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 said the arrears will be waived as soon as Parliament resumes after recess. The decision follows sustained efforts by Members of Parliament from Greater Bushenyi and other tea-growing areas to address challenges facing the sector.
“The minister directed that, when we resume Parliament, we will write off tax arrears worth more than Shs35 billion. I want to thank MPs from Greater Bushenyi who have worked hard on this issue,” Tayebwa said.
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. She was a pioneering gender advocate in the early development of Uganda’s gender policy framework.
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 said 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 other issues will also be streamlined to ensure that factories are run better,” he said.
Tayebwa also revealed that the government is undertaking a deeper review of the tea sector to support long-term sustainability of the sector.
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 while large volumes of tea continued to enter the market, 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 also been compounded by concerns over tea quality and rising production costs. High fertiliser and input prices have made it harder for farmers to properly 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.
But Tayebwa said government has a bigger plan for the tea sector, which includes a Shs212 billion investment.
The money, he revealed, has been earmarked for investment in the tea industry, but only factories that demonstrate that they are efficiently and effectively managed 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.
“The President has given us two industrial parks. He wrote to me. He has given me five square miles of land for an industrial park in Ruhengyere, which will deal with the processing of foodstuffs. He has also given me five square miles in Nakivale, Isingiro. All these are in writing,” he said.
The announcement marks a significant step towards the fulfilment of Museveni’s promise to establish industrial facilities in the Ankole sub-region.
In addition, he revealed that an industrial hub will also be established in Kyeizoba, Bushenyi District. The district provided 70 acres of land for the project.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
