MPs protest new workers tax
Jun 16, 2007
The Government’s decision to introduce the local services tax has come under fierce criticism from workers MPs who have threatened to block it.
By Felix Osike
The Government’s decision to introduce the local services tax has come under fierce criticism from workers MPs who have threatened to block it.
“It is unfair to the workers and we are not going to accept it,†MP Sam Lyomoki said. “You cannot have Pay As You Earn (PAYE) which is already a burden to the workers and you create the local service tax. They are all taxes on people’s incomes.â€
Finance minister Dr. Ezra Suruma on Thursday announced a new tax, called the Local Service Tax, on wealth and incomes of workers and professionals, to replace the Local Government’s graduated tax.
The tax would be levied on all employees, self-employed and practicising professionals, artisans, businesspeople and commercial farmers. Those exempted would include soldiers, Policemen, local defence forces and prison officials, as well as the un-employed, peasants and people leaving in poverty who are unable to earn a minimum income.
But Workers MPs have protested the new tax, arguing it amounted to double taxation. He said they had two options. “We either block it in Parliament so that it is struck off during the debate on the budget, or we move an amendment through a private members Bill to abolish Pay As You Earn.â€
Lyomoki warned of nation-wide strikes from workers if one of the taxes was not dropped “This tax is dangerous and it is going to lead to a serious national struggle,†he predicted.
State Minister for Sports, Charles Bakabulindi who also represents the workers in Parliament, said he was yet to study the proposal to know who will be affected. “But if it is on the workers who are already paying PAYE, then it is double taxation,†he observed.
Workers MP Nabulya Ssentogo concurred with Lyomoki, arguing that without a minimum wage policy in place, the workers would even suffer more with the new tax. “It is not good for the workers. The wage earners will pay double tax. We are going to voice our dissatisfaction’, she asserted.
Another Workers MP, Marion Tunde, noted that while there were positive things in the budget, like the payment of pension arrears, the introduction of local services tax was inappropriate. “It is a violation of workers rights. We are not happy about it and we are going to raise our concerns.â€
The opposition, too, objected to the new tax. Shadow finance minister Nandala Mafabi described it as “ridiculous.â€
Opposition Chief Whip Kassiano Wadri said such a tax should only be levied on professionals who have firms, not local artisans or workers who are already paying PAYE.
“It would be unfair to even MPs who are already paying PAYE. If it comes in that form, I will not support it,†warned Wadri.
When Parliament resumes on June 26, the first item on the agenda will be the approval of the Vote on Account, by which the Government obtains approval for a sum sufficient to incur expenditure on various items for a part of the year as it waits for the approval of the entire budget.
Before the budget debate, MPs will discuss President Yoweri Museveni’s State-of-the-Nation address, which was delivered last week.
The Government’s decision to introduce the local services tax has come under fierce criticism from workers MPs who have threatened to block it.
“It is unfair to the workers and we are not going to accept it,†MP Sam Lyomoki said. “You cannot have Pay As You Earn (PAYE) which is already a burden to the workers and you create the local service tax. They are all taxes on people’s incomes.â€
Finance minister Dr. Ezra Suruma on Thursday announced a new tax, called the Local Service Tax, on wealth and incomes of workers and professionals, to replace the Local Government’s graduated tax.
The tax would be levied on all employees, self-employed and practicising professionals, artisans, businesspeople and commercial farmers. Those exempted would include soldiers, Policemen, local defence forces and prison officials, as well as the un-employed, peasants and people leaving in poverty who are unable to earn a minimum income.
But Workers MPs have protested the new tax, arguing it amounted to double taxation. He said they had two options. “We either block it in Parliament so that it is struck off during the debate on the budget, or we move an amendment through a private members Bill to abolish Pay As You Earn.â€
Lyomoki warned of nation-wide strikes from workers if one of the taxes was not dropped “This tax is dangerous and it is going to lead to a serious national struggle,†he predicted.
State Minister for Sports, Charles Bakabulindi who also represents the workers in Parliament, said he was yet to study the proposal to know who will be affected. “But if it is on the workers who are already paying PAYE, then it is double taxation,†he observed.
Workers MP Nabulya Ssentogo concurred with Lyomoki, arguing that without a minimum wage policy in place, the workers would even suffer more with the new tax. “It is not good for the workers. The wage earners will pay double tax. We are going to voice our dissatisfaction’, she asserted.
Another Workers MP, Marion Tunde, noted that while there were positive things in the budget, like the payment of pension arrears, the introduction of local services tax was inappropriate. “It is a violation of workers rights. We are not happy about it and we are going to raise our concerns.â€
The opposition, too, objected to the new tax. Shadow finance minister Nandala Mafabi described it as “ridiculous.â€
Opposition Chief Whip Kassiano Wadri said such a tax should only be levied on professionals who have firms, not local artisans or workers who are already paying PAYE.
“It would be unfair to even MPs who are already paying PAYE. If it comes in that form, I will not support it,†warned Wadri.
When Parliament resumes on June 26, the first item on the agenda will be the approval of the Vote on Account, by which the Government obtains approval for a sum sufficient to incur expenditure on various items for a part of the year as it waits for the approval of the entire budget.
Before the budget debate, MPs will discuss President Yoweri Museveni’s State-of-the-Nation address, which was delivered last week.