Ugandan parliament increases excise duty on cigarettes

Ugandan parliament increases excise duty on cigarettes
The amendments will see 1000 sticks of soft cup cigarettes go from Shillings 50,000 to 55,000 for locally manufactured cigarettes and Shillings 75,000 per 1000 sticks for imported cigarettes. Courtesy Photo.

Parliament has passed the Excise duty amendment bill 2017 with amendments. The bill sought to amend the Excise Duty Act 2014, act 11 to revise duties on sugar, confectioneries and locally manufactured furniture and other related matters.

The amendment will see a reduction in the excise duty on Beer whose local raw material content, excluding water is at least 75 per cent by weight of its constituent from Shillings 700 per liter to Shillings 650.

The amendments will see 1000 sticks of soft cup cigarettes go from Shillings 50,000 to 55,000 for locally manufactured cigarettes and Shillings 75,000 per 1000 sticks for imported cigarettes.

Locally manufactured Hinglid cigarettes will now cost Shillings 80,000 per 1000 sticks and Shillings 100,000 per 1000 sticks for imported hinglid cigarettes. The changes don’t affect nonalcoholic beverages.

The finance committee had proposed a reduction of the excise duty on the nonalcoholic drinks from 13 per cent to 10 per cent or from Shillings 240 to Shillings 157 but this didn’t go through.

Nandala Mafabi, the Budadiri West MP, says Uganda’s excise duty is the highest in region as Kenya’s stands at 7 per cent and Tanzania is at 5 percent, which affects Uganda’s competitive advantage.

However, the State Minister for Planning, David Bahati opposed the reduction, saying it would cost government Shillings 32 billion. He asked the house to give government more time to study the issue. Parliament also maintained the 10 percent excise duty on Sugar, Confectioneries, chewing gum, sweets and chocolates.

It came after the Health Minister; Ruth Aceng argued that sweets are causing Ugandans to lose a lot of money on treating their teeth and obesity. She said more taxes should be added on sweets.

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