Views: 0
The government is defending a series of new taxes that could increase the cost of living if approved. These proposed taxes are outlined in five sets of tax Bills: the Excise Duty Amendment Bill, 2024; Stamp Duty Amendment Bill, 2024; Income Tax Amendment Bill, 2024; Value Added Tax Amendment Bill, 2024; and Tax Procedures Code Amendment Bill, 2024.
The State Minister of Finance, Mr. Henry Musasizi, introduced these proposals last Thursday, which were then sent for further review to the House Committee on Finance, chaired by Mr. Amos Kankunda.
Among the proposed taxes, the government plans to impose a Shs500 tax on each 50kg bag of cement, as well as taxes on gasoline, gas oil, and paraffin. These proposals have raised concerns among economic experts and Members of Parliament (MPs), with many opposing them.
However, the State Minister of Finance in charge of Planning, Mr. Amos Lugoloobi, has defended the tax proposals. He argues that these measures aim to reduce the government’s dependence on borrowed funds, which come with high interest rates.
Lugoloobi emphasized the need for revenue to come from within the country, stating that citizens must contribute through taxes on items like fuel and construction materials.
The purpose of these tax Bills is to increase revenue for the Uganda Revenue Authority (URA), which will then be allocated to fund activities for the Financial Year 2024/2025.
Despite the government’s justification, experts and legislators have raised concerns about the potential impact of these taxes, particularly on low-income Ugandans. They argue that the burden falls disproportionately on those who can least afford it.
Critics, including MPs like Moses Aleper and civil society representatives like Julius Mukunda, believe the proposed taxes unfairly target ordinary citizens and will exacerbate the already high cost of living.
Christine Byiringiro of Uganda Debt Network added that these measures would not alleviate the financial strain on ordinary Ugandans, as the cost of living is already too high.
In a recent development, the House Committee on Finance rejected a tax waiver request worth Shs13 billion due to insufficient evidence from the Ministry of Finance.
In defense of the government’s position, Lugoloobi explained that taxing kerosene was necessary to prevent fuel adulteration. However, critics like Albert Beine, CEO of Global Taxation Services, argue against such ‘easy fixes’ and advocate for better administrative procedures to ensure effective tax collection.
The proposed taxes cover a wide range of items, including motor spirit, kerosene, land sales, cement, bottled water, and alcoholic beverages, among others.
Source: The Ankole Times