Uganda: More taxes, poor quality services

OPINION

By Apophia Abamwesiga

Uganda Revenue Authority is projected to raise approximately sh16 trillion of domestic revenue from which sh418b will be non-tax revenue in FY 2018/19. This amounts to about 53% of the total revenue.

This revenue is expected from taxes collected from income tax, excise duty, VAT, stamp duty, among others which are paid directly or indirectly. The clear understanding is that Government is required to use such revenue to improve the welfare of the Ugandans as they expect positive changes.

Despite the ever increasing taxes, some crucial sectors that step up human development like education and health which would greatly stir economic growth are continuously deteriorating in terms of quality of service.

News reports had it that on the May 25, 2018, a Gaga bus travelling from Lira to Kampala was involved in an accident that left several lives injured and some died on spot. Some injured people who were rushed to the nearby hospitals died on arrival because of inadequacies in the health facilities as required equipment and medical personnel were not enough to handle causality cases.

Health is a very crucial sector and a relatively large amount of tax payers' money should be allocated to it so as to purchase enough medicines, recruit medical staff and equipment used in hospitals to avoid uncalled-for deaths. While Government has a good health strategy, its implementation needs rethinking especially with a focus to improve community wellness and improving and infant mortality rate.

Again, the news broadcast on one local TV station on Sunday June 24, 2018, revealed that while Good Gift Infant school in Mubende district is well situated around a gold mining centre, its condition is awful to the extent that wood is being used as a blackboard and teachers often send pupils for water to pour on the dusty floor to reduce the dust.

Such a learning environment challenges concentration in class and affects performance as such pupils will definitely be tested using the same standard as the rest of the pupils in the nation at the end of time. 

Worse still, on July 1, 2018, the Government introduced social media and mobile money tax that left many Ugandans angry and unwilling to pay. According to the State Minister for Planning at the Ministry of Finance, David Bahati, Government expects to raise an estimated sh100b from social media tax.

Many, Ugandans have not agreed with this tax based on up-going reactions since they already pay commodity tax when purchasing airtime and instead resorted to using Virtual Private Networks (VPNs) to avoid it. Well, most citizens can actually afford the sh200 for social media daily and 0.5% for each mobile money transaction however, the tax revenues collected are not commensurate to the quality of services provides.

It makes it even more complicated with several corruption cases undergoing investigations, some of which have taken forever to conclude yet some ordinary Ugandans deep rural settings are living in extreme poverty to the extent of starving. 

Ugandans would be happy to pay taxes if the returns are traceable. For instance, many of them engage in farming and would wish for major improvements in the agricultural sector and its attendant sub sectors like maintenance of dilapidated rural roads to enable easy access to market for farm products. 

If tax revenue is utilised to meet expectations, the willingness to comply with tax payment for a much better Uganda would be obvious compared to how Government is now struggling to justify the current regressive unfriendly tax proposals.

Writer is a research intern at the Uganda Debt Network