By KT Reporter
Parliament has considered and approved a raft of bills introducing or increasing taxes on various goods intended to raise revenue to fund government activities in the new financial year.
The bills including the Value Added Tax (Amendment) Bill, 2026; the Stamp Duty (Amendment) Bill, 2026; the External Trade (Amendment) Bill, 2026; the Tax Procedures Code (Amendment) Bill, 2026; and the Excise Duty (Amendment) Bill, 2026 were first scrutinised by the House Committee on Finance, whose Chair, presented committee reports to the House presided over by Speaker, Anita Among, sitting on Tuesday, 21 April 2026.
- Parliament passed the Value Added Tax (Amendment) Bill, 2026, increasing the VAT registration threshold from Shs150 million to Shs300 million in a move aimed at easing compliance pressure on small businesses.
Presenting the Finance Committee report, Chairperson Amos Kankunda said the adjustment reflects economic changes and is intended to reduce compliance costs for small and medium enterprises.
“The current threshold has not changed since 2015 despite inflation and growth in business activity. As a result, many small businesses are required to register for VAT, file monthly returns and often hire accountants, which is costly and time consuming,” Kankunda said.
He noted that businesses in the Shs150 million to Shs250 million bracket contribute only a small share of VAT revenue.
“In practice, most businesses in this range contribute about 3 percent of total VAT collected,” he added.
The House rejected a minority proposal presented by Hon. Karim Masaba who argued that this remained too low and would still burden small businesses. He instead pushed for a Shs500 million threshold.
“Increasing the VAT registration threshold to Shs500 million would reduce administrative and compliance costs for both taxpayers and government, and allow small businesses more space to grow,” Masaba said.
State Minister for Finance Planning and Economic Development (General Duties) Henry Musasizi presented revenue scenarios, noting that a Shs250 million threshold would generate Shs349.9 billion, while Shs300 million would yield Shs358.3 billion. A Shs500 million threshold, he warned, would result in a revenue loss of about Shs6.99 billion.
• In the External Trade (Amendment) Bill, 2026, Parliament introduced a 30 percent environmental levy on all imported second hand clothes, commonly known as “mivumba.”
Minister Musasizi said that passing the Bill would encourage the growth of Ugandan textile industries but also generates revenue for the country.
Kankunda said the move is part of a broader government strategy to align with East African Community (EAC) goals to phase out second-hand clothing imports and promote the “Buy Uganda, Build Uganda” (BUBU) policy.
However, the proposal faced opposition from a minority report presented by Hon. Brenda Nabukenya (NUP, Luweero District) who argued that the tax hike is a “punitive” measure that disproportionately affects low-income Ugandans who rely on the affordable second-hand market for their basic dignity.
• Meanwhile Parliament also passed the Tax Procedures Code (Amendment) Bill, 2026, introducing a sweeping tax amnesty that will wipe out all tax arrears, including penalties and interest, owed by taxpayers as of June 30, 2016, in what emerged as one of the most debated revenue reforms in recent years.
Kankunda said the tax amnesty is intended to clean up Uganda Revenue Authority (URA) ledger records, reduce long-standing disputes, and give taxpayers a fresh start.
He said many taxpayers had previously been unable to benefit from earlier waivers due to inconsistencies in URA ledger reconciliations, adding that the new arrangement would allow the authority to focus on current, enforceable tax obligations.
• Further, Parliament passed the Excise Duty (Amendment) Bill, 2026, revising excise duty on construction materials, increasing tax on cement, adhesives and grout from Shs500 to Shs750 per 50 kilogramme bag. Government justified the increment, noting that the rate had not been adjusted since 2015.
I addition, Parliament approved an increase in duty on imported denatured spirits (below 80 percent alcohol content) by Shs1,800 per litre, making the total tax Shs3500.
In addition, the Bill introduces a tax of Shs400 per litre of cooking oil and a levy of US$1,500 per tonne on plastics to address environmental concerns and broaden the tax base. The House also approved an increase in excise duty on cane sugar from Shs100 to Shs200, and raised the first registration fee for motorcycles from Shs200,000 to Shs500,000.
On paints, varnishes and lacquers, Parliament imposed a 10 percent excise duty on imported products, while maintaining a lower rate of 3 percent on locally manufactured equivalents.
- Meanwhile, Parliament passed the Stamp Duty (Amendment) Bill, 2026, rejecting proposed increases in taxes on land and motorcycle transfers while approving new measures on motor vehicle transactions.
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