From Boda Bodas to Alcohol: New Taxes Set to Shake Household Budgets

The Government has introduced a series of new and revised taxes on selected commodities in the Financial Year 2026/27 budget, targeting revenue enhancement and regulation of consumption patterns across key sectors.

According to the budget proposals, several everyday products including alcohol, sugar, cement, cooking oil, motorcycles, and plastics will be affected by the new tax measures.

Alcoholic beverages are among the most heavily impacted, with excise duty significantly increased from Shs 1,700 to Shs 3,500 per litre. The adjustment affects a range of spirits, including Uganda Waragi, whisky brands such as Black Label, cognac, and liqueurs like Amarula.

Motorcycle owners will also face higher costs, with the tax on first registration increased from Shs 200,000 to Shs 500,000, a move expected to impact boda boda operators and transport costs.

Environmental concerns have also influenced the tax policy, with the levy on single-use plastics sharply increased from 2.5 percent or USD 70 per tonne to 25 percent or USD 1,500 per tonne, in a bid to discourage plastic waste.

Key household commodities have not been spared. The excise duty on cooking oil has doubled from Shs 200 to Shs 400 per litre, while sugar has increased from Shs 100 to Shs 200 per kilogram. Cement prices may also rise following an increase in excise duty from Shs 500 to Shs 750 per 50-kilogram bag.

In addition, locally manufactured and imported paints and varnishes will now attract new excise duties. Local products will be taxed at 3 percent or Shs 50 per litre or kilogram, while imported products will attract 10 percent or Shs 2,000 per litre.

The budget further introduces stricter environmental taxation, including an increase in the levy on imported used clothing from 15 percent to 30 percent. The betting and gaming sector will also see higher taxation, with the tax rate rising from 20 percent to 30 percent.

Government says the measures are part of efforts to broaden the tax base, increase domestic revenue mobilisation, and support implementation of the country’s development agenda under the Tenfold Growth Strategy.