Proposed Vehicle Stamp Duty Risks Double Taxation on Registrations and Insurance

Uganda’s Parliament is reviewing the Stamp Duty (Amendment) Bill, 2026, which proposes adding stamp duty to motor vehicle registrations for the first time. Under Clause 4, car registrations would incur Shs200,000, while motorcycles, tricycles, or quadricycles would face Shs50,000. This fee would also apply during ownership transfers.

With over 200,000 motorcycles registered annually, the government aims to tap into this revenue stream from a growing vehicle fleet. However, vehicle owners must legally insure their rides, which already carries a Shs35,000 stamp duty per policy.

The new bill adds registration stamp duty without reducing or waiving the insurance one, creating double taxation. A new motorcycle owner, for instance, would pay Shs50,000 on registration plus Shs35,000 on insurance, totaling Shs85,000. For cars, this jumps to Shs235,000.

This overlap appears to be a drafting oversight rather than deliberate, as both charges hit the same owner for the same vehicle at registration time. Audit firm BDO East Africa highlighted this issue, calling it taxation of the same person twice and urging amendments.

Suggested fixes include exempting insured vehicles from insurance stamp duty during the registration period or lowering the registration fee to offset the existing insurance charge, ensuring revenue goals are met without duplication.

Source: Daily Monitor (Uganda)