Government asked to remove VAT on water

Basing on the belief that access to clean water is a human right; a call has been made to government to scrap off Value Added Tax (VAT) on Water to enable every Ugandan including low-income consumers to also access clean tap water.

The proposal was made by students pursuing masters degrees in Public Infrastructure Management (MPIM) at Makerere University following their study tour to South Africa.

In May this year, a total of 22 second year masters students under MPIM visited South Africa and areas of study were roads and transport management, energy resources management and water resource and sanitation management.

The team that undertook a water tour study found out that 92% of South Africans have access to clean water while in Uganda, 67% have access to clean drinking water.

The senior monitoring and evaluation officer in the Ministry of Water and Environment, Josephine Apajo while presenting findings of the study on behalf of other students, said South Africa removed VAT on water, almost everyone can access clean water and this has among other advantages reduced cases of diseases related to consumption of unclean water.  

"Uganda should borrow a leaf from South Africa and increase the percentage of people accessing clean water. One of the ways to do so is through scrapping off vat on piped water," she said.

"Access to safe and clean water is a human right; everybody should be given water for free, this will help in addressing challenges involved in consuming dirty water like outbreak of water borne diseases like typhoid, cholera" she added.

In 2013 while still the Minister of Finance, Maria Kiwanuka reintroduced 18% VAT on water for domestic and government projects with the purpose of collecting sh8b in revenue to fund the sh13.1 trillion 2013/14 budget.

In addition, Apajo revealed that while in South Africa sanitation is under the Ministry of Water and Sanitation, in Uganda there is no specific ministry in charge of sanitation.

She proposed sanitation in Uganda be part of Water and Environment ministry.

This was during the MPIM study tour dissemination seminar held at the main campus and organized by Makerere College of Business and Management Sciences (CoBAMS).

Umar Kakumba, associate professor and Dean, CoBAMS said the health budget is escalating every financial year; removing VAT on water would be beneficial because it means many people would be able to access clean drinking water and disease outbreaks would be minimal thus cutting costs on treatment.

He however noted that research is necessary to determine whether it is a tangible solution and its impact.

The guest of honour Dr. Henry Rubarenzya, the Head of Research and Development, Uganda National Roads Authority (UNRA) said the challenges affecting the infrastructure sector are largely corruption, budget limitations, bureaucracy, poor quality infrastructure, high cost of the infrastructure and inadequate local competent and skilled labour. 

To address these challenges, he said leadership and management skills take centre stage in addition to key capabilities required to make a significant impact to the infrastructure including innovation, public funds management, and human capital development. 

"We have to deliberately build skills through continuous training, exposure, internships and rightful deployments," he said.   

On the proposal to scrap VAT on water, Rubarenzya said it is a proposal that has to be looked at holistically.

He reasoned that some development partners like World Bank are halting financial support to Uganda, government is looking for ways to get money and run projects in various sectors, therefore removing VAT on water would not be a good idea.