KAMPALA, Uganda – Parliament has approved a 30% environmental levy on imported secondhand clothes, commonly known as “mivumba,” while raising the Value Added Tax registration threshold from Shs150 million to Shs300 million as part of a suite of tax bills aimed at boosting government revenue.
The changes came after lawmakers considered five bills Tuesday, including the Value Added Tax (Amendment) Bill, 2026; the Stamp Duty (Amendment) Bill, 2026; the External Trade (Amendment) Bill, 2026; the Tax Procedures Code (Amendment) Bill, 2026; and the Excise Duty (Amendment) Bill, 2026. The session was presided over by Speaker Anita Among.
Presenting the Finance Committee report, Chairperson Amos Kankunda said the VAT threshold adjustment reflects economic changes since the last revision in 2015 and is intended to reduce compliance costs for small and medium enterprises.
“Many small businesses are required to register for VAT, file monthly returns and often hire accountants, which is costly and time-consuming,” Kankunda said. He noted that businesses in the Shs150 million to Shs250 million bracket contribute only about 3% of total VAT collected.
The House rejected a minority proposal by Hon. Karim Masaba, who pushed for a Shs500 million threshold. State Minister for Finance Planning and Economic Development (General Duties) Henry Musasizi warned that a Shs500 million threshold would result in a revenue loss of about Shs6.99 billion.
On secondhand clothing, Kankunda said the 30% levy on mivumba aligns with East African Community goals to phase out such imports and promote the “Buy Uganda, Build Uganda” policy. However, the proposal faced opposition from Hon. Brenda Nabukenya (NUP, Luweero District), who called the tax hike “punitive” and said it disproportionately affects low-income Ugandans who rely on affordable secondhand markets.
In other tax measures:
- Parliament passed a sweeping tax amnesty wiping out all arrears, including penalties and interest, owed as of June 30, 2016, to clean up Uganda Revenue Authority ledger records.
- Excise duty on cement rose from Shs500 to Shs750 per 50-kilogram bag.
- Duty on imported denatured spirits (below 80% alcohol) increased by Shs1,800 per liter, bringing total tax to Shs3,500.
- A new tax of Shs400 per liter on cooking oil and a levy of $1,500 per tonne on plastics were approved.
- Excise duty on cane sugar rose from Shs100 to Shs200, and the first registration fee for motorcycles increased from Shs200,000 to Shs500,000.
- Imported paints, varnishes and lacquers face a 10% excise duty, while locally manufactured equivalents will be taxed at 3%.
Parliament rejected proposed increases in taxes on land and motorcycle transfers but approved new measures on motor vehicle transactions.
