By Peace Serunkuma

This is a response to an article that appeared in The New Vision of September 20, entitled: “Employers of disabled to get tax-cuts”. It relates to a debate in Parliament on tax reductions for employers who employ more than 10 people with disabilities.

Persons With Disabilities (PWDs) constitute approximately 3 million of the Ugandan population. Disability means persons with impairments and attitudinal and environmental barriers that hinder full and effective participation in society on equal basis with others.

Citizens of any country have a right to employment, but PWDs the world over find it difficult to find employment, necessitating countries to enact laws to enable disabled persons to access the labour market. In Uganda, the People With Disabilities Act was enacted, among other things, to provide for the employment of PWDs in the formal sector.

The law prohibits discrimination, in regard to employment of any person on grounds of disability. The law provides for employment quotas and tax-refund of 15% to an employer who employs 10 or more disabled persons. The state minister for elderly and disability affairs is expected to determine the quota in consultation with the employer organisations. The minister then publishes the quota and demands returns from employers on employment of PWDs.

Furthermore, the minister is supposed to report to Parliament on the employment situation of disabled persons. Three years have gone by and the minister has not implemented these provisions.

Under the famous section 17, an employer who employs 10 or more employees with disabilities (including apprentices or learners) is entitled to a tax refund of 15% (now reduced to 2%) of all payable taxes. This is a very generous legal provision given by Parliament to employers in the name of employing PWDs persons.

No wonder the minister of finance reported to Parliament that some employers were exploiting this provision in the Act leading to an estimated loss of sh20b in tax revenue per annum. The Government could have lost even more than that.

When we talk about employment, it may mean permanent and pensionable or contract employment but may also mean casual, voluntary or temporary employment. It could also mean employment as a manager but it may also mean being employed as a sweeper, tea girl, messenger or such low level employment.

With regard to tax refund, the law talks about all payable taxes like the profit tax, corporate tax, VAT, import/export duty. The figure of taxes payable annually by a large employer may be in millions of shillings and even 2% of all payable taxes could far exceed the total wages paid to the 10 disabled sweepers, tea girls and receptionists.

An employer can hire 10 employees with disabilities in such low level jobs on temporary or causal basis and claim tax refund. He may even under pay them since they are disabled and there is no law on minimum wage.

It is, therefore, questionable whether the amount lost in tax refunds justifies the employment of 10 people with disabilities and whether this incentive is beneficial to disabled persons in general.

The law does not provide for a clear system of enforcement and monitoring. The law must be clear on the term employment to protect people with disabilities against exploitation by some employers who may employ them on casual or temporary basis for purposes of claiming tax refund.

Furthermore, the incentive should include the quota system. The law should provide absolute numbers for small employers and percentages of the total workforce for the large ones. This will provide for many more people with disabilities to be employed.

There should be a system to check abusers of the law. The employers should be required to send returns to the minister at the end of each financial year. Inspectors should be deployed to carry out spot-checks on the returns submitted by the employer. An employer’s claim for refund should be certified by the inspectors.

The law should provide for sanctions against employers who fail to comply with these provisions.

Finally the law needs to be overhauled because there are some provisions which do not provide people with disabilities persons with legal recourse such as “government shall encourage”. The overhauling of this Act should provide the opportunity to enact a new one which would reflect the UN Convention on the Rights of Persons with Disabilities. The convention covers, in a more comprehensive way, the rights of persons with disabilities.

The writer is a project officer,
Uganda National Action on Physical Disability