Business 12 June 2026 Daily Monitor (Uganda)
Uganda's 2026/27 Budget: New Taxes to Boost Revenue Collections
The Ugandan government has introduced a raft of new tax measures and adjustments for the Financial Year 2026/27, aiming to significantly increase domestic revenue to Shs45.96 trillion. These changes include adjustments to income tax, VAT, excise duties, and stamp duties, alongside measures to encourage compliance and support specific industries. Source: https://www.monitor.co.ug/uganda/news/national/budget-how-new-taxes-will-squeeze-ugandans-5493670
Uganda’s government is set to bolster its revenue collection for the Financial Year 2026/27 through a series of new tax measures, as outlined in the recently presented national budget. The objective is to amass Shs45.96 trillion in domestic revenue, with Shs40.16 trillion expected from tax sources. Finance Minister Henry Musasizi announced several tax policy reforms approved by Parliament, designed to enhance revenue mobilization while simultaneously fostering economic growth, investment, and job creation.
Key income tax adjustments include an extended exemption for Bujagali Energy Limited until 2032 and an increased Pay As You Earn (PAYE) threshold from Shs235,000 to Shs335,000 monthly, offering some relief to lower-income workers. A new 5 percent withholding tax on interest paid to foreign lenders has been implemented, and landlords can now opt for monthly rental income tax payments.
In an effort to support small businesses, the VAT registration threshold has been raised from Shs150 million to Shs300 million in annual turnover. VAT deferment is also extended to inputs for iron ore processing to encourage industrialization.
Significant increases are noted in Excise Duty rates. The tax on petrol and diesel has risen by Shs200 per litre. Alcoholic beverages will now face a Shs3,500 per litre duty, a substantial jump from Shs1,700. Motorcycles will see their first registration duty increase to Shs500,000. Environmental concerns have prompted higher duties on single-use plastics, cooking oil (from Shs200 to Shs400 per litre), cement (from Shs500 to Shs750 per 50kg bag), and sugar (from Shs100 to Shs200 per kilogramme). New duties are also introduced for paints, varnishes, and cooking fats.
Stamp Duty will now apply to vehicle registration and transfers, with Shs30,000 for motorcycles, tricycles, and quadricycles, and Shs200,000 for other motor vehicles. To encourage tax compliance, waivers on principal tax, penalties, and interest owed up to June 30, 2016, have been approved.
External trade and gaming sectors are also affected, with the environmental levy on imported used clothing doubling to 30 percent of the CIF value, aiming to boost local manufacturing. Taxation on betting activities has been raised from 20 percent to 30 percent.
These measures are intended to meet the government’s revenue targets for the fiscal year. For more details, please refer to the Daily Monitor.