By Mary Karugaba Moses Walubiri and Henry Sekanjako
KAMPALA - Parliament has asked Government to drop a proposal that introduces 18% VAT on water.
Debating the report on natural resources on Thursday, the MPs argued that taxing water will only hasten the problem of accessing clean water.
“The tax on water will affect the urban poor who will not access safe water due to increased costs.
The committee on natural resources recommends that this proposal be dropped,” the committee chairperson Michael Werikhe said.
According to Werikhe, the Government has a duty to provide its citizens clean water and should ensure that where water is paid for, it’s affordable to the poor.
He advised the Government to rather find other alternative sources of income to support the budget.The committee members feared that the effect could lead to breakout of diseases as a result of water shortage.
In her budget, Finance minister Maria Kiwanuka said Government proposes to introduce VAT of 18% on water. If implemented, the move is expected to generate more sh24b in revenues.
Minister of Environment Ephraim Kamuntu said the tax will only apply to piped water and not borehole or spring water. However, he declined to state the ministry’s position on the matter and threw the issue to Finance to explain.
A 20-litre jerry can of water costs between Shs150 and Shs200 depending on the location and scarcity of the resource. However, there are fears among the population that water prices are going to double or hit Shs500 per 20-litre jerry can because of the tax.
During the debate, MPs also expressed concern over the increased rate at which the environment is being degraded.
They observed that of recent there has been increased construction in the wetland especially in urban areas, leading to increased costs of water treatment.
The MPs recommended that Government henceforth stops the issuance of land titles in the wetlands and also gazette all the wetlands in the country to stop encroachment.