Published on 06/06/2025
Uganda Human Rights Commission (UHRC) has recommended the imposition of higher taxes on harmful products such as alcohol, cigarettes and sports betting as a strategy to curb their abuse and promote public health and productivity.
The proposal is contained in the State of Human Rights and Freedoms in Uganda in 2024 annual report, which was presented to Parliament on May 15, 2025, by UHRC Chairperson Mariam Wangadya.
According to the report, “Besides the health consequences of alcohol, its consumption limits productivity and discourages saving, thereby undermining the country’s strategy for achieving Vision 2040. More severe and protective tax rates on such potentially harmful and non-essential commodities will deliver a more energetic, healthy and productive citizenry.”
The Commission justified its proposal by invoking the international fiscal social contract, which obligates governments to protect citizens from harmful consumption patterns and unproductive behaviors such as gambling and excessive drinking.
While acknowledging some progress, the Commission noted that existing government efforts — such as increasing taxes on alcohol, cigarettes, and gambling — have been insufficient.
“The UHRC is concerned that gambling or betting deprives families of the resources needed to meet basic necessities and discourages productivity, which is essential for socio-economic transformation,” the report stated. “The current low excise duty on alcohol and cigarettes has not effectively deterred consumption. According to the Uganda Revenue Authority’s 2023/24 annual performance report, beer consumption remains high, with beer generating the highest revenue, indicating its continued affordability.”
The report further pointed out that the increase in tax on casinos from 20% to 30% under the Lotteries and Gaming Amendment Act had failed to reduce the prevalence of sports betting. Alarmingly, 40–57% of Ugandans aged 17 to 35 have engaged in gambling activities.
Tororo Woman MP Sarah Opendi, whose Alcoholic Drinks Control Bill, 2023 was rejected by Parliament in 2024, welcomed the UHRC’s recommendation and called for serious legislative action.
“It is unfortunate that the Executive has previously proposed tax reductions on alcohol, making it more accessible. Parliament has not taken time to seriously debate the impact of these harmful products,” Opendi said.
She emphasized the cost to public health: “Butabika National Mental Referral Hospital is overwhelmed with youth suffering from alcohol and substance-related disorders, and government ends up footing the treatment costs. It’s time we adopted policies to reduce accessibility to these substances.”
Opendi also urged Parliament to address new trends such as the rise of electronic cigarettes, which are not covered under the Tobacco Control Act, 2015. “E-cigarettes are penetrating the market, especially among youth, yet there is no legislation regulating them,” she warned.
Call for Structural Reform
Moses Talibita, Legal Officer with the Uganda National Health Consumers’ Organisation and member of the Tax Justice Alliance Uganda, welcomed the government’s move to tax tobacco products. He, however, advocated for annual tax increases to address inflation and rising health costs.
“After seven years, the government must commit to an annual increment in tobacco taxes. This helps offset the disease burden and ensures our health institutions like the Cancer Institute, Lung Institute, and Heart Institute are adequately funded,” Talibita said.
He criticized the existing tax framework for giving preferential treatment to locally manufactured tobacco products, calling for uniform tax application on both local and imported goods. “The structure should be harmonized. Preferential treatment undermines the impact of taxation on public health outcomes,” he added.
The UHRC’s proposal comes shortly after Parliament approved amendments to the Excise Duty Act, Cap. 336 in May 2025. The changes include revisions to excise duty rates on various goods and the introduction of tax remissions on expired or damaged products.
In April 2025, the Ministry of Finance defended the move to increase excise duty on cigarettes and beer made from local materials, projecting it would generate UGX 19.4 billion. The government cited pressure from health stakeholders to address the public health risks posed by tobacco and alcohol.
Under the revised plan, the duty on beer made from local raw materials would rise from UGX 650 to UGX 900 per litre, reflecting inflation and current economic conditions.
Although the Ministry did not disclose which health entities influenced the proposal, the Health Committee of Parliament had, in its April 2024 report, urged the government to introduce “sin taxes” on harmful products like alcohol and tobacco.
“If tax rates on harmful products are increased by 20%, projected revenue could rise from USD 95.3 million in FY2022/23 to USD 726.5 million by FY2026/27,” said Dr. Charles Ayume, then Chairperson of the Health Committee.
Funding Crisis
The committee’s proposals gained urgency following a funding crisis in the health sector. In late 2024, the United States imposed a ban on foreign aid, leaving Uganda’s Ministry of Health with a budget shortfall of over UGX 604 billion. The HIV/AIDS programme alone faced a deficit of UGX 243.2 billion.
Given this shrinking resource envelope, the committee stressed the need for innovative domestic financing solutions, including increased taxation of harmful products.
Uganda’s Alcohol Burden
World Health Organization statistics highlight the severity of Uganda’s alcohol problem. The country recorded a per capita consumption rate of 12.21 litres in 2023 — nearly double the African average (6.3 litres) and well above the global average (6.18 litres). Around 10% of Ugandan adults are estimated to have an alcohol use disorder, with men disproportionately affected.
What Is a Sin Tax?
A sin tax describes a type of tax levied on a good, service, or activity that is viewed as harmful to people’s health and well-being.
It can also be referred to as a public health tax because governments typically use the revenue generated from the sin tax to pay for costs associated with the treatment of issues that result from the use of a product or activity deemed harmful to people’s health or well-being.
What Is the Purpose of a Sin Tax?
A sin tax is intended to reduce consumer use of a particular product or activity. Public health officials worry about the harmful impact of alcohol, for example, on people’s lives. Too much drinking can lead to a host of physical and mental ailments, such as addiction, liver damage, and impairment. Driving under the influence can lead to vehicular accidents and loss of life. Treatment for illnesses due to alcoholism for millions of Americans can cost billions of dollars annually.
How Is a Sin Tax Levied?
Legislature at the state level typically sets the law, and the state government implements the sin tax. But a sin tax can also be administered at the federal level, and depending on the type of product, sometimes by counties and cities.
A Brief History of Sin Tax
In the U.S., the concept of sin tax traces its roots to 17th-century Massachusetts, which levied an ad valorem tax—tax based on fractional wholesale or retail price—on imported goods such as sugar, wine, liquor, and tobacco. Indirect taxes focused on “sinful” activities such as drinking and smoking, though such duties weren’t severe.
The first American sin tax came in the form of an excise tax known as the whiskey tax in 1791. Its main purpose was to generate much-needed revenue for the new republic after the Revolutionary War, but it faced resistance from farmers who were veterans.
Some proponents had hoped that as a sin tax, it would discourage the drinking of spirits and other distilled alcoholic drinks. The whiskey tax was repealed more than a decade later, and taxes on distilled spirits wouldn’t appear again until the 1860s to finance the costs of fighting during the Civil War.
In 1921, Iowa was the first state to levy a tax on cigarettes to generate revenue. Over the years, tax on tobacco products came to be viewed as a way to discourage tobacco use by the public due to health issues.
By the latter half of the 20th century, other types of sin tax emerged, notably on gambling.In 1921, Iowa was the first state to levy a tax on cigarettes to generate revenue. Over the years, tax on tobacco products came to be viewed as a way to discourage tobacco use by the public due to health issues.
By the latter half of the 20th century, other types of sin tax emerged, notably on gambling.
