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By Godfrey Kiyingi/KMA Updates
The Minister Of State forF inance and General Duties Henry Musasizi, has defended the increase of tax on fuel products from Shs1450 to Shs1550 saying Uganda’s economy has recovered from the COVID-19 pandemic & the increase is part of Parliament’s earlier recommendation to have tax on fuel products increased every two years. The Minister said Gov’t is eyeing to generate additional revenue of Shs200.92Bn from fuel tax.
Government in the excise duty amendment bill 2024 is proposing to increase excise duty on fuel products by 100 shillings per litre of petrol or diesel and 300 shillings per litre of kerosene.
Musasizi, while appearing before Parliament’s Finance Committee has informed MPs that Parliament agreed with Government that they would increase Excise duty on fuel products by Shs100 per litre every 2 financial years except the COVID-19 Pandemic period and Since the economy has recovered, we think it is time to make the adjustments.
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MPs on Parliament’s Finance Committee have thrown out the proposal to exempt Bujagali Hydro-electricity Limited from paying tax for another one year, after discovering that the proposal was smuggled into the tax bills, because the provision wasn’t provided for in the Income Tax Amendment Bill 2024 that was tabled before Parliament.
This followed a request made by Henry Musasizi, Minister of State for Finance who proposed the amendment to Section 21(1) of the Income Tax Act to provide for a one year tax exemption for income of Bujagali Hydro-power Project up to 30th June 2025, saying the move is intended to reduce the electricity tariff pending the conclusion of the Auditor General’s review of the project.
Otuke county mp Paul Omara says that this time he will not support this amendment.
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The Ministry of Finance also defended the proposal to impose a 0.5% levy on cash withdrawals from agent banking, saying the move is intended to expand the scope of money withdrawals services beyond Mobile Money transactions to include other similar payment solutions and agent banking withdrawals because the poor are already paying taxes on mobile money, thus the need to have the rich people using agency banking to pay their share of tax.
Government also defended the new tax rate on construction materials like lime, arguing that unlike sentiments in the public, the levy of Shs500 per 50Kg on cement isn’t a new tax because the Government is already imposing it, but there was a need to expand the tax to other construction materials.
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