Cigarette Taxes: A Hanging Fruit to Expand Uganda’s Revenues

Uganda is implementing a mixed structure (with ad valorem and specific tax rates) whichever higher is considered across different brands. A report by PwC (2025) indicates that imported brands are taxed highly at about 60% while locally manufactured brands are taxed at low rates. However, for many years the rates have been constant especially on imported brand. Further, a mixed taxation structure is regarded complex and always characterised with many loopholes (IMF, 2016). Further, Uganda’s tax share as a percentage of retail prices on tobacco is still below the recommended rate of 70-75%, but oscillating up to 31% (EPRC, 2018).