Civil Society Organisations (CSOs) have welcomed the proposal by Government to slap taxes on tobacco products, but also called for annual increment of these taxes. CSOs say tobacco products have a big disease burden on Ugandans.
The call was made by Moses Talibita, Legal Officer, Uganda National Health Consumers’ Organisation, a member of Tax Justice Alliance Uganda, during a press briefing in Kampala over the weekend, who described the proposal in the Excise Duty Amendment Bill 2025 as long overdue since Government last imposed a levy on tobacco products in 2017.
“After seven years, we are calling on Government to annually increase taxes on cigarettes. In other words, we are expecting this increment annually, we are expecting this increment in the next cycle so that it caters for inflation, it also tries to mitigate the disease burden and indeed save citizens from the disease burden that tobacco brings onto our market,” explained Talibita.
Although the Uganda Health Consumers Organisation welcomed the proposal, they argued that Government needed to have looked at the guidance by World Health Organisation and also end the preferential treatment given to local tobacco products in Uganda and have the taxes apply to both local and imported tobacco products.
“We welcome Government’s spirit in rising taxes on tobacco products but we are saying it has been long overdue. The issues that we have on this particular amendment is on the structure, the spirit rising is welcome, but this increment, we are afraid will not impact price and help Government generate the needed revenue to even mitigate the disease burden that these particular products bring to the citizens. So that means, the Uganda Cancer Institute, the Lung Institute and Uganda Heart Institute will still remain ineffectively funded just because Government hasn’t recouped or rather generated the needed revenue, seven years down the road, inflation has been affecting this particular increase,” argued Talibita.
He added, “We have seen preferential treatment given to locally manufactured products, as opposed to the imported ones. So, this particular structure should create harmony and do away with preferential treatment to the local, as opposed to the local one.”
Tax Justice Alliance Uganda’s position followed a move by Government to propose amendments to the Excise Duty Act, Cap. 336 to provide for the remission of excise duty paid on damaged, expired or obsolete goods; to revise the rate of excise duty on certain excisable goods and services under Schedule 2 to the Act and for related matters
The Activists greed with all the amendments proposed as they intend to increase revenue and regulate the so call “Sin goods and service”, but have reservations on proposals in Section 2 (e) which propose substituting for items 8 (a) and (b) which are Motor spirits (gasoline) at Shs1650 per liter and (b) Gas oil (automotive, light, amber for high-speed engines) at Shs1380 per litre”
Aloysious Kittengo, Program Coordinator, Financing for Development, SEATINI Uganda noted that although imposing a levy on fuel products has proved to be a cash cow for Government, such a levy is unfair as it will increase cost of doing business in Uganda.
“Although, increasing tax on fuel is a cash cow and a soft point for revenue collection, an increase in fuel 2025 following an increase in 2024 is unfair as it will make fuel expensive to the fuel users, cost of production among others. We are cognizant of the need to be in line with the Domestic Revenue Mobilisation strategy of increase the prices of fuel every two year but also, we need to ensure that tax is used as a tool for development not for revenue collection alone. Furthermore, government needs to be cognizant of the fact that even citizens were affected by the impact of COVID-19, and they are just recovering,” argued Kittengo.
Tax Justice Alliance Uganda urged Parliament to reject the proposal. During the formal tabling of the Tax Bills before Parliament’s Finance Committee, Minister of State for Finance, Henry Musasizi revealed that the proposal to increase taxes on fuel had been dropped by Government in order to fulfil the promise he made during the laying of the 2025/25 Budget Framework Paper not to impose new taxes.
Musasizi said, “Government Under the excise duty amendment bill number two, we propose to amend the bill by deleting clause 3E, which proposed to increase the excise duty rates on fuel. The bad one I have removed because I want to be consistent with my promise in the Budget Framework Paper (BFP) where I said we will not be introducing new taxes. The reason for dropping this proposal is to ensure that inflation remains controlled, avoid increasing costs of doing business and hence promoting economic growth.”
Indeed, during the Press Briefing, Kennedy Oluma, Coordinator, Uganda Parliamentary Network on Illicit Financial Flows and Tax confirmed the change in Government’s position on walking back on proposed tax on fuel because the current fuel prices are already chocking Ugandans.
“I want to start on a good note for us as a civil society one of the one of the things we are encouraging or we are requesting our members of Parliament to reject is the proposal to have an increase on fuel why I’m saying it is on a good note is that I can I can attest within this week the Minister requested that he be given a leave to withdraw and I think this may not be a matter to discuss and we are very happy that we do not need an increase on fuel and I do not expect a government to bring that increase on fuel over and again because currently even the prices on our fuel is already so choking and we do not think that it is a viable venture for the government,” explained Oluma.
