Parliament rejected new Tax measured by Finance Ministry

By Jolly Gwari

Kampala – Parliament’s Finance Committee has rejected the new tax measures that the Ministry of Finance is introducing for the 2020/2021 financial year. The committee argued that Ugandans are already economically stressed as a result of the negative effects of COVID 19.

The appeal was made by the Finance Committee of Parliament during an interface with Minister Matia Kasaija.

The minister appeared before the committee to present and defend the new tax measures for the financial year 2020-2021.

MP Ntenjeru North Amos Lugoolobi objected the new measure saying it’s inequitable to increase taxes in this stressful situation

“The crisis will be there and in the situation of a crisis I think we should not be seen rising taxes, people will think we are mad” Amos Lugoolobi. Lugoloobi, who doubles as the Chairperson of Parliament’s Budget Committee notes that the country’s budget can always be adjusted.

Ngora County MP David Abala noted that Uganda is already experiencing other problems like the invasion of locusts besides the pandemic virus that is putting the country on tension. He adds that instead of suggesting tax measures, the Ministry should think of ways to safeguard the economy.

However, Finance Minister Matia Kasaija appealed for more time to allow his technical staff retreat and look through the proposed taxes once again.

Notably, the new measures introduced include an increment in taxes charged on fuels, alcoholic drinks, and tobacco among other products. The government is hoping to collect UGX661b in the new tax measures as part of the UGX21.7 trillion revenue projections in the 2020/2021 financial year.

The new tax measures are to avow the stump duty, excise duty, and value-added tax, income tax, and non-tax revenue regimes. The government wanted 1,115 Shillper litre on beer produced from barley grown and malted in Uganda, excise duty of UGX1,700 per litre on ready to drink spirits, UGX 2,050 per litre on malt beer, excise duty of UGX 1,350per litre on gasoline, UGX 300per litre on diesel and petrol, and UGX 100 per litre of kerosene.

The other proposed measures are excise duty of UGX 2,300 per litre on wine made from locally produced raw materials, excise duty of 1,500 Shillings per litre on indentured spirits made from locally produced raw materials, excise duty of 250 per litre on non-alcoholic beverages (Soda) not including fruit or vegetable juice and excise duty of UGX 100,000 on licenses for provision of professional services.

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