By Musa Mugoya

In 2016, the Ministry of Lands, Housing and Urban Development issued the Uganda National Housing Policy 2016. The policy took stock of the available housing as well as the deficit.

It estimated the total housing deficit of over 1.7 million housing units – both in rural and urban areas. It attributed the huge housing deficit to the slow rate of construction of housing units at 60, 000 units compared to the national annual need of 200,000 units; the low purchasing power for the majority of the households due to the high poverty levels manifested in the form of the low household incomes; inadequate supply of affordable building materials on the market coupled with their high prices and the divestiture of government from the provision of housing.

Relatedly, the NRM manifesto 2021 – 2026 explicitly acknowledges that the high cost of building materials and technology and other related basic infrastructure is responsible for affordable and decent housing in the country. The same manifesto further recognises that about 60% of the population in urban areas resides in unplanned and informal settlements and slums that are characterized by substandard housing, overcrowding and limited access to essential public services such as clean and safe water, sanitation, healthcare and education, among others.

Despite both the Government Housing Policy and the NRM manifesto acknowledging the above challenges, the government largely opted for the relatively low responsibility, that is the regulation of the housing industry as opposed to the heavy weightlifting, funding the construction and acquisition of low–cost decent housing. Thus key among the guiding principles for the policy is that: Housing delivery is a core responsibility of individual households and the private sector; the government shall work towards providing a conducive environment to stimulate housing development as well as to directly intervene in housing production for specifically targeted groups.

It can be taken that a conducive environment entails enacting laws that protect the legal security of tenure and a tax regime that ensures the availability and affordability of construction services, materials, and facilities. Fiscal policy is one of the major ways through which the government can promote access to affordable housing for households. Through fiscal policy, the state can facilitate the affordable acquisition of land by the households and the private which it assigned the primary role of production of housing as well as the cost of construction materials low.

Unfortunately, some of the proposed tax proposals for the fiscal year 2024/25 only serve to exacerbate the current bulging decent and affordable housing deficit. This is contrary to the Housing Policy and the NRM manifesto for the current term. In the Income Tax (Amendment) Bill 2024, the government is proposing a 5 per cent tax on the gain realised from the sale of land in a city or municipality with the exclusion of land occupied by principal residences and rental property. Such a proposal will increase the cost of land acquisition which is the first step in owning a house for households especially. By all means, the 5% tax gain being imposed on the land vendors will be passed onto the purchasers.  With our inflated land prices, the taxation will make land acquisition more expensive for households and private sector players involved in the mass production of housing units.

Relatedly, the Excise Duty (Amendment) Bill 2024 also seeks to introduce UGX 500 excise duty on each 50kgs of cement, adhesives, grout white cement or lime. The introduction of the UGX 500 excise duty will also have a vertical effect on the price of building materials.

Again despite the Housing Policy and the NRM manifesto acknowledging the high cost of building materials is one of the major contributors to the housing deficit, the same regime is proposing taxes that would make the cost of building materials costly for the majority of households.

Over the years, the NRM regime has been entering into social contracts with Ugandan citizens through its manifestos in which it makes various commitments only to act to the contrary. Such actions take voters for granted and are not a good way to build our democracy. The regime should be held to account for negating the manifesto and the Policy that it used to solicit support.  

Through public policy, the government sets principles and plans to guide decision-making and action on specific issues such as housing. Equally, an election manifesto serves as a blueprint for a political, outlining, its principles, policies, and commitments to the voters upon being entrusted with the power. The proposed excise duty of UGX 500 on cement, adhesives, grout white cement or lime and the 5 per cent capital gains tax on land transactions is contrary to the Uganda National Housing Policy 2016 and the 2021 – 2026 NRM manifesto and therefore Parliament should out rightly reject the proposals.

The limited access to decent housing has subjected Ugandans, especially in urban areas to deplorable standards of living. Such settlements are prone to recurring conflicts among households and diseases which leads to avoidable out–of–pocket expenditures on health and loss of productivity in dealing with ailments. Adequate and decent housing is central to households’ realization of a good standard of living and consequently, the general economic growth of the country. It is therefore important for any government to work towards achieving the citizenry decent housing.  

The writer is a programme officer with Initiative for Social and Economic Rights (ISER)