By Tom Oniro Elenyu
From the garden to the kitchen and then to the table, a typical African woman in Uganda’s rural setting has been highly credited for fighting inflation through ‘osmosis’. She wakes up in the wee morning hours to till the soil, returns home with fresh vegetables—some of which grow naturally—from her garden, cooks it using free firewood from her land and seasons it with groundnut or simsim paste extracted from her soil toil. She relies on water from the available open wells, protected spring wells or boreholes.
But her osmotic fight against the animal called inflation will definitely be overturned by the ruthless indirect taxes which stare at her suspiciously like an armed security guard on duty; invoking purchasing power on her: Her food needs the basic necessity of salt. Besides salt, she compulsorily needs soap. Again, she will at one time badly need to fuel herself to hospital, children to school and also buy clothes. Whenever and wherever possible, she will be required to buy building materials to house her family.
Now with 52% incidence of the taxes in the approximately $23 billion-heavy 2026/2027 fiscal-year budget expected to be borne by citizens, it would seem citizenship is now a tax disadvantage. In the budget proposal, government maintains that it is mobilising revenue domestically so as to minimise over-reliance on external borrowing. Government proposes an ambitious revenue-generation measures aimed at raising an extra over US$1.1billion in the FY2026/27 period through new tax policy measures and strengthened compliance and enforcement.
Uganda’s new fiscal calendar-year takes effect every 1 July; although some traders have allegedly started promptly resting the incidence of the new taxes on consumers.
“In Uganda, women generally spend a higher share of their income on such essential goods as they are mostly responsible for care-giving. This tax is likely to heavily affect women’s income and/or investment capital in small business sectors like bakeries, confectioneries and juice-making, as this tax will directly be borne by them,” Tax, Trade and Digitalisation Coordinator for Africa and Arab Countries at Public Services International (PSI), Faith Lumonya, tells Pan African Visions exclusively on 16 April.
PSI is a Global Union Federation of more than 700 trade unions representing 30 million workers in 154 countries. It brings their voices to the UN, ILO, WHO and other regional and global organisations. PSI defends trade union and workers’ rights and fight for universal access to quality public services.
“In addition,” regrets Lumonya, “the proposal to increase excise duty on petrol and diesel by UGX 200 (about US$0.1) per litre will directly increase transport, food prices, and the general cost of living.
“Moreover, Uganda’s high out of pocket expense on health also already disproportionately affects women. Women of child-bearing age, who are the majority in the country, require maternal care; inevitably requiring them to visit health care centres more than their male counterparts.”
In a late March post-meeting statement endorsing the new taxes, the ruling National Resistance Movement Caucus said, thus; “We agreed to prioritise peace and security, roads, electricity, railway [infrastructure], scientific innovation, preparations for AFCON 2027… and salary enhancement for teachers…and security personnel.” Uganda is slated to play host to the Africa Cup of Nations, 2027; sometimes referred to as AFCON 2027 or CAN2027. The 36th edition of the CAF-organised African football biennial tournament is set for between 19 June and 18 July 2027. The AFCON tournament is to be co-hosted by the three original East African Community Partner States in Uganda, Kenya and Tanzania—the first of its kind to be hosted by three countries.
Every year, according to Lumonya, Uganda’s Government proposes tax Bills and even sometimes goes ahead to pass tax laws that are framed as “gender-neutral” yet evidence shows that taxation affects women and men differently due to unequal income levels, unequal distribution of unpaid care roles and responsibilities across society, differences in employment patterns, and unequal asset ownership and access to productive resources.
She explains that in Uganda, women dominate the informal sector and micro-enterprises, and significantly struggle to transition into better-paying, formal jobs. “They are also the majority who fall under the poverty line. Their roles as care-givers,” says Lumonya, “both within the paid and unpaid care sector, and given the fact that they are generally poor and thus spend a significant proportion of their income on consumption effectively incur a disproportionately higher tax incident than their male counterparts.
