Museveni Returns Tax Bills to Parliament Citing Concerns

President Yoweri Museveni has opted not to assent to the Income Tax (Amendment) Bill, 2026, and the Excise Duty (Amendment) Bill, 2026. These two legislative proposals, passed by the previous Parliament ahead of the new financial year, have been returned to the current legislative body for further review.

Sources from Parliament indicate that the President’s objections are rooted in specific clauses within both bills. A key concern lies within Clause 11 of the Income Tax Amendment Bill. This clause proposed a withholding tax on betting and gaming winnings but included an exemption for those derived from land-based casinos. President Museveni argues this exemption creates an uneven playing field, potentially encouraging tax avoidance and revenue loss.

He questioned the rationale for different tax treatments for businesses engaged in similar economic activities, stating, “There is no justification for exempting one category while taxing the other.” This exemption, he warned, could lead businesses to restructure their operations to minimize tax obligations.

Furthermore, the President has raised objections to the significant increase in excise duty on single-use plastics, as outlined in the Excise Duty (Amendment) Bill. Parliament had previously approved a substantial hike from 2.5 percent or US$70 per tonne to 25 percent or US$1,500 per tonne, whichever is higher, with the aim of promoting environmental protection.

However, President Museveni expressed concerns that this drastic increase could impose significant cost pressures on manufacturers. He also noted that Uganda’s manufacturing sector might not be fully prepared to transition to alternative packaging materials, highlighting a lack of readily available viable substitutes. He recommended further study before implementing such a substantial environmental policy measure.

Deputy Speaker Thomas Tayebwa addressed procedural questions regarding the bills’ reconsideration, clarifying that the President’s return of the bills falls within the constitutional 30-day limit. The legislative process will now involve Parliament revisiting these tax proposals in light of the President’s expressed concerns.

This development was reported by the Parliament of Uganda.