Traders and Manufacturers Urge Government to Halt Proposed Tax Hikes for 2026/27

Representatives from the Kampala City Traders Association (KACITA) and the Uganda Manufacturers Association (UMA) appeared before Parliament’s Finance Committee on April 8, 2026, to oppose several tax amendment bills for the 2026/27 financial year.

KACITA Chairperson Isa Sekito highlighted how the proposals arrive amid ongoing economic recovery for micro, small, and medium enterprises. He criticized the 0.5% Alternative Minimum Tax on businesses with prolonged losses, a 10% withholding tax on telecom agents, and insufficient VAT registration threshold hikes from Shs150 million to Shs250 million.

Sekito advocated for a VAT threshold of at least Shs1 billion, cutting the 18% rate to 16% for regional alignment, halving proposed stamp duty increases on land and vehicles, and rejecting excise duty rises on fuel, sugar, cooking oil, and cement, which could fuel inflation. He also slammed doubling surcharges on used clothing to 30%, risking jobs in a Shs280 billion sector.

Meanwhile, UMA, led by Chairperson Richard Sekalala, demanded reforms to the Tax Appeals Tribunal Act, scrapping the 30% pre-appeal payment rule that burdens even erroneous assessments. MP Richard Wanda cited a case where a Shs33 billion URA claim dropped to Shs8 billion post-tribunal.

UMA further pushed to lower the top income tax rate from 40% to 35%, raise the PAYE threshold from Shs235,000 to Shs500,000 amid living costs, and ease excise duties on paints and cement. They supported extending tax holidays for projects like Bujagali Hydro Power.

Both groups stressed that these changes would enhance compliance, investment, and Uganda’s business edge.

Source: Parliament of Uganda