Overview:
Ugandan traders and NETA members warn that the proposed Protection of Sovereignty Bill 2026 could destabilize the economy by restricting foreign funding and criminalizing diaspora remittances.
KAMPALA – Members of the National Entrepreneurs and Traders Association of Uganda have called for an urgent review of the proposed Protection of Sovereignty Bill 2026, warning that the legislation could cripple small businesses and destabilize the economy.
The bill seeks to impose strict regulations on foreign funding and activities deemed a threat to Uganda’s political and economic stability. Under the proposal, individuals or agents are prohibited from receiving more than 400 million shillings in foreign financial support within a 12-month period without written approval from the internal affairs minister.
Violators face severe penalties, including up to 20 years in prison or fines reaching 4 billion shillings for legal entities. Any funds exceeding the limit would be confiscated by the state.
Addressing reporters at the association’s Kampala offices, NETA Uganda Chairman Thadeus Musoke said the group has formally petitioned Parliament and the president. He urged the government to consult with business associations before implementing sweeping policy changes.
“We are not opposed to reform,” Musoke said. “But reform must be consultative, structured and mindful of the millions of Ugandans whose survival depends on small businesses.”
Musoke expressed concern that the bill could inadvertently criminalize remittances by classifying Ugandans in the diaspora as foreigners. He noted that remittances provide more than $1.4 billion annually, serving as vital seed capital for small enterprises.
Catherine Rujumba, the association’s leader for women’s affairs, said women entrepreneurs who operate on thin margins would be disproportionately affected. She warned that policies disrupting access to capital could push many women out of business.
The outcry comes amid broader private sector unease regarding proposed tax increments for the 2026-27 financial year. Muwasi Muhumuza, the NETA Uganda spokesperson, described proposed tax hikes on fuel, cement and sugar as “ill-timed and counterproductive.”
While Parliament recently made slight reductions to proposed levies—lowering a 50-kilogram bag of cement tax from 1,000 to 750 shillings and sugar from 300 to 200 shillings per kilogram—traders argue the pressure remains too high. Muhumuza pointed to proposals to raise fuel levies from 1,550 to 1,750 shillings per liter as a move that would spike production and transport costs.
Civil society groups have joined the opposition. Julius Mukunda, executive director of the Civil Society Budget Advocacy Group, warned the bill could result in the loss of billions in external financing.
NETA Uganda is now calling for an economic stability summit involving the private sector and financial institutions to address these legislative challenges.