LIST: Here are the Taxes Ugandans Will Start Paying on July 01

As Uganda embarks on the 2026/27 financial year, citizens will face a fresh round of taxes and levies aimed at helping the government raise more domestic revenue to fund an ambitious Shs84.39 trillion budget.

The budget, unveiled by Finance Minister Henry Musasizi and approved by Parliament, relies heavily on domestic revenue collection, which is expected to contribute Shs45.96 trillion. Of this amount, Shs40.16 trillion will come from taxes.

To boost collections, Parliament approved a package of tax measures that will take effect on July 1, affecting fuel, alcohol, motorcycles, sugar, cement, cooking oil and a range of other products.

While the government argues that the measures are necessary to support economic growth, industrialisation and job creation, consumers are likely to feel the effects through higher prices for several everyday goods.
Below are the key tax changes.

Fuel

Motorists will pay more for fuel after Parliament increased excise duty on petrol and diesel by Shs200 per litre.

The measure is expected to raise about Shs450 billion in additional revenue, making it the single biggest revenue-raising tax measure in the new financial year.

Alcohol

Excise duty on selected alcoholic beverages has more than doubled, rising from Shs1,700 to Shs3,500 per litre.
The increase affects products such as Uganda Waragi, Black Label, Cognac and Amarula and is projected to generate Shs85 billion.

Motorcycles

The cost of registering motorcycles will rise sharply.

Excise duty on motorcycles at first registration has been increased from Shs200,000 to Shs500,000, a move expected to bring in Shs26 billion.

In addition, a new stamp duty of Shs30,000 will be charged on the first registration and transfer of motorcycles, tricycles and quadricycles.

Motor Vehicles

Owners of cars and other motor vehicles will also face a new stamp duty.

The government has introduced a Shs200,000 charge on the first registration and transfer of all motor vehicles other than motorcycles.

Together with motorcycle registration fees, the measure is expected to generate about Shs30 billion.

Sugar

Consumers will pay more tax on sugar after excise duty was doubled from Shs100 to Shs200 per kilogram.
The measure is expected to raise Shs25 billion.

Cooking Oil

Excise duty on cooking oil has been increased from Shs200 to Shs400 per litre.

The Treasury expects the measure to generate Shs25 billion.

Cooking Fat
Cooking fat will also attract excise duty.

The new tax has been set at Shs500 per litre or kilogram and is projected to raise Shs15 billion.

Cement

The government has increased excise duty on cement from Shs500 to Shs750 per 50-kilogram bag.
The tax is expected to generate Shs15 billion, although it may add to construction costs in a country experiencing rapid urbanisation.

Single-Use Plastics
Manufacturers and importers of single-use plastics face one of the steepest tax increases.

Excise duty has been raised from 2.5 percent, or USD70 per tonne, to 25 percent, or USD1,500 per tonne.

Officials say the move is intended both to protect the environment and raise an additional Shs10 billion.

Paints and Varnishes 

A new excise duty has been introduced on paints and varnishes.

Locally manufactured products will attract a tax of 3 percent or Shs50 per litre or kilogram, whichever is higher.

Imported paints and varnishes will be charged 10 percent or Shs2,000 per litre, whichever is higher.

The measure is expected to generate Shs24 billion.

Tax Reliefs and Incentives

Not all the changes involve higher taxes.

PAYE Relief for Low-Income Workers

The monthly Pay As You Earn (PAYE) threshold has been increased from Shs235,000 to Shs335,000.

This means lower-income workers will retain more of their earnings, although the government estimates it will forgo about Shs96 billion in revenue annually.

VAT Relief for Small Businesses

The annual Value Added Tax (VAT) registration threshold has been doubled from Shs150 million to Shs300 million.
The government says this will reduce compliance costs for smaller businesses and improve tax administration.

Monthly Rental Tax Payments

Landlords will now be allowed to file and pay rental income tax monthly instead of waiting for annual assessments, a measure intended to improve compliance and reduce tax arrears.

Tax Holiday for Luxury Tourism Investors

Developers investing at least USD10 million in hotels and luxury tourism facilities—or USD5 million in the case of Ugandan investors—will qualify for a tax holiday under new incentives designed to attract investment into the tourism sector.

New Tax on Foreign Lenders

A 5 percent withholding tax has been introduced on interest payments made to foreign lending institutions, a measure intended to broaden the tax base and ensure foreign lenders contribute to domestic revenue mobilisation.

Taken together, the measures illustrate the balancing act facing the government. On one hand, it is seeking to collect more revenue from consumption and imports.

On the other, it is offering selective relief to low-income earners, small businesses and strategic investors. For most households, however, the most immediate impact is likely to be felt at fuel stations, construction sites, supermarkets and bars from July 1.

You can read the full budget speech HERE.

Also read about salary increment for primary school teachers, secondary school arts teachers and BTVET instructors Here.