Is there a mismatch between Uganda's tax regime transformation process?

By Frederick Kiapi K.

In response to the New Vision’s headline of January 29, 2015 titled “Tax on private school starts” makes those desirous of investing in education to wonder if our tax regime is compatible with the country’s development plans like NDP and VISION 2040.

As we noted and read how most of the owners of private school in the country vehemently opposed the imposition of the tax by URA on their business, there is an assumption that our tax administrators are either not setting priorities right or just simply come up with unrealistic taxes without due diligence to the needs of the economy and its sector like education.

The country may be racing to raise taxes for its development agenda but stakeholder consultations need be done before any new tax is introduce with any sector in order to create a balance and have all accept any new tax being introduced.

URA, when given a green light by the finance ministry to impose a tax, should not rush as its been with the education tax on private school. With the country’s ailing education system this will strife growth and quality as most investors will be looking at profit maximization than service delivery.

As we speed against time to implement VISION 2040, government and all its MDAs have to rethink their implementation strategies to avoid citizen rejection and resentment as this is bad for the economy and more investors towards any taxable venture shall shy away if they view the tax as an hindrance.

Many commentators have over the years been calling for the country’s tax regime to be reformed but little is forthcoming and this makes it very different to introduce new taxes in case the status quo does not change. URA should consult more and seek other avenues that can bring in more taxes if the country’s transformation process is to remain on track otherwise the education sector will continue to decline.

As the teachers called for reform and detaxization of the various payments they make to local authorities like KCCA and the central government, URA needs to make the wrong right than its insistence that the tax will start cannot bring consensus and ensure sustainability not only in the education sector but others like on communications, health and water that benefit millions of low income earners. 

Their take (teachers) that “if you tax a sector, you must tax the whole of it and if you want to tax education, even public schools should be taxed” brings into question as to what formula did the finance ministry use to conclude that private school make too much profit and they warrant to pay tax an imbalance in the country’s economic growth.

The writer is the Executive Director of the Commonwealth Association-Uganda