Parliament Discards Excise Duty on Sugar Confectioneries

Parliament has removed the 20 percent excise duty on sugar confectioneries imposed under the Excise Duty (Amendment) Bill, 2022.

Sugar confectioneries include; gums, chocolates and sweets among others.

On Tuesday, Speaker, Anita Among and MPs agreed during plenary and scrapped the tax that had been re-introduced by parliament on May 18th, 2022, to take effect this financial year 2022/2023.

This development came after the Attorney General, Kiryowa Kiwanuka told parliament the President Museveni’s position was clear on the tax removal. It also followed a report tabled by the Kiboga East MP, Keefa Kiwanuka agreeing with reasons for the objection.

President Yoweri Museveni rejected the new clause in the bill that provides for an excise duty of 20 percent on sugar confectionaries. In his July 5th, 2022 letter, the president, questioned the re-introduction and returned it to Parliament for reconsideration.

He explained that it goes against government’s decision not to increase taxes this financial year for speedy economic recovery, in addition to encouraging local manufactures.

“Excise Duty on sugar confectionaries was first introduced in the financial year 2014/2015 at 10 percent and was later increased to 20 percent in 2018/2019. However, the government removed it in the financial year 2019/2020 following complaints from manufacturers that their products were being outcompeted by cheaper smuggled imports,” Museveni noted in his letter.

Parliament however approved the president’s proposal to impose a 40 percent or Shillings 4000 excise duty on each kilogram of polymer bags and sacks and other plastics.

In his letter, Museveni said that the only exception in the government proposal was packaging bags for food, juices, tea, and coffee and bags for direct use in the manufacture of sanitary pads.

“Government’s objectives were to streamline the provisions for taxation of plastic products as provided for in the Excise Duty (Amendment) Act, 2021 with the view to ensuring that the targeting of excise duty is refocused away from sensitive sectors that utilize elements of plastics.” Museveni further stated

Attorney General, Kiryowa Kiwanuka told parliament that the President’s position on plastics was clear it was approved by MPs.