Ugandan Parliament approves new taxes on cigarettes and beer


David Bahati, Uganda’s State Minister for Finance and Economic Planning


Ugandan Parliament has endorsed an increase of the Excise Duty on cigarettes, beer and diesel. It came shortly after a debate on the report presented by the Finance Committee on the Excise Duty Amendment Bill, 2015.

The Excise duty on cigarettes has increased from 35,000 Shillings to 45,000 Shillings while that on hinge lid has been revised from Shillings 69,000 to 75,000.

David Bahati, the State Minister of Finance and Economic Planning says the move to revise the Excise Duty on cigarettes is intended to discourage new consumers and reduce consumption among the old consumers.  Government expects to generate Shillings 10billion from this tax alone. Parliament has also endorsed an increase in Excise Duty on beer.

In its report, the Finance Committee says the increase is expected to boost the contribution of beer to tax revenue without necessarily removing the incentive and preference over the premium beers.

Parliament also endorsed a recommendation by the finance committee to cut down on beer produced from barley grown and malt by 30% so as to encourage research and development into the use of sorghum and locally grown material.

The MPs also agreed to increase excise duty on petrol and diesel from Shillings 950 to 1,000 Shillings and 630 Shillings to 680 Shillings respectively so as to tap into the profits of fuel dealers who benefit from the surge in fuel prices.

Michael Mawanda, the Igara East MP defended the tax increment saying that even with the recent reduction in global fuel prices, local fuel dealers haven’t cut down the pump prices.

Harriet Ntabazi, the Bundibugyo district Woman MP supported the increase in the excise duty on beer saying it could reduce on consumption. Jovah Kamateeka, the Mitooma District Woman MP welcomed the tax increment saying the high consumption of alcohol has negatively affected the youth in the country.