Gov't to tax processed, unprocessed leaf tobacco

TAX  BUSINESS

KAMPALA - The government has tabled before Parliament a Bill for amendment of the Tobacco Control, Act 22 of 2015 for taxation of Processed and Unprocessed Leaf Tobacco.

Tabled before the House, by Finance Minister, the Bill entitled, the Tobacco Control (Amendment) Bill, 2020 was read for the first time and referred by speaker Rebecca Kadaga, to the parliament's committee on Finance for scrutiny.

"This is an Act to amend the Tobacco Control Act, 2015 to impose an export levy on processed leaf Tobacco," Reads Part of the Bill.

According to the Bill, the government wants section 23 (a) of the Act which is expected to come into force by July 1, 2020, amended for a levy on processed and unprocessed leaf Tobacco.

The Bill stated that; "The Tobacco Control Act, is amended by inserting immediately after section 23 the following, 23 (a) Levy on processed and Unprocessed Leaf Tobacco".

According to the government, there shall be a levy on unprocessed and processed leaf tobacco at the rate of USD 0.8 Per Kilo which is consigned out of Uganda.

The levy, according to the Bill, shall be paid by the consigner to the Uganda Tobacco Authority at the time the unprocessed or processed leaf tobacco is consigned out of Uganda.

In 2015, Parliament passed the Tobacco Control Bill, imposing tax on Tobacco products, which different stakeholders especially in the health sector, said is not deterrent enough for Tobacco Control.

"The taxation lacked taxation measures because the constitution and Parliamentary procedural rules don't warrant a private member of parliament to propose sections that impose a charge on the consolidated fund or impose sections," Moses Talibita, legal officer the Uganda National Health Consumer's Organization (UNHCO)said.

He said tax measures are the most proven effective for tobacco control. Talibita expressed Optimism that the proposed tax will help the government raise more revenue and also save lives.

Taxes

The Organization has also presented to the finance committee of Parliament which is currently scrutinizing the tax Bills for the Financial year 2020/2021, proposals for amendment of section 2 of the Excise duty amendment Bill 2020, to raise cigarette prices to finance development and non-communicable diseases.

"Given that Tobacco harms animal, plant and human health, with a high potential of bankrupting health financing of Uganda; excise duty Amendment Act of 2020 is central in the implementation of Uganda's Domestic Revenue Mobilization Strategy of 2019. It is enough that Uganda's fiscal measures that have kept cigarettes cheap since 2014 to date, "Talibita said.

UNHCO proposed that Parliament amends section 2 of the Excise Duty Act of 2019 by removing any forms of tax exemptions/incentives and categories in conformity with section 23 of the Tobacco Control Act of 2015.

The organization, also wants the government to introduce a uniform tier with a specific rate and adopt an excise duty tax of Sh250,000 per 1000 cigarette sticks and eliminate ad valorem cigarette Taxation system by deleting soft cap and Hinge lid.

They want the government to Increase all tobacco product taxes beyond 70% in conformity with the World Health Organization (WHO) tobacco tax fiscal standards.