President Yoweri Museveni has declined to assent to the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026, returning the two pieces of legislation to Parliament for reconsideration over concerns that some proposed measures could distort competition, encourage tax avoidance and hurt economic activity.
The two bills were passed by the 11th Parliament ahead of the 2026/27 financial year and were expected to take effect with the implementation of the new national budget in July 2026.
However, during a sitting of Parliament on 14 July 2026, Deputy Speaker Thomas Tayebwa informed legislators that President Museveni had raised objections to specific provisions in both bills, particularly those relating to withholding tax on betting winnings and the proposed increase in excise duty on single-use plastics.
“The President is against the passing into law of Clause 11 of the Income Tax Amendment Bill, 2026,” Tayebwa told Parliament.
Clause 11 proposed the introduction of withholding tax on winnings from betting and gaming activities but included an exemption for winnings obtained from land-based casinos licensed under the Lotteries and Gaming Act, 2016.
President Museveni argued that the exemption would create unequal treatment among businesses operating within the same sector and could provide opportunities for tax avoidance.
In his communication to Parliament, the President questioned why operators engaged in similar economic activities should be subjected to different tax obligations.
“There is no justification for exempting one category while taxing the other,” Museveni said.
He warned that allowing exemptions for certain gaming operators could encourage businesses to restructure their operations in order to minimise tax liabilities, resulting in revenue losses for government.
“The exemption creates opportunities for tax avoidance and revenue leakage,” the President said.
Concerns Over Plastic Tax Increase
President Museveni also rejected the proposed increase in excise duty on single-use plastics contained in the Excise Duty (Amendment) Bill, 2026.
Parliament had approved an increase in the tax from the existing rate of 2.5 percent or US$70 per tonne to 25 percent or US$1,500 per tonne, whichever amount was higher.
The proposed increase was intended to discourage plastic pollution and promote environmentally friendly alternatives. However, Museveni argued that the sharp rise could create significant financial pressure on manufacturers and businesses that rely on plastic packaging.
“The proposed increase is substantial and is likely to impose significant cost pressures on manufacturers engaged in the production and use of single-use plastics,” Museveni said.
He warned that increased production costs could affect investment, manufacturing growth and employment opportunities in the sector.
The President also noted that Uganda’s manufacturing industry is not yet sufficiently prepared to transition to alternative packaging materials due to limited availability of affordable substitutes.
“Viable alternatives to plastic packaging are not yet readily available in Uganda,” he said.
Museveni recommended further assessment before introducing the proposed increase as part of environmental protection measures.
Parliament Questions Legislative Process
The return of the bills also raised questions among legislators about whether the proposals should undergo fresh consideration following the dissolution of the 11th Parliament.
Hon. Charles Tebandeke, the Member of Parliament for Bbaale County, questioned whether the bills should be reintroduced through normal legislative procedures since they had originally been handled by the previous Parliament.
“The law assumes that the 11th Parliament that was handling these bills was dissolved and the matter was overtaken by events,” Tebandeke said.
However, Deputy Speaker Thomas Tayebwa dismissed concerns that President Museveni had exceeded the constitutional deadline for returning the bills.
He reminded legislators that the Constitution requires the President to either assent to a Bill or return it to Parliament within 30 days after receiving it.
“The Constitution is very clear, 30 days from the date it is presented to him or her,” Tayebwa said.
The bills will now return to Parliament, where lawmakers will reconsider the President’s objections and either amend the contested clauses or pass the legislation again for possible presidential assent.