Uganda: The Government is set to write off more than Shs35 billion in tax arrears owed by tea factories as part of a wider intervention aimed at reviving Uganda's struggling tea industry, the Deputy Speaker of Parliament, Thomas Tayebwa, has said. He mentioned that the arrears will be waived as soon as Parliament resumes after recess. This decision follows sustained efforts by Members of Parliament from Greater Bushenyi and other tea-growing areas to address challenges facing the sector.
According to African Press Organization, Tayebwa announced the development on Tuesday, 08 September 2026, while representing President Yoweri Museveni at the burial of the late Edna Kentaro Baryaruha in Bushenyi District. The planned tax relief is expected to ease the financial burden on tea factories, some of which have struggled with accumulated debts and other operational challenges amid a prolonged crisis in the sector.
Tayebwa stated that the government was also working to streamline other issues affecting the management and operations of tea factories. He noted that accumulated tax obligations had become a major obstacle hindering the resumption of operations at some factories.
The announcement comes amid growing concern over the future of Uganda's tea industry. Tea prices fell sharply in the past year as international demand weakened, creating an oversupply that pushed auction prices down. Political and economic disruptions in key importing countries, including Sudan, further reduced demand for East African tea. Uganda, which relies heavily on the Mombasa auction and mainly produces CTC black tea, was particularly exposed to these market shocks.
The price slump has been compounded by concerns over tea quality and rising production costs. High fertiliser and input prices have made it harder for farmers to maintain their plantations, affecting the quality and quantity of green leaf supplied to factories. When factories earn less from exports, their ability to pay farmers and meet operating costs is squeezed, creating a cycle of low farmer payments, declining investment in tea gardens and financial distress among processors.
Tayebwa revealed that the government has a larger plan for the tea sector, which includes a Shs212 billion investment. The funds are earmarked for investment in the tea industry, but only factories that demonstrate efficient and effective management will qualify for the funds.
In a related development, the Deputy Speaker also revealed that the President has allocated land for the establishment of two industrial parks in Ruhengyere and Nakivale in the Ankole sub-region, saying the projects could create thousands of jobs and spur economic development. Additionally, an industrial hub will be established in Kyeizoba, Bushenyi District, with the district providing 70 acres of land for the project.