Kampala — The government has tabled a sweeping set of tax amendments for the 2026/27 financial year, targeting an additional UGX 4.9 trillion in revenue as part of efforts to boost domestic resource mobilisation and finance national priorities.
Presenting the proposals to the Finance Committee of Parliament of Uganda, State Minister for General Duties Henry Musasizi said the measures are expected to significantly increase the country’s revenue effort.
“Government projects to generate UGX 1,741 billion in FY 2026/27 from the tax policy proposals contained in the bills and UGX 3,164 billion from URA administration measures,” Musasizi said. “This contributes to the projected revenue effort of 15.5% of GDP, representing a growth of 0.6 percentage points.”
The Minister explained that the proposals, presented by the Ministry of Finance, Planning and Economic Development, are designed not only to raise revenue but also to improve compliance and widen the tax base.
“The Bills are meant to raise revenue, foster compliance and assist Uganda Revenue Authority in its work,” he said, adding that “revenue mobilization plays a critical role in financing Government priorities for socio-economic transformation.”
Broad tax reform package
The tax package includes eight amendment bills covering income tax, VAT, excise duty, stamp duty, and tax procedures, among others. These include the Income Tax (Amendment) Bill, the Value Added Tax (Amendment) Bill, and the Excise Duty (Amendment) Bill.
Musasizi noted that the reforms are complemented by enhanced enforcement measures aimed at bringing more taxpayers into the formal system. “The compliance strategies are designed to expand the tax base by bringing on board persons currently outside the tax net,” he said.
Key proposals
Under the Income Tax amendments, the government plans to introduce a monthly payment option for rental income tax and a 10% withholding tax on commissions earned by data and voice bundle agents. A 0.5% Alternative Minimum Tax will also be imposed on businesses that report losses for more than seven consecutive years.
In addition, a 6% final withholding tax will apply to non-business assets, while public entertainers will be subject to a 6% withholding tax.
For VAT, the threshold for registration will be raised from UGX 150 million to UGX 250 million, a move expected to ease compliance for small businesses. The proposals also clarify the taxation of imported software.
Higher duties on fuel, alcohol, and plastics
Excise duty measures feature prominently, with fuel prices set to rise following a proposed UGX 200 increase per litre on petrol and diesel. Duties on alcoholic spirits, sugar, cement, and cooking oil are also set to increase.
Government is also targeting environmental concerns by extending excise duty to all single-use plastics and sharply increasing the rate to 25% or USD 1,500 per tonne.
Motorcycle taxes will also rise, including an increase in excise duty at first registration from UGX 200,000 to UGX 500,000.
Changes to property and transport taxes
Stamp duty on land transfers will double from 1.5% to 3%, while new charges will be introduced on motor vehicle and motorcycle registration and transfers.
In the transport sector, proposed amendments to the Traffic and Road Safety law will reduce the allowable age of imported vehicles from 15 to 13 years and introduce a graduated environmental levy on used cars.
Focus on growth and sustainability
Musasizi emphasised that the reforms are aligned with the government’s broader economic agenda.
“These measures are aimed at strengthening domestic revenue mobilisation while supporting sustainable development and environmental protection,” he said.
The tax bills are now under scrutiny by Parliament’s Finance Committee before being debated and potentially passed into law.