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TAXING HARMFUL PRODUCTS: Parliament Proposes 20 Percent Tax Levy On Harmful Products Like Alcohol & Tobacco; Ring-Fence Social Media Tax To Benefit Health Sector

The Parliament’s Health Committee wants taxes for harmful products like alcohol & tobacco increased by 20% in order to bridge the gap left by donors who have indicated plans to reduce funding to Uganda’s health sector.

The MPs argue that if the tax rate on harmful products is increased by 20%, Uganda's revenue could increase from US$95.3M (Shs362.412Bn) in FY2022/23 to US$726.49 (Shs2.762Trn) in FY2026/27.

Social media tax

The Committee also urged the government to consider ring-fencing social media tax for upgrading of Health Centres & for community health financing as the community health strategy launched remains largely unfunded.

“Over the years, Health Development Partners have supported the Health Care system, especially in the areas of immunization, HIV/AIDS, TB, Malaria control, and Infrastructure development,” noted Charles Ayume, Chairperson Health Committee.

He was presenting the report on the 2024/25 ministerial policy statement for the health sector.

He added: “However, the Committee is concerned about the shrinking resource envelope due to global factors and a shift of priorities. In light of the constrictive fiscal space, the committee observes that the government should consider some innovative domestic financing mechanisms to generate some additional revenue for the health sector.”