Kampala, Uganda | THE INDEPENDENT | Parliament on Wednesday passed the Excise Duty (Amendment), 2022, but rejected a proposal seeking to reduce tax on fuel.
The proposal was carried in a minority report presented by Kampala Central MP, Muhammad Nsereko.
Nsereko proposed that the excise duty on motor-spirit gasoline which currently stands at 1,450 Shillings be reduced to 750 Shillings.
“It was observed that between January 2021 and February 2022, prices have increased by 70 percent. The increase in fuel prices has had a ripple negative effect on other factors of production, especially transport costs and the overall value chain of raw materials to finished products,” Nsereko said.
He argued that the situation will force many people to lay off workers in light of the high costs of production, thereby defeating the Government’s objective of employment creation.
“As a stop-gap measure, this year, this House has been on record seeking government intervention on the ever-escalating fuel prices but to no serious answer availed. Fuel-driven inflation has forced the cost of living including education leaving disposable income diminishing and forcing many businesses to close or to lay off workers,” he further explained.
He said that the only remedy available is to reduce the cost of living through the reduction of taxes on fuel which shall force the price to go down.
Sheema Municipality MP Dickson Kateshumbwa opposed the proposal saying that this measure was going to affect revenue collections.
Geoffrey Ekanya, the Tororo North MP, and Faith Nakut, the Napak Woman MP said that there was no evidence that tax reduction would automatically lead to reduced prices.
However, Parliament approved the proposal from MP Nsereko to increase taxes on sugar confectionaries like chewing gum, chocolate, and sweets by 20 percent.
Domestic revenues for the coming financial year 2022/2023 are projected to amount to 25.54 trillion Shillings. Out of this, tax revenue is 23.755 trillion and Non-Tax Revenue (NTR) 1.79 trillion.