Parliament Approves 30% Levy on Mivumba, Raises VAT Threshold to Shs300m

Uganda’s Parliament has approved key tax amendments to fund the upcoming financial year. The session, chaired by Speaker Anita Among on April 21, 2026, saw State Minister Henry Musasizi and Finance Committee Chair Amos Kankunda leading discussions.

The Value Added Tax (Amendment) Bill raised the VAT registration threshold from Shs150 million to Shs300 million. This change aims to cut compliance burdens for small enterprises amid rising inflation since 2015. Kankunda highlighted that businesses below Shs250 million contribute just 3% of VAT revenue, justifying the relief. A push for Shs500 million by MP Karim Masaba was rejected, as Musasizi cited revenue projections favoring Shs300 million.

A major highlight is the 30% environmental levy on imported second-hand clothes (mivumba) under the External Trade (Amendment) Bill. Officials say it will boost local textile industries, align with East African Community goals, and promote the ‘Buy Uganda, Build Uganda’ initiative. MP Brenda Nabukenya opposed it, calling the tax harsh on low-income shoppers reliant on affordable clothing.

The Tax Procedures Code (Amendment) Bill offers a full amnesty on tax arrears up to June 30, 2016, clearing penalties and interest. This reform seeks to resolve disputes and refocus the Uganda Revenue Authority on current collections.

Excise duties saw increases too: cement and grout from Shs500 to Shs750 per 50kg bag; denatured spirits by Shs1,800 per litre to Shs3,500 total; cooking oil at Shs400 per litre; plastics at US$1,500 per tonne; cane sugar from Shs100 to Shs200 per unit; and motorcycle first registration from Shs200,000 to Shs500,000. Imported paints face 10% duty, versus 3% for local ones.

The Stamp Duty (Amendment) Bill nixed hikes on land and motorcycle transfers but added measures for motor vehicles.

Source: Parliament of Uganda