Attempts by Uganda’s parliamentarians to exempt themselves from tax has hit a snag after President Yoweri Museveni rejected the proposal.
The President has now written to the Speaker of Parliament Hon. Rebecca Kadaga detailing his reasons for rejecting the Income Tax Bill.
“I do not support the decision of Parliament and am accordingly returning the Income Tax (Amendment) Bill for reconsideration by the House,” Museveni said.
Parliament recently passed the Income Tax (Amendment) Bill 2016, in which it decided to amend Section 21 (1) of the Income Tax Act, Cap 340, to exempt the employment income of members of Parliament, except salary. The decision provoked public outrage, with many charging that it government was not being sensitive to the priorities of the country and the general economic condition of Ugandans.
Museveni said he rejected as “politically and morally incorrect” the law exempting themselves from paying certain taxes.
He said the decision by Parliament does not promote good practice because it risks to undermine the integrity of both the Courts and Parliament.
Museveni said he rejected the bill also because of the need to enhance revenue collection if the country is to meet the ambition of transforming into a middle income country by 2020 and meet short term demands for infrastructure development and social services.
“The decision by Parliament to grant themselves a tax exemption status is not only injurious to our revenue effort, but it is not politically and morally correct,” he said, “pointing out that small income earners like teachers, nurses and other public employees cannot be expected to pay income tax on their consolidated meagre salaries and yet Members of Parliament who earn considerably well are exempted.”
Museveni added that, “as a principle, salaries for all employees were consolidated to minimise abuse which was hitherto rampant through disguise of salaries in form of allowances. This was part of our efforts to change the tax paying culture in the country and improve tax effort,” the President said, adding, “What moral authority can parliament or government have to encourage the public to comply with their tax obligations when Members of Parliament have granted themselves special status? This would tantamount to applying double standards.”