Finance Minister Henry Musasizi- with Some of the Sugar Manufacturers
Uganda’s sugar manufacturers have asked the government to suspend a proposed doubling of excise duty on sugar, warning that the move could hurt domestic consumption, threaten the industry’s sustainability and ultimately reduce tax revenues.
The appeal was made during a meeting with Finance Minister Henry Musasizi, where members of the Uganda Sugar Manufacturers Association (USMA) presented their concerns over the proposal to increase excise duty from Shs100 to Shs200 under the revenue enhancement and compliance measures for the 2026/27 financial year.
In a joint statement signed by USMA Chairman Mwine Jim Kabeho, the manufacturers argued that the proposed tax increase comes at a time when the industry is already under significant pressure.
They said sugar prices have fallen by nearly 30 percent, largely due to a sharp increase in production capacity from 400,000 metric tonnes to 800,000 metric tonnes, which has created downward pressure on prices.
The manufacturers warned that imposing a higher excise duty under the current market conditions would make the situation worse by reducing local demand, straining factory operations and undermining the sector’s long-term viability.
Beyond taxation, the industry also urged government to address persistent tariff and non-tariff barriers within the East African Community, saying the restrictions have made it increasingly difficult for Ugandan sugar producers to access regional export markets despite surplus production.
Responding to the concerns, Musasizi assured the manufacturers that the Ministry of Finance would review the proposed excise duty within the next two weeks before making a final decision.
He said government intends to reach an outcome that balances the need to raise revenue with protecting a sector that plays a significant role in Uganda’s economy.
Musasizi commended sugar manufacturers for their contribution through tax payments and job creation, while also acknowledging frustrations over regional trade barriers.
He pledged that government would fast-track engagements with EAC partner states to address the trade restrictions affecting Uganda’s sugar exports.
However, hours later President Museveni signed two bills into law including the Excise Duty (Amendment) Act, 2026 and the Income Tax (Amendment) Act, 2026.
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