Scrap VAT on water â€" legislators
May 07, 2007
THE parliamentary committee on natural resources wants Value Added Tax (VAT) on water scrapped to make it affordable.
By Joyce Namutebi
THE parliamentary committee on natural resources wants Value Added Tax (VAT) on water scrapped to make it affordable.
“The expense leaves the communities with no option but to revert to unsafe water sources,†the committee said in its indicative budget proposal for the next financial year.
Committee chairperson Emmanuel Dombo noted that the current policy where VAT is paid on bills as opposed to actual collections, impairs the cash flow status of the National Water and Sewerage Corporation (NWSC) and other urban water and sewerage systems.
He called upon the Government to clear its debt to the NWSC worth sh10.3b, saying the debt undermined the corporation’s financial position.
He said this financial year, works, goods and services for water projects was exempted from vat as recommended by the committee.
The committee was concerned about the increase in the unit cost for most projects. It considered this a threat to achieving the objective of the Poverty Eradication Action Plan and the Millennium Development Goals.
The MPs recommended that more funds for water be provided to areas where the internally displaced persons would be resettled.
They also recommended that the Government develops a sanitation policy to enable the finance ministry address sanitation matters.
THE parliamentary committee on natural resources wants Value Added Tax (VAT) on water scrapped to make it affordable.
“The expense leaves the communities with no option but to revert to unsafe water sources,†the committee said in its indicative budget proposal for the next financial year.
Committee chairperson Emmanuel Dombo noted that the current policy where VAT is paid on bills as opposed to actual collections, impairs the cash flow status of the National Water and Sewerage Corporation (NWSC) and other urban water and sewerage systems.
He called upon the Government to clear its debt to the NWSC worth sh10.3b, saying the debt undermined the corporation’s financial position.
He said this financial year, works, goods and services for water projects was exempted from vat as recommended by the committee.
The committee was concerned about the increase in the unit cost for most projects. It considered this a threat to achieving the objective of the Poverty Eradication Action Plan and the Millennium Development Goals.
The MPs recommended that more funds for water be provided to areas where the internally displaced persons would be resettled.
They also recommended that the Government develops a sanitation policy to enable the finance ministry address sanitation matters.