MPs, Suruma clash over new tax

Aug 14, 2007

THE Budget Committee of Parliament yesterday disagreed with the Ministry of Finance over the implementation of the newly created Local Service Tax, which is to finance the local governments.

By Milton Olupot
and Mary Karugaba


THE Budget Committee of Parliament yesterday disagreed with the Ministry of Finance over the implementation of the newly created Local Service Tax, which is to finance the local governments.

The finance minister announced the introduction of the tax to replace the graduated tax, but the committee, chaired by Budama West MP William Okecho (independent), yesterday said its collection was not practicable.

The committee demanded that the Ministry of Finance finds other ways of funding the local governments, while the new tax was being streamlined.

The minister, Dr. Ezra Suruma, however, assured the committee that there was no alternative but to implement the proposed tax. “This financing gap can only be resolved by implementing the proposals in place.”

Bubulo East MP George Wopuwa (NRM) warned that the delays could maim the local governments.

“If nothing is done, the local governments are dead. The lack of revenue is already affecting them.”

Suruma insisted that the new tax was lenient and reasonable and should be implemented.

On the shortfall of sh8b for the implementation of the Universal Secondary Education programme, he accused the education ministry of diverting funds meant for paying teachers and buying scholastic materials to building schools.

“The money was allocated for specific purposes, but the ministry was over-enthusiastic and started building schools. I don’t tire in scolding them for using money meant for other purposes to fund the building of schools,” Suruma said.

He, however, gave assurance that the programme would not fail. “It will be fully funded and it will continue and succeed.”


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