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Finance Committee asks government to suspend new tax measures

FILE PHOTO: Finance Minister Matia Kasaija

Kampala, Uganda | THE INDEPENDENT | The Ministry of Finance has been tasked to consider suspending all new tax measures for the coming financial year 2020/2021 to help Ugandans cope with the effects of coronavirus pandemic.

The request was made by the Finance Committee of Parliament during an interface with Minister Matia Kasaija. The minister appeared before the committee to present and defend the new tax measures for the financial year 2020-2021 highlighted in the adjustments made in the Excise Duty, Value Added Tax, Income Tax, Stamp Duty and Non-Tax Revenue regimes.

Some of the proposed measures include; excise duty of  1,115 Shillings per litre on beer produced from  barley grown and malted in Uganda, excise duty of 1,700 Shillings per litre on ready to drink spirits, 2,050 Shillings per litre on malt beer, excise duty of 1,350 Shillings per litre on gasoline, 300 Shillings per litre on kerosene, and 1,030 Shillings per liter on gas oil and others.

The other proposed measures are excise duty of 2,300 Shillings per litre on wine made from locally produced raw materials, excise duty of 1,500 Shillings per litre on undenatured spirits made from locally produced raw materials, excise duty of 250 Shillings per litre on non-alcoholic beverages (Soda) not including fruit or vegetable juice and excise duty of 100,000 Shillings on licenses for provision of professional services.

The government envisages earning 677 billion Shillings from the tax policy measures. Uganda Revenue Tax administrative measures will collect 579 billion Shillings to finance part of the proposed 44.07 Shillings trillion budget.

However, the committee led by MP Henry Musasizi objected to the proposals saying that the government intentions were good but had come at an abnormal time where the majority of Ugandans are not certain of their future in the face of the coronavirus pandemic. He also noted that the country can work with the current tax laws in the recovery process.

Ntenjeru North MP Amos Lugoloobi said that Uganda’s economy has already been hit badly by the pandemic and that it would be wrong for the government to continue taxing it. Lugoloobi advised that the government should instead look at ways to resuscitate the economy from shock.

Lugoloobi, who doubles as the Chairperson of Parliament’s Budget Committee notes that the country’s budget can always be adjusted.

Ngora County MP David Abala noted that the entire world has already been over run over by the coronavirus pandemic and that in addition, Uganda is experiencing other problems like the invasion of locusts and storms among others. He adds that instead of suggesting tax measures, the Ministry should think of ways to cushion the economy.

Agago Woman MP Judith Akello Franca also expressed discomfort with the new tax measures saying that they were insensitive to the needs of Ugandans.

“Comparing fuel pump prices in the region at the moment and Uganda’s pump price is high yet you want to add more. These will stifle the economy; I would like the minister to withdraw these measures in the spirit of supporting the economy,” she appealed.

Kabula County MP James Kakooza also argued that this was not the time to tax Ugandans.

But Finance Minister Matia Kasaija appealed for more time to allow his technical staff retreat and look through the proposed taxes once again.

Earlier before interfacing with the committee, Kasaija acknowledged that the proposed tax measures were developed for a country operating in a normal situation.



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