Yoweri Museveni Returns Two Tax Bills for Parliamentary Review

Museveni also rejected the proposed increase in excise duty on single-use plastics, which Parliament had approved to rise from 2.5 per cent or US$70 per tonne to 25 per cent or US$1,500 per tonne, whichever is higher.

Ugandan President Yoweri Museveni has declined to sign the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026, sending both back to Parliament for reconsideration. He argued that some of the proposed tax measures could distort competition, encourage tax avoidance and place unnecessary pressure on businesses and the wider economy. The two bills were passed by the 11th Parliament before the start of the 2026/27 financial year. Deputy Speaker Thomas Tayebwa informed lawmakers that the President had objected to specific clauses in both pieces of legislation.

Betting tax exemption questioned over fairness

The President said the exemption would create unequal treatment between businesses offering similar services and could encourage companies to restructure transactions to reduce their tax liabilities. He warned that such a provision could lead to tax avoidance and revenue losses, adding that there was no clear justification for taxing one category of gaming operators while exempting another.

Plastic tax increase seen as too steep

Museveni also rejected the proposed increase in excise duty on single-use plastics, which Parliament had approved to rise from 2.5 per cent or US$70 per tonne to 25 per cent or US$1,500 per tonne, whichever is higher.

While acknowledging the environmental objective behind the proposal, he said the increase was too significant and could raise production costs, discourage investment and affect employment in the plastics industry. He also noted that Uganda currently lacks sufficient alternatives to plastic packaging and recommended further study before introducing such a substantial tax increase.

During the parliamentary discussion, Charles Tebandeke, MP for Bbale County, questioned whether the bills should restart the legislative process under the new Parliament. Deputy Speaker Tayebwa dismissed concerns over delays, stating that the President had acted within the 30-day constitutional timeframe for returning legislation to Parliament.