Kampala, Uganda | THE INDEPENDENT | The National Environment Authority (NEMA) Executive Director Tom Okurut has called for the removal of the tax on Liquefied Petroleum Gas (LPG) to encourage its use among Ugandans, instead of cutting forests for charcoal and firewood.
LPG was exempt from taxation in 2006. But the tax was re-introduced in 2015 with the hope that the country would start producing its own gas when oil starts flowing. They now attract an 18 per cent VAT.
But Okurut says that the tax means fewer people can sustainably use gas. It costs 150,000 Shillings to buy a 6-kilogram cylinder, which is refilled at between 60,000 to 70,000 Shillings– an amount that can be out of reach of many households.
He hastens to add that while the target for the first oil keeps being moved ahead, the country is losing forests at a faster rate than anyone can stop. The country now hopes to start production in 2023.
According to the 2018 Statistical Abstract from Uganda Bureau of Statistics, the country is losing forests at high speed, with charcoal and firewood production being a major cause. In 2015, UBOS said that Uganda had a total of 1.9 million hectares of forest land compared to 4.9 million hectares in 1990.
This is a reduction of 60 per cent over a period of 25 years. In 1990, forests covered 20.4 per cent of the land area of the country compared to less than 10 per cent in 2015.
Gloria Namayo, an official from the United Nations Development Programme-UNDP said the aspect of green financing options must be considered in the finance options for the National Development Plan III-NDP III. This can include tax reforms that exempt environmentally friendly technologies.
In the tourism sector, there have also been calls to have LPG prices reduced. Joseph Halim, the Managing director of Dream Balloons, said gas costs made up more than 50 per cent of their costs when running hot air balloons in Murchison falls park, making the venture expensive.