CSO STATEMENT ON THE 500 BN TAX WAIVER AND THE PROPOSED PAYMENT OF TAX ON OVER THE TOP TO SERVICES FOR MEMBERS OF PARLIAMENT
Oxfam in Uganda in partnership with the Tax Justice Alliance in Uganda, SEATINI, CSBAG, and Anti-Corruption Coalition Uganda (ACCU) have released this statement in response to the legislators’ decision on three important aspects
- Waiver of taxes for some corporations: While enacting the Tax Procedures code Amendment Bill 2019, the parliament of Uganda wrote off taxes to a tune of over 500 billion for selected private companies on whose behalf government was expected to pay taxes. In May 2017 it was reported that the Government was expected to pay UGX 77.2 billion of taxpayers’ money to Uganda Revenue Authority (URA) on behalf of seven private companies which the Minister of Finance had granted as tax waivers for varying periods. This revenue that is lost is enough to pay 69,444 grade three primary school teachers a monthly salary of shs. 600,000 for a whole year. This week, as schools opened, teachers began their industrial action demanding for increment in pay for which government says there no money. Alternatively, the revenue lost is enough to pay 67,954 nurses a monthly salary of shs. 613,158 for a year.
- Parliament signed a contract worth 197 million to pay for legislators’ Over the Top (OTT) taxes. It is worth noting that members of Parliament passed the tax on Over the Top services despite the public outcry against the enactment of the tax during which it was noted that the tax was regressive in nature, bound to limit access to information, stifle budding technology innovations and stagnate penetration of the internet.
- Members of Parliament (MPs) approved 39% increment in allowances for MPs and 15% increment for parliamentary staff in the 2019/that will cost taxpayers an additional Shs63.46b in the 2019/20 budget. In 2015, the Constitutional Court declared that Section 5 of the Parliament (Remuneration of Members) Act 1981 unconstitutional. It should be remembered that in 2016, Members of Parliament included a clause in the Income Tax Act cap 340 to exempt themselves from paying tax on their emoluments. This exemption costs the country up to shs. 33bn annually.
- Auditor General should undertake a comprehensive audit for all tax expenditures in Uganda and publish such information to ensure fiscal transparency and accountability.
- Any exemption whether statutory or from the executive should follow well laid out guidelines. Uganda presently lacks clear guidelines on tax exemptions.
- The government should establish a multi-stakeholder monitoring panel including policymakers and civil society to evaluate the relevance of awarded tax incentives, exemptions and holidays that reports to parliament.
- Parliament reverses the proposal to pay taxes on Over the Top Services for members of Parliament.
- If Members of Parliament cannot afford to pay taxes on Over the Top services, it should repeal section 6(g) of the Excise duty Act on OTT. An independent renumeration body should be established to determine salaries and benefits for all public servants including Members of Parliament.