On 1 April 2026, the Ministry of Finance, Planning and Economic Development tabled the Excise Duty (Amendment) Bill, 2026 before Parliament. If passed, the proposed changes will take effect on 1 July 2026, and among all the tax proposals, this Bill is arguably the most immediate and far-reaching in its impact on everyday life.
Excise duty is fundamentally a consumption tax. It is not paid directly in the form of a tax return, but is embedded in the price of goods and services. This makes it one of the most efficient tools for revenue mobilization, but also one of the most sensitive, as it directly affects the cost of living.
Under the current law, excise duty applies to selected goods such as fuel, alcohol, cement, plastics, and certain consumer products, with rates that have been relatively stable over time. These taxes have traditionally been justified on two grounds: raising revenue and influencing consumption behavior, for example discouraging harmful or environmentally damaging products.
The Ministry is now proposing significant upward revisions across multiple categories, signaling a strong push toward increased domestic revenue mobilization.
The most impactful proposal is the increase in fuel excise duty, with petrol rising from UGX 1,550 to UGX 1,750 per litre and diesel from UGX 1,230 to UGX 1,430 per litre. Fuel is a universal input cost. It affects transportation, manufacturing, agriculture, and service delivery. An increase in fuel duty therefore has a multiplier effect across the entire economy.
In practical terms, if passed, this will translate into higher transport fares, increased distribution costs for goods, and ultimately higher retail prices. For businesses, especially those reliant on logistics, this will compress margins unless costs are passed on to consumers.
The Bill also proposes to double excise duty on cement from UGX 500 to UGX 1,000 per 50kg bag. This directly impacts the construction sector, which is already sensitive to cost fluctuations. For individuals, it means more expensive housing. For developers, it increases project costs and may slow down real estate activity.
Basic household commodities are also affected. Excise duty on sugar will increase from UGX 100 to UGX 300 per kilogram, while cooking oil will rise from UGX 200 to UGX 400 per litre. These are essential goods consumed daily, meaning the tax will disproportionately affect lower- and middle-income households.
One of the most aggressive policy shifts is in the taxation of plastics, where excise duty jumps from 2.5 percent (or USD 70 per tonne) to 25 percent (or USD 1,500 per tonne). This is clearly an environmental measure aimed at reducing plastic usage. However, plastics are deeply embedded in packaging across industries, from food and beverages to pharmaceuticals, meaning the cost increase will cascade through supply chains.
The introduction of excise duty on paints, varnishes, lacquers, and cooking fats further broadens the tax base. These products are widely used in both industrial and domestic settings, ensuring that the tax impact is widespread.
If passed, the overall effect of this Bill will be inflationary. Businesses will face increased input costs, many of which will be passed on to consumers. Households will experience a higher cost of living, particularly in food, transport, and housing.
However, from a fiscal perspective, the Bill strengthens Uganda’s ability to generate revenue internally, reducing reliance on external borrowing. It also aligns with broader policy goals such as environmental protection and consumption control.
In conclusion, the Excise Duty (Amendment) Bill, 2026 is not just a tax measure. It is an economic signal. It reflects a government prioritizing revenue and sustainability, but doing so in a way that will require both businesses and households to adjust significantly if passed.