“The proposed excise duty to be increased on sugar and cooking oil, as well as on ALL cash withdraws is already a regressive tax, just like the proposed tax increase on fuel, targeting low-income earners who spend most of their income on consumption.”
According to the 2024 statutory Uganda Bureau of Statistics (UBoS) Multidimensional Poverty Index (MPI) report released in late March, female-headed households in Uganda face a higher incidence of multidimensional poverty at 28.9% compared to male-headed households standing at 26.2%. These households, UBoS reports, experience simultaneous deprivations in health, education, and living standards, with rural areas experiencing higher poverty rates.
In an exclusive interview with this publication, constitutional lawyer and Executive Director of Uganda and Horn of Africa’s constitutional watchdog—Center for Constitutional Governance—Dr Sarah Bireete agrees that the essence of paying tax is premised on social, legal and moral foundations of how a state functions. “Taxes are the price citizens collectively pay to enable the government provide them public services like security, roads, water, healthcare, education,” she tells Pan African Visions: “It’s a collective contribution for a collective benefit. When public services are not provided, then paying taxes becomes a burden to citizens.”
In a 14 April press statement made available to this publication, Forum for Women in Democracy (FOWODE)’s Executive Director, Patricia Munabi Babiiha says feminist tax advocates have argued severally that taxes on consumption tend to be regressive, hitting women harder because they spend a higher share of their income on essential goods, and how this aligns with observations that under inequitable tax structures “the one with less ends up paying disproportionately more”.
FOWODE is a non-partisan feminist organisation established in 1995 with the vision “a just and fair society where, in all spheres, public and private, women and men in their diversities share equally in decision-making”. FOWODE has continued to be a pace-setter in promoting gender equality and women’s leadership in the country.
Women, according to FOWODE, who comprise 51% of Uganda’s population, are predominantly represented in informal and micro-enterprises, cross-border trade, unpaid care and household provisioning roles, and lower-income consumption groups. As a result, the statement adds, tax reforms can unintentionally widen gender inequalities unless explicitly assessed through a gender lens.
FOWODE and the broader women’s movement in Uganda generally recognise the significance of tax policy as a foundational tool for economic development, serving to mobilise domestic resources, foster investment, and reallocate wealth. FOWODE has been at the forefront of advocating for gender-responsive budgeting since 1998, “we strongly believe that sustainable development will only be achieved if policies including taxation/revenue generation are structured to redress the persistent gender imbalances that have for long left women and girls on the periphery of development processes, without undermining the overall country’s development,” Munabi’s statement reads, in part.
“We are concerned that the rise in fuel prices could entrench poverty among women who comprise 94% of the informal sector and female-headed households which are estimated at 26% in Uganda. Majority of these are low-income earners, who are already constrained by the high transport costs in addition to the cost of daily subsistence supplies given their domestic care roles,” it adds.
The Hue and Cry Over Tax Exemptions
Meanwhile, the clamour for government to review its generous tax holidays, continues; including from the Bretton Woods Institutions—IMF and World Bank.
As a citizen of Uganda, Lumonya says she can only describe “our situation or relationship with our government as one in which the social contract has been broken. The government urgently need to explore people-centred approaches to taxation that aim to rebuild the social contract between the State and its citizen. The Uganda government must recall that it was because of the broken social contract that the Arab spring broke out”.
The Arab Spring of February 2011 started in Tunisia when a jobless university graduate—vending green vegetables to earn a living amidst high cost of living and corruption in the Ben Ali government having shot over the roof—was angered by police who were asking him for a bribe and chasing him from vending in the streets. The jittered graduate’s self-immolation was the ignition of protests that would spread to Egypt, Libya and Yemen; toppling ‘stayist’ presidents in those countries.
According to Lumonya, government needs to devise ways of targeting the “big fish”—the wealthy and corporations.
