By Ankit Jangla, Bruno Kalibbala and Bruno Edwin Amanya
The Excise Duty (Amendment) Bill, 2026 introduces a series of revisions to the rates applicable to various excisable goods and services. These proposed changes, structured under Schedule 2 of the Principal Act, seek to adjust both specific and ad valorem rates across a wide spectrum of products, ranging from industrial materials and fuel to everyday consumer goods.
The primary objectives behind these amendments include maintaining the real value of tax revenue against inflationary pressures and broadening the tax base. If passed into law, these measures will take effect on 1st July 2026, necessitating a proactive review of cost structures by businesses operating within the affected sectors.
Construction and Industrial Materials
The construction sector is subject to several proposed rate increases intended to account for inflation and enhance revenue collection. Specifically, the duty on cement, adhesives, grout, white cement, or lime is proposed to double from UGX 500 to UGX 1,000 per 50kgs. This adjustment is framed as a measure to ensure that the revenue generated from the construction sector keeps pace with the rising costs of goods and services.
Furthermore, the Bill introduces entirely new excise duties on paints, varnishes, and lacquers to further increase government revenue from the construction industry. Locally manufactured or produced versions of these items would attract a rate of 3% or UGX 50 per litre/kg, whichever is higher. Conversely, imported paints and varnishes would face a significantly higher rate of 10% or UGX 2,000 per litre/kg, whichever is higher, creating a distinct tax differentiation between local and foreign products.
Fuel and Automotive Adjustments
Proposed changes to fuel duties are designed to maintain the real value of excise duty by accounting for the impact of inflation over time. The duty on Motor Spirit (Petrol) is proposed to increase from UGX 1,550 to UGX 1,750 per litre, while the rate for Gas Oil (Diesel) is set to rise from UGX 1,230 to UGX 1,430 per litre. These increments are consistent with the government’s strategy of ensuring that fuel taxes provide a stable and predictable source of revenue.
In addition to fuel, the automotive sector faces new costs at the point of registration. The excise duty for motorcycles at their first registration is proposed to increase from UGX 200,000 to UGX 500,000. This adjustment is intended to increase government revenue from a rapidly growing sector and is complemented by other measures, such as the introduction of stamp duty on the registration and transfer of various motor vehicles.
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The Bill includes aggressive measures targeting single-use plastics and products associated with public health goals. The duty on sacks and bags of polymers of ethylene is proposed to increase from 2.5% (or USD 70 per ton) to 25% (or USD 1,500 per ton), whichever is higher. This proposal expands the application of the rate to various other single-use plastics, including disposable plastic cups, straws, bottles, and stirrers, although essential packaging for items like food, juice, and sanitary pads remains excluded.
To address public health concerns, the government is also proposing to triple the duty on cane or beet sugar and chemically pure sucrose in solid form, raising it from UGX 100 to UGX 300 per kg. This measure is explicitly intended to discourage excess sugar consumption among the population while simultaneously generating additional revenue. Similarly, the minimum specific tax on imported undenatured spirits is set to rise to UGX 3,500 per litre to discourage importation and promote demand for locally produced alternatives.
Essential Consumer Goods
Adjustments are also proposed for common household products to broaden the tax base and increase general government revenue. The duty on cooking oil is proposed to double from UGX 200 to UGX 400 per litre. These changes reflect a broader fiscal strategy of tapping into high-volume consumer goods to ensure a steady stream of revenue for the national treasury.
Additionally, a new excise duty is proposed for cooking fat at a rate of UGX 500 per litre or kg. This introduction further demonstrates the government’s intent to broaden the tax net within the food and household goods sector. Stakeholders in the supply chain for these essential items will need to evaluate the potential impact on consumer prices and demand once these adjustments take effect.
This article is an extract from the comprehensive Grant Thornton: Proposed Uganda Tax Amendments 2026 commentary.
This article is co-authored by Ankit Jangla (Director – Tax), Bruno Kalibbala (Manager – Legal and Tax), and Bruno Edwin Amanya (Senior Associate). To access the full 2026 analysis or to consult on how these excise shifts will impact your business, contact Grant Thornton Uganda today at +256 200 807 600 or info@ug.gt.com. Schedule a comprehensive tax health check now to ensure your business remains resilient and 2026-ready.
