Casinos, plastics makers in limbo as Museveni blocks tax bills

Uganda’s gaming and plastics industries face weeks of tax uncertainty after President Yoweri Museveni declined to assent to two revenue bills underpinning the 2026/27 budget, sending them back to Parliament just as the new financial year gets underway.

Deputy Speaker Thomas Tayebwa told MPs on Tuesday that the President had returned the Income Tax (Amendment) Bill, 2026 and the Excise Duty (Amendment) Bill, 2026, both passed in April by the previous Parliament, leaving businesses in the affected sectors unable to plan around final tax rates for the year.

For the gaming industry, the stakes centre on Clause 11 of the Income Tax Bill, in which Parliament exempted winnings paid out by land-based casinos from a new 15 per cent withholding tax on betting and gaming winnings. The exemption was a hard-won concession for casino operators: Uganda Gaming Operators Association chairman Bob Kabonero had told Parliament’s Finance Committee in April that real-time withholding on casino floor winnings would be impractical to administer and could end up undermining, rather than boosting, revenue collection.

Museveni rejected the carve-out, arguing it creates opportunities for tax avoidance and revenue leakage, and that land-based casinos and online gaming operators run substantially similar businesses and should face identical tax treatment. If Parliament yields to the President’s position, casinos will have to build withholding systems for player payouts — a compliance cost operators say the sector is not equipped to absorb.

Plastics manufacturers, by contrast, have won a reprieve. The President objected to Parliament’s tenfold increase in excise duty on single-use plastics — from 2.5 per cent or US$70 per tonne to 25 per cent or US$1,500 per tonne, whichever is higher — warning that the hike would impose significant cost pressures on manufacturers and users of plastic packaging at a time when Uganda lacks readily available alternatives. He said the measure needs further study before it can work as environmental policy, effectively siding with industry concerns that the increase would ripple through packaging costs into consumer prices across fast-moving goods, agriculture and beverages.

The delay carries fiscal risk. The two bills form part of the tax package meant to finance the Shs84.4 trillion budget framework for 2026/27, which projects economic growth of 10.2 per cent on the back of oil production and infrastructure spending. With the financial year already running, every week the bills spend in the Finance Committee — which has now been tasked with reworking them — is a week the Uganda Revenue Authority operates without clarity on a slice of its collection targets.

The episode also highlights a recurring tension in Uganda’s fiscal policymaking: the balance between aggressive domestic revenue mobilisation and the investment climate. Museveni’s reservations leaned heavily on protecting production, investment and employment — language that will reassure manufacturers but frustrate environmental advocates who backed the plastics levy, and revenue officials counting on the gaming tax to widen the net.

A procedural challenge by Bbale County MP Charles Tebandeke, questioning whether bills passed by the previous Parliament could be reconsidered by the current House, was dismissed by Tayebwa, who ruled the President had acted within the 30-day window under Article 91 of the Constitution.

The bills now return to the Finance Committee, with businesses in both sectors watching for the reworked rates.