Parliament has approved a government proposal to exempt Value Added Tax (VAT) on the supply of Bibles, Qurans, hymn books, other liturgical books and educational text books. The holy books have been attracting a standard VAT rate of 18 percent.
The members also agreed unanimously to exempt the movie production sector.
This followed the passing of the Value Added Tax Amendment Bill, 2018 in which government proposed the exemption of VAT on the holy books in the coming financial year 2018/2019.
According to the report on the Bill presented by State Minister for Planning, David Bahati, Parliament’s Finance Committee recommended that Parliament adopts the proposals within the government Bill.
According to Bahati, nearly all Bibles and Qurans which are used in the Country are imported into Uganda as donations and the exemption will provide relief to donors and also help the religious bodies in attaining their objectives.
The Minister also said that the exemption of VAT on movie production is intended to promote production of movies in Uganda which has other benefits such as employment creation as well as promotion of image of the country and tourism.
Clerics across faith groups recently came out to support the exemption of VAT on bibles and Qurans saying that religious materials should be tax-exempted since they are used for spiritual nourishment of Ugandans.
The recent move by Uganda Revenue Authority (URA) Commissioner General, Doris Akol, to seek Shilling 8.9 million tax payment on 9,120 bibles from the Church of Uganda (COU) was met with resistance from the Archbishop Stanley Ntagali.
In her April 19th letter to Ntagali, the URA Commissioner General said that it was an anomaly for the Revenue body not to collect taxes on the holy books in the past requiring the Church to pay tax on a consignment of 9,120 prayer and hymn books imported from Nairobi, Kenya.
This followed an earlier letter dated 18th March in which Archbishop Ntagali noted that the items had been shipped in by Centenary Publishing House Limited, Church of Uganda’s (CoU) publishing arm, which in his view should be exempted from tax.
URA released the consignment after COU paid Shillings 8.9 million but Ntagali insisted that the holy books were used to educate the masses and Christians by spreading the word of God.