“Yet, the amount proposed to be foregone as a result of the extension of the Bujagali Hydro-Power project tax holiday for 6 to 7 years could potentially cover Uganda’s current maternal health financing gap,” Lumonya argues; adding: “The income tax exemption will see an increase in foregone income from UGX.99.06 billion (about US$28 million) to UGX.115 billion (nearly US$32 million) annually—approximately twice Uganda’s annual budget for maternal health supplies yet Uganda is still faced with poor maternal health indicators including a high maternal mortality rate at 189 per 100,000 live births and yet basic lifesaving drugs like oxytocin are often unavailable due to financing challenges.”
In the case of the proposed tax exemption for Bujagali, she expounds, what the government is proposing effectively transfers Uganda’s taxing rights to the State from which the largest shareholder of Bujagali resides or is head-quartered as long as that country has implemented the Inclusive Framework Globe rules.
IMF’s former Director of the African Department Abebe Aemro Selassie, in an interview with the local weeky, The Observer in March acknowledges that the best way to boost the resource envelope is by increasing tax collections, but “Government needs to reduce exemptions which cost it a lot of money—in our estimates, about 3 per cent of GDP a year.”
In October 2025, the World Bank reported that Uganda’s generous tax exemptions and a weak enforcement of income tax on the wealthy in the country erodes the national revenue base and making government to largely depend on taxes that break ordinary consumers. The World Bank’s report singles out high-net-worth individuals and big firms as the biggest contributors to Uganda’s revenue leakage. Many wealthy individuals, too, under-report earnings or shift income to avoid taxes, while Multi-National Corporations benefit from a patchwork of exemptions, including a 10-year corporate income tax (CIT) holidays, intended to attract investment but often abused.
Despite the opportunity cost of the Bujagali tax holiday, Lumonya explains, evidence from the Auditor-General’s reports indicates that it has not had any positive effect in terms of reduction in the electricity power tariff. The Bujagali Hydropower Project has already benefited from a 15-year tax holiday, which has since been repeatedly proposed to be extended through annual or short-term extensions.
“This is why Uganda must also consider including in its law a framework for implementation of a domestic top up tax to guarantee that it is able to secure its taxing rights and thus be able to tax multinational corporations like Bujagali more. In fact, corporations should, just like labour pay an effective tax rate of 25%.
“Across Africa,” says Lumonya, “many MNCs pay an effective tax rate of only 6-8%. Uganda’s argument that the extension of the tax exemption is part of its concession agreement is merely a political one and should not be used as a basis to inform its decision to offer this extension.”
According to FOWODE’s Munabi, the current proposal to extend Bujagali’s Income Tax Exemption for 6 to 7 years (30th
June 2026 to 30th June 2032) will see an increase in foregone income from UGX.99.06 (US$28 million) to UGX.115 billion (US$32 million) annually—approximately twice Uganda’s annual budget for maternal health supplies; concurring with Lumonya.
Recommendations
A February 2024 United Nations University World Institute for Development Economics Research findings say half of the firms claiming tax holidays would remain highly profitable, even if taxed at the standard CIT of 30%. The cost of the five-studied tax incentives is as high as $42 million annually; nearly one-fifth of Uganda’s annual CIT receipts, according to the findings. The World Bank Report recommends the scrapping of tax exemptions, or else the tax base is eroded.
FOWODE: “…we encourage the government to undertake a gendered cost-benefit analysis on the effects of high taxation on fuel.
“As feminist organisations, we decline the extension of the Income Tax Exemption for Bujagali Hydro Power Project based on the fact that the exemption over the years has yielded marginal benefit realised to the intended beneficiaries/electricity power consumers in Uganda.”
Given that Uganda faces a maternal health funding gap of approximately $312.8 million and is struggling with withdrawal of major donor budget support, “we propose that the income generated from cancellation of the Income Tax Exemption for Bujagali Hydro-Power, be channelled to address this major financing gap in women’s Health,” FOWODE recommends.
Well, the cry of women is the cry of children. And the tears of children are the cry of men, too.
