Kampala, Uganda | THE INDEPENDENT | Parliament on Monday declined to approve the External Trade (Amendment) Bill, 2021 under which government proposed to levy US Dollars 0.4 per kilogram of exported maize brand, wheat bran, cotton cake and different by-products of the milling industry.
The tax proposal was rejected after the State Minister of Finance for Planning David Bahati and Parliament’s Finance Committee agreed that the levy would cause challenges in the East African Community- EAC and also lead to high prices of the products.
However, Donozio Kahonda, the Ruhinda South MP had earlier on during the debate argued that most of these products are exported to Kenya something that causes their scarcity in the country. He suggested a need to impose a tax so that farmers in the country are protected.
“We cannot say we are fighting for our farmers when the products are being exported,” said Kahonda.
In response, Bahati said that new information regarding the proposal had been gathered and this informed the decision to drop the Bill. He said that they had established that the proposal would cause government problems with it’s neighbors.
The Minister and the MPs also agreed to drop a proposal for annual vehicle licenses under the Traffic and Road Safety (Amendment) Bill, 2021.
Government had proposed a charge for everyone who owns a motor vehicle, trailer or engineering plant or uses it on the road before the 31st day of January of every year, as prescribed by the Minister.
Bahati told parliament that the measure was aimed at streamlining the car registration and ownership to eliminate those that are illegitimate.
But MPs rejected the proposal saying it will have a negative effect and there is an element of double taxation. Jane Pacuto, the Finance Committee Vice Chairperson reminded parliament that government had previously in 2007 repealed the same tax and introduced it as tax on fuel.
“The proposal imposes high costs of doing business especially on the tourism sector and companies with large fleets and this will result in difficulties in tax compliance and administration leading to corruption.
Bahati said they agreed with the committee to first prepare on how to access the tax and how the tax will be collected.