Uganda Government Introduces New Tax Bills for FY2026/27 with 30% Levy on Secondhand Clothes

The Ugandan government has submitted key tax amendment bills to Parliament for the upcoming 2026/27 financial year. State Minister for Finance, Hon. Henry Musasizi, presented the legislation during a plenary session on April 1, 2026, presided over by Speaker Anita Annet Among.

A standout measure in the External Trade (Amendment) Bill, 2026, is a 30% environmental levy on the cost, insurance, and freight value of imported secondhand clothes and worn articles. This aims to tackle environmental damage from clothing waste and encourage local manufacturing, as outlined by Finance Minister Hon. Matia Kasaija.

Exemptions are proposed for essential imports like vaccines, medicines, medical supplies, and certain pesticides from infrastructure levies and import fees.

The Excise Duty (Amendment) Bill, 2026, brings changes to various products. Imported spirits under 80% alcohol strength face an 80% duty or Shs3,500 per litre, whichever is greater. Cement, adhesives, grout, white cement, and lime attract Shs1,000 per 50kg. Local paints, varnishes, and lacquers get 3% or Shs50 per litre/kg, while imports face 10% or Shs2,000. Cooking fat now incurs Shs500 per litre/kg.

Under the Income Tax (Amendment) Bill, 2026, new withholding taxes include 5% on interest from resident companies to non-resident banks, 6% on non-business asset purchases, 10% on telecom commissions like mobile money, 15% on net gaming winnings, 6% on public entertainers’ payments, and an extra 10% on incomes over Shs120 million.

These bills seek to refine revenue collection and compliance across sectors ahead of the new fiscal year. Source: Howwe Entertainment