The Ugandan government has put forward a proposal to increase taxes on cigarettes and beers produced from local raw materials.
This aims to generate an additional Shs19.40 billion in revenue.
The move announced today, is part of a broader strategy to address public health concerns and adjust for inflation, responding to mounting pressure from health sector to curb tobacco use and its associated risks.
Finance State Minister Henry Musasizi unveiled the plan during a presentation before Parliament’s Finance Committee, where he introduced seven Tax Bills designed to bolster the country’s fiscal framework. Among the key proposals is a significant hike in the excise duty on beer made from local raw materials, which will rise from Shs650 to Shs900 per unit.
This adjustment, Musasizi explained, reflects current economic conditions and aims to keep pace with inflation while contributing to the national treasury.
“The modest increase in excise duty on cigarettes and beer is not just about revenue generation,” Musasizi told the committee.
“It also serves a critical public health objective by discouraging tobacco consumption, which imposes significant health costs on our economy, and aligns with inflationary trends.” He added.
Health sector players have long argued that higher tobacco taxes could reduce smoking rates in Uganda, where tobacco-related illnesses continue to strain the healthcare system. According to recent estimates, over 10,000 deaths annually are linked to tobacco use, with associated cost.