agriculture 17 June 2026 Daily Monitor (Uganda)
Uganda Sugar Farmers Face Income Squeeze as Government Eyes Tax Hike
Sugarcane growers in Uganda are raising concerns that a proposed doubling of excise duty on sugar, from Shs100 to Shs200 per kilogram, will directly reduce their incomes. Farmers argue that tax increases are passed on to them through lower cane prices. Source: https://www.monitor.co.ug/uganda/news/national/sugar-farmers-warn-tax-hike-will-slash-incomes-5499910
Uganda’s sugar farmers are sounding the alarm over a potential increase in excise duty on sugar, warning it could significantly slash their earnings. The government has proposed doubling the duty from Shs100 to Shs200 per kilogram, a move that sugar industry stakeholders fear will ultimately burden growers.
Farmers’ representatives highlighted that millers often deduct taxes before calculating payments to growers. This means any hike in excise duty is likely to be passed on as a reduction in the price paid for sugarcane. “Any increase directly affects farmers. Millers deduct taxes before calculating farmers’ share, meaning the burden is eventually passed on to growers,” stated Julius Katerevu, chairperson of the Uganda National Association of Sugarcane Growers (UNASGO).
Adding to their worries are existing challenges, including rising production costs for fertilizers, agrochemicals, and fuel. Farmers also lament the controversial 5 percent deduction for sugarcane trash, which further erodes their profits. They are urging the government to consider these issues and implement measures to protect their incomes, rather than imposing new taxes.
Industry players point out that the price of sugarcane is directly linked to the price of processed sugar. A higher excise duty could force millers to either increase sugar prices for consumers or, more likely in the eyes of farmers, lower the farm-gate price offered for cane. Robert Atugonza, chairperson of the Masindi Sugarcane Growers Association, calculated that the proposed Shs100 per kilogram increase could lead to farmers losing approximately Shs9,000 per tonne of cane.
There is a tangible threat that if these concerns are not addressed, farmers may pivot to cultivating alternative crops, potentially impacting the overall sugar production in the country, particularly in key regions like Busoga. Stakeholders are appealing to Parliament and the Ministry of Finance to reconsider the proposal.