Museveni wins as MPs retain lower plastics tax

KAMPALA. Parliament has adopted President Museveni’s proposals to retain a lower excise duty on single-use plastics and remove a tax exemption for winnings from land-based casinos after reconsidering two tax amendment Bills returned by the Head of State.

The House on Tuesday approved the President’s recommendations on the Excise Duty (Amendment) Bill, 2026, maintaining the tax on single-use plastics at 2.5 per cent or US$70 per tonne, whichever is higher, instead of the 25 per cent or US$1,500 per tonne rate that Parliament had previously passed.

Lawmakers also adopted the President’s proposals in the Income Tax (Amendment) Bill, 2026, ensuring that winnings from land-based casinos remain subject to withholding tax while retaining the exemption for winnings under the national lottery.

Presenting the report of the Committee on Finance, Planning and Economic Development, committee member James Kakooza said MPs agreed that increasing the excise duty on single-use plastics should be deferred until government completes a comprehensive assessment of its impact on the plastics industry.

“The committee agrees with the President that the increase in excise duty should be stayed until a thorough study is undertaken to ascertain its impact on the industry,” Kakooza said.

The committee also supported widening the scope of the tax to cover more single-use plastic products while maintaining exemptions for multiple-use plastics, sanitary pad packaging, vacuum food packaging and pharmaceutical products.

It further recommended that the Ministry of Finance undertake a comprehensive study on plastic taxation and report its findings to Parliament within six months.

However, Nyendo-Mukungwe Division MP Gyaviira Lubowa opposed reconsideration of the Bills, arguing that the 12th Parliament lacked the legal mandate to revisit legislation passed by the dissolved 11th Parliament.

“It is irregular to consider Bills that were already passed by the 11th Parliament before it was dissolved,” Lubowa said.

Lubowa also criticised the government’s changing position on plastic taxation, saying it had failed to undertake sufficient studies before revising the proposed tax. He argued that retaining the lower rate would deny government an estimated Shs208 billion in revenue.

In a minority report, Industrial Division MP Karim Masaba supported the President’s proposal to retain the lower tax rate but opposed expanding the list of exempted plastic products.

Masaba argued that while the proposed rate was reasonable, broadening exemptions for multiple-use plastics and pharmaceutical packaging would slash expected revenue from Shs208 billion to about Shs3 billion, resulting in a loss of approximately Shs205 billion.

Finance Minister Henry Musasizi dismissed the estimates, saying the projected revenue loss would be about Shs7 billion.

“The President’s proposal is in the right direction. Government policy evolves as new information becomes available,” Musasizi said.

Kassanda County North MP Patrick Nsamba questioned the policy shift, arguing that government could not justify evicting people from wetlands in the name of environmental protection while appearing to soften its stance on plastic pollution.

Despite the objections, Parliament endorsed the President’s recommendations.

In a separate decision, lawmakers approved changes to the Income Tax (Amendment) Bill, 2026, removing the withholding tax exemption for winnings from land-based casinos while preserving the exemption for national lottery winnings.

Finance Committee chairperson Maximus Ochai said exempting casinos would create opportunities for tax avoidance by treating similar betting activities differently.

“The exemption granted to land-based casinos would create unnecessary opportunities for tax avoidance and revenue leakage because it establishes different tax treatment for substantially similar gaming activities,” Ochai said.

He said removing the exemption would safeguard an estimated Shs65 billion in projected government revenue while ensuring equal tax treatment across the betting and gaming sector.

With the adoption of the President’s recommendations, winnings from land-based casinos will remain subject to withholding tax, while the lower excise duty on single-use plastics remains in force pending a government review of its impact on the industry.