA) has been tasked with collecting Shs40.16 trillion in tax revenue as part of an overall domestic revenue target of Shs45.96 trillion, which will help finance the country’s record Shs84.39 trillion national budget.
