national 21 April 2026 Howwe Entertainment
Mivumba Hit with 30% Tax as VAT Threshold Raised to Shs300m
Ugandan Parliament has approved new tax measures, including a 30% levy on imported second-hand clothes and an increased VAT registration threshold to Shs300 million, aiming to boost government revenue and support local industries. Source: https://www.howwe.ug/news/national/42845/mivumba-hit-with-30-tax-as-parliament-raises-vat-threshold-to-shs300m
Parliament has passed a series of tax amendments aimed at increasing government revenue for the upcoming financial year. Among the significant changes is the introduction of a 30% environmental levy on all imported used clothing, commonly known as ‘mivumba’. This move is intended to stimulate the growth of Uganda’s textile sector and align with East African Community initiatives to phase out used clothing imports, promoting the ‘Buy Uganda, Build Uganda’ agenda.
The Value Added Tax (Amendment) Bill, 2026, saw the VAT registration threshold raised from Shs150 million to Shs300 million. This adjustment is designed to alleviate compliance burdens on small and medium-sized enterprises, recognizing that the previous threshold had not been updated since 2015 despite economic growth and inflation.
In other fiscal updates, Parliament approved changes to excise duties. Cement, adhesives, and grout will now face an increased tax of Shs750 per 50kg bag, up from Shs500. Taxes on imported spirits, cooking oil (Shs400 per litre), and plastics (US$1,500 per tonne) were also adjusted. Furthermore, the excise duty on cane sugar has doubled to Shs200 per litre, and the initial registration fee for motorcycles has been raised to Shs500,000.
A tax amnesty has also been implemented, wiping out tax arrears, penalties, and interest owed by taxpayers up to June 30, 2016. This measure aims to cleanse URA ledger records and provide taxpayers with a clean slate.