Uganda’s Parliament approves new taxes on fuel, mineral water and adhesive

Parliament has passed into law the Excise Duty Amendment Bill, 2024, increasing the levy on fuel to Shs1,550 per litre, imposing Shs500 per 50 kg of lime, adhesive and grout, and also imposed a fixed rate of Shs50 per litre of mineral water.

MPs, however, rejected the proposal by Government to impose a Shs300 levy on every litre of kerosene, citing the failure by Government to extend electricity across the country, thus condemning the poor people to only use kerosene for lighting and any charge on kerosene would impact on their incomes.

And although MPs adopted the proposal to impose a 0.5% levy on cash withdraws on payment systems, they voted to have agency banking excluded from this category, in order to boost efforts of financial inclusion. The charge will now be imposed on new payment platforms like Chippa cash, Wave etc.

Speaker Anitah Among defended the exclusion of levy on kerosene.

“When you look at fuel, the increase is Shs100, but when you look at kerosene where there are so many people using, you are increasing it by Shs300. What mathematics was that? What was the basis of that increment? Since we removed Rural Electrification Agency, electricity has failed to reach the villages, we are removing kerosene, it affects the local person, who can’t afford to fuel a car,” she said.

Bosco Okiror (Usuk County) backed the proposal to increase levy on fuel to Shs1,550 per litre on condition that the money is ring-fenced for the construction and maintenance of roads across the country saying, “The impact that our voters want to feel is that we should be able to ringfence and put this in our infrastructure. I would suggest the increment of this tax, but let it go towards having the deliverable. Let Ugandans feels that the tax has been increased but it is addressing the issue of their roads.”

Nathan Nandala Mafabi (Budadiri West) proposed to have the levy on fuel increased by Shs10 instead of Shs100, wondering the formula Government used to arrive at having this levy increased by Shs100 whenever there is a proposal, and later settled proposed to have the rate pushed to Shs50.

“It isn’t necessary that every now and then, we should raise taxes so that we generate more, you can spur the economy and have more taxes. Even if you talk about the villager not coming to town, but the sugar they are going to drink is going to be transported, therefore, you will pay the Shs100 which is being added on fuel. I want to plead with Government, for the first time say we aren’t increasing taxes on fuel and see what will happen. I can tell you, the country will not collapse and there will be more income to tax,” he said.

But all his proposals were rejected.