The Ministry of Finance, planning and Economic Development has unveiled its draft tax proposals for the fiscal year 2026/27, aimed at improving revenue collection, boosting tax compliance, and supporting socio-economic development. State Minister for General Duties, Hon. Henry Musasizi, presented the proposed amendments to the Finance Committee of Parliament.
The Minister said the Government of Uganda projects could generate UGX 1,741 billion through the tax policy changes, alongside UGX 3,164 billion from enhanced compliance measures by the Uganda Revenue Authority (URA). If approved, this would contribute to a total revenue effort of 15.5% of GDP, a 0.6 percentage point increase.
These proposals are still under review by Parliament and may be amended before becoming law.
Key Tax Bills Under Consideration
Minister Musasizi presented eight major bills as part of the 2026/27 proposals:
The Income Tax (Amendment) Bill, 2026
The Excise Duty (Amendment) Bill, 2026The Value Added Tax (Amendment) Bill, 2026The Tax Procedures Code (Amendment) Bill, 2026The Stamp Duty (Amendment) Bill, 2026The External Trade (Amendment) Bill, 2026The Lotteries and Gaming (Amendment) Bill, 2026The Traffic and Road Safety (Amendment) Bill, 2026
“The Bills are meant to raise revenue, foster compliance, and assist URA in its work.”, the Minister said.
Proposed Tax Policy Changes
Income Tax:
Option for taxpayers to pay rental income tax monthly.
10% withholding tax on commissions for data and voice bundle agents.0.5% Alternative Minimum Tax for businesses carrying forward losses beyond seven years.6% final withholding tax on non-business assets and public entertainers.
Value Added Tax (VAT):
VAT threshold proposed to increase from UGX 150 million → UGX 250 million.
Clarification of the taxation of imported software.
Stamp Duty:
Land transfer duty increase: 1.5% → 3%.
Stamp duty on motor vehicle and Motorcycle registration both at first registration and on transfer as follows: Motor vehicle registration UGX 100,000 for regular vehicles, UGX 200,000 for commercial motor vehicles and, Motorcycles at UGX 50,000.
Excise Duty:
Diesel & petrol: + UGX 200/litre.
Any other un-denatured spirits of alcoholic strength by volume of less than 80% (<80% alcohol): UGX 1,700 → UGX 3,500/litre.Motorcycles (first registration): UGX 200,000 → UGX 500,000.Single-use plastics: 2.5%/USD 70 → 25%/USD 1,500 per ton.Cement: UGX 500 → UGX 1,000 per 50 kg.Sugar: UGX 100 → UGX 300 per kg.Cooking fat/fatty acids: UGX 500 per litre/kg.Cooking oil: UGX 200 → UGX 400 per litre.
Traffic and Road Safety:
Maximum car age for import reduced from 15 → 13 years.
Proposed graduated environmental levy on imported used motor vehicles.
Impact of the Proposed Tax Changes
The 2026/27 tax proposals aim to expand Uganda’s tax base, improve compliance, and fund government priorities. Businesses and individuals should track these changes as they may impact taxes, vehicle importation, and excise duties if approved.
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