Tobacco manufacturers have rejected the government’s proposed excise tax increase, warning that the move could lead to significant financial losses for both the industry and national revenue.
Appearing before Parliament’s Finance Committee on April 22, 2025, officials from Leaf Tobacco Company, led by David Kamukama, Director of Corporate Affairs, opposed the proposal to raise excise duty by UGX 10,000 on every 1,000 sticks of cigarettes.
“We urge the government to differentiate between local manufacturers and companies importing cigarettes into Uganda,” Kamukama said.
’’We also recommend a stronger anti-illicit trade policy and more aggressive enforcement measures to safeguard local manufacturers. The products we produce for the Ugandan market are distinctly different from those made for Kenya, Rwanda, the DRC, and other neighboring countries,” he added.
Kamukama warned that the proposed tax increase will push up retail prices, reduce consumption, and ultimately lower both company sales and government tax revenue.
He also cited alarming statistics indicating that illicit cigarettes now account for 34% of the total market share in Uganda, posing not only economic threats but also serious public health concerns, including increased cancer cases and other harmful consequences.
During the session, committee members including Karim Masaba (Mbale Industrial Division) and Dickson Collins Kateshumbwa (Sheema Municipality) weighed in on the issue.
Masaba noted that while tobacco products are available on the Ugandan market, research and intelligence suggest that many of these are not intended for local consumption but are instead smuggled into the country, often through duty-free channels.
In a shared call to action, government representatives and cigarette manufacturers, led by Kateshumbwa, emphasized the need for a collaborative strategy that integrates technological innovations, strengthened regulatory enforcement, and targeted tax reforms.
This strategy aims to curb the illicit cigarette trade, safeguard government revenue, and protect consumers from dangerous counterfeit products.
