Sugar manufacturers protest proposed excise duty increase, meet finance minister
According to the manufacturers, sugar prices have declined by nearly 30 percent, largely because Uganda’s sugar production capacity has increased substantially, from about 400,000 metric tonnes to 800,000 metric tonnes.
Uganda’s sugar manufacturers in a meeting with the finance minister Henry Musasizi. (Credit: Henry Musasizi/X)
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Uganda’s sugar manufacturers have protested the proposed increase in excise duty on sugar from sh100 to sh200, arguing that the measure is not sustainable and could undermine domestic consumption.
Meeting the finance minister Henry Musasizi on Friday, August 21, the manufacturers, in a joint statement signed by their chairman Mwine Jim Kabeho, noted that the proposed increase has come at a difficult time when the industry is already facing falling sugar prices and increasing production.
According to the manufacturers, sugar prices have declined by nearly 30 percent, largely because Uganda’s sugar production capacity has increased substantially, from about 400,000 metric tonnes to 800,000 metric tonnes.
The Manufacturers said that, as a result, the increased production has created downward pressure on prices as the domestic market struggles to absorb the growing volumes.
“Hon, Minister, imposing an additional tax burden under these circumstances could further weaken demand and place pressure on the sustainability of sugar manufacturing businesses,” reads the statement distributed on Friday.
During the meeting, at the Ministry of Finance headquarters in Kampala, the manufacturers also expressed concern about the limited export opportunities available to them, particularly within the East African Community, where they said tariff and non-tariff barriers continue to make it difficult for Ugandan sugar producers to access regional markets
They argued that the inability to freely export surplus production has contributed to the pressure on domestic prices, making it difficult for manufacturers to maintain profitability while continuing to invest, employ workers and pay taxes.
The group proposed an increase in excise duty as part of government’s efforts to raise additional domestic revenue in the 2026/27 financial year.
However, the manufacturers told Musasizi that increasing the tax from sh100 to sh200 would not necessarily translate into higher government revenue if it leads to reduced consumption, declining production or increased pressure on businesses.
They maintained that a sustainable tax regime should take into account the prevailing market conditions and the ability of consumers and manufacturers to absorb additional costs.
“The Ministry of Finance would study the manufacturers’ concerns, particularly those relating to the proposed increase in excise duty, within the next two weeks,” he said.
The review, according to Musasizi, would seek to establish a position that is favourable to both government and the sugar manufacturers.
The Minister thanked sugar manufacturers for their contribution to Uganda’s economy, particularly through payment of taxes, investment and employment creation.
He also acknowledged that the sugar sector remains an important contributor to economic activity and government revenue and said the concerns raised by manufacturers would therefore be considered carefully.
Musasizi, who expressed dissatisfaction with the tariff and non-tariff barriers faced by Ugandan sugar producers in the East African Community, also said that the issue requires urgent intervention to ensure that local manufacturers can access regional markets.
The government, he pledged, would fast-track discussions with EAC partner states to address the barriers and improve market access for Ugandan sugar.