New Taxes on Cement, Cooking Oil, and Entertainers Tabled as Uganda Seeks UGX 44.5 Trillion Revenue
KAMPALA – The Ministry of Finance has unveiled a raft of new tax proposals aimed at boosting domestic revenue to fund the record UGX 84.2 trillion national budget for the 2026/27 financial year. If passed by Parliament, Ugandans will face higher prices on cement, cooking oil, paints, and alcoholic spirits, while event organisers will be required to withhold tax on payments to public entertainers.
The proposals are contained in two separate bills—the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026—both tabled by the Minister of State for Finance, Henry Musasizi.
Withholding Tax on Entertainers and Telecoms
Under the Income Tax (Amendment) Bill, the government seeks to introduce a withholding tax on public entertainers. According to the proposed Section 135B, any person who pays a public entertainer will be required to withhold tax on the gross payment at a rate to be prescribed in Part XVI of the Fourth Schedule. The measure effectively places the obligation on event organisers, promoters, and venues to deduct the tax before settling payments to artists, musicians, and other performers.
The Bill also proposes a new withholding tax on telecommunication service providers. A proposed Section 135A would require any person paying a telecommunication service provider to withhold tax on the gross amount of the payment at rates prescribed in Part XIII of the Fourth Schedule.
Excise Duty Hikes on Key Commodities
The Excise Duty (Amendment) Bill, set to come into force on July 1, 2026, proposes significant revisions to excise rates on several goods and services.
· Cement and adhesives: The Bill seeks to impose an excise duty of UGX 1,000 per 50 kilograms on cement, adhesives, grout, white cement, and lime. Industry players warn the move will increase construction costs across the country.
· Imported spirits: A levy of UGX 3,500 per litre—or 80% of the value, whichever is higher—will apply to imported un-denatured spirits with an alcoholic strength by volume of less than 80%. The measure is intended to protect local manufacturers while raising additional revenue.
· Cooking oil: The Bill introduces a new levy of UGX 500 per litre on cooking oil, a staple commodity whose price is expected to rise sharply if the proposal is approved.
· Paints and varnishes: Locally manufactured or produced paints, varnishes, and lacquers will attract a levy of UGX 50 per litre or per kilogram, whichever is higher, adding to the cost of construction and household maintenance.
Revenue Context
The tax proposals are part of government’s strategy to raise UGX 44.5 trillion in revenue for the Uganda Revenue Authority (URA) in the 2026/27 financial year. The total national budget is projected at UGX 84.209 trillion.
Parliament is expected to scrutinise the two bills in the coming weeks, with debate likely to focus on the potential inflationary impact of the new levies and the administrative burden of the withholding tax on small-scale event organisers.
Neither the Ministry of Finance nor the Uganda Revenue Authority has yet released detailed impact assessments on the proposed measures.
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