Government Reviews Sugar Tax Hike After Manufacturers Warn of Industry Strain

What the report says

Uganda’s Ministry of Finance is reviewing a plan to double excise duty on sugar, after manufacturers said the change could weaken consumption, production and overall revenue. The proposal would raise the levy from Shs100 to Shs200 as part of the government’s revenue-raising and compliance measures for the 2026/27 financial year, according to Nile Post.

Finance Minister Henry Musasizi met representatives of the Uganda Sugar Manufacturers Association to hear their concerns and said the ministry would study them for two weeks before deciding the next step. The industry group argued that the increase would add strain at a time when sugar prices have fallen and production capacity has expanded significantly. It also warned that a higher tax could reduce local demand and make the sector less sustainable.

The manufacturers, through chairman Mwine Jim Kabeho, also pointed to tariff and non-tariff barriers within the East African Community that they say make regional exports more difficult. Musasizi said the government shares concern about those trade barriers and plans to raise the matter with EAC partner states.

The review highlights a policy balancing act between boosting domestic revenue and avoiding further pressure on an important agricultural and industrial sector. Nile Post reported that the ministry expects to conclude its assessment within two weeks before announcing its position on the proposed duty.