Alcohol Industry Warns Against Tax Policies Fueling Illicit Market

The formal alcohol sector in Uganda is sounding an alarm over potential tax hikes, fearing that increased levies will inadvertently bolster the illicit alcohol market. Industry players are concerned that higher prices for legitimate products will drive consumers, who have slightly more disposable income, towards unregulated and potentially harmful alternatives.

A report by Euromonitor International highlights the growing dominance of illicit alcohol, estimating its share of total consumption in Uganda to have increased from 64.5% in 2020 to 67.3% in 2024. While Uganda’s economic growth presents opportunities, the current trend indicates consumers are opting for non-standardized, untaxed beverages.

These illicit products, which bypass the rigorous standards set by the Uganda National Bureau of Standards (UNBS), pose significant health risks. The industry points to recurring tragic incidents of hospitalizations and deaths linked to the consumption of unregulated spirits and informal brews. As responsible entities in the formal market, they express deep concern over these public health implications.

The industry’s plea is for tax policies that are carefully considered and developed in consultation with stakeholders. They argue that blanket directives without industry input could stifle legitimate businesses and exacerbate the public health crisis associated with illicit alcohol consumption. The focus, they contend, should be on creating a level playing field that encourages compliance and discourages the proliferation of dangerous, unregulated products.

Source: https://www.monitor.co.ug/uganda/business/prosper/don-t-tax-us-into-the-hands-of-illicit-players-says-njuki-5612046