Business 25 June 2026 Daily Monitor (Uganda)
Kenya's Proposed $308 Sugar Tax Threatens Uganda's Export Boom
Ugandan sugar manufacturers are protesting a significant increase in Kenya's excise duty on imported sugar, fearing it will cripple their exports and violate EAC trade principles. The tax hike from $60 to $308 per ton could severely impact Uganda's sugar sector and the livelihoods dependent on it. Source: https://www.monitor.co.ug/uganda/business/markets/how-kenya-s-308-tax-threatens-uganda-s-sugar-export-boom-5509332
Ugandan sugar manufacturers have voiced strong opposition to a substantial proposed excise duty hike by the Kenyan government, which could severely undermine Uganda’s burgeoning sugar export market.
The new measure, part of Kenya’s Finance Bill 2026, aims to increase the tax on imported sugar from KShs7,500 (approximately $60) per ton to KShs40,000 (approximately $308) per ton, effective July 1. This drastic increase has prompted an urgent appeal from the Uganda Sugar Manufacturers Association (USMA) to Uganda’s East African Affairs Minister, Rebecca Kadaga, urging her intervention.
USMA highlights that Kenya currently imports up to 100,000 tons of sugar annually from Uganda. The proposed tax, they argue, threatens to make Ugandan sugar prohibitively expensive in the Kenyan market, effectively blocking access and contravening the spirit of regional integration within the East African Community (EAC).
Representatives from USMA, including Chairperson Jim Mwine Kabeho and Ashish Monpara of Modern Group, have expressed concerns that this move could lead to significant losses in export revenue, reduce foreign exchange earnings, and disrupt the livelihoods of thousands of Ugandan sugarcane farmers and industry workers.
Kenya’s President William Ruto stated the tax increase is intended to protect local sugar industries and the livelihoods of millions dependent on them. However, Ugandan officials, including Trade State Minister Gen Wilson Mbasu Mbadi, have initiated discussions with their Kenyan counterparts to address the issue. The Ministry of Trade has confirmed engagements are underway.
This situation echoes past trade disputes between the two nations, including a “sugar war” that began in 2011. Despite past agreements to eliminate trade barriers, USMA believes this new tax represents a step backward, potentially reversing gains made in regional trade.
Industry stakeholders emphasize that sugar is a staple food, and such high excise duties could increase the cost of living for consumers and damage the competitiveness of Uganda’s sugar sector, which is a significant contributor to the national economy through employment and farmer support.