Graduated Tax To Stay
Sep 24, 2003
PRESIDENT Yoweri Museveni has said the Government will not abolish graduated tax as advocated by some politicians,
PRESIDENT Yoweri Museveni has said the Government will not abolish graduated tax as advocated by some politicians, reports Felix Osike.
In a speech read by education minister Dr. Khiddu Makubya at the launch of the Local Government Develo-pment Programme (LGDP) II at Wakiso district headquarters yesterday, Museveni said districts should take local revenue generation and collection seriously to reduce donor dependency.
“There have been a lot of press reports regarding the future of graduated tax. It is still in force and the Government does not intend to abolish it because it is still the principal source of revenue for the bulk of our local governments,†the president said.
A group of MPs led by Okullo Epak have been pushing for a motion to scrap the tax, saying it was regressive and a burden to the poor.
Museveni said the Government had introduced a graduated tax structure whereby the poor, who earn about sh300,000 annually, pay sh3,000, while those whose incomes are above sh1.5m pay sh 100,000.
But the president warned local governments against assessing incomes arbitrarily.
“Local governments must handle assessments and collection of graduated tax harmoniously so as to encourage taxpayers to pay. Failure to do this will mean they will be unable to raise sufficient revenue, which will undermine the delivery of services,†he said.
The LGDP 11 will cost US$165m. The World Bank has provided a US$75m grant and a credit of US$50m, while donors gave a grant of US$25.2m making a total of US $ 150.2m.
Ends
In a speech read by education minister Dr. Khiddu Makubya at the launch of the Local Government Develo-pment Programme (LGDP) II at Wakiso district headquarters yesterday, Museveni said districts should take local revenue generation and collection seriously to reduce donor dependency.
“There have been a lot of press reports regarding the future of graduated tax. It is still in force and the Government does not intend to abolish it because it is still the principal source of revenue for the bulk of our local governments,†the president said.
A group of MPs led by Okullo Epak have been pushing for a motion to scrap the tax, saying it was regressive and a burden to the poor.
Museveni said the Government had introduced a graduated tax structure whereby the poor, who earn about sh300,000 annually, pay sh3,000, while those whose incomes are above sh1.5m pay sh 100,000.
But the president warned local governments against assessing incomes arbitrarily.
“Local governments must handle assessments and collection of graduated tax harmoniously so as to encourage taxpayers to pay. Failure to do this will mean they will be unable to raise sufficient revenue, which will undermine the delivery of services,†he said.
The LGDP 11 will cost US$165m. The World Bank has provided a US$75m grant and a credit of US$50m, while donors gave a grant of US$25.2m making a total of US $ 150.2m.
Ends