Govt plans fuel tax hike

May 18, 2013

The Government has ruled out the possibility of dropping the taxes it has proposed in the forthcoming 2013/2014 budget.

By Moses Mulondo

The Government has ruled out the possibility of dropping the taxes it has proposed in the forthcoming 2013/2014 budget.

Ever since the release of the budget framework paper last month which contains the draft budget that will be read in June, various sectors have protested the taxes, saying they will be an added burden to them.

In an exclusive interview with New Vision, Matia Kasaija, the minister of state for finance said those who want the Government to drop the taxes are wasting time.

“We cannot drop those taxes because we need to raise funds to fund various government programmes. Moreover, even with those taxes, we still have so many unfunded government priorities,” Kasaija argued.

Following corruption scandals which have caused the government to lose billions of money, donors have decided to withhold their support for Uganda’s budget by 93%, according to the budget framework paper.

The Government intends to introduce an additional 50% excise duty on fuel to get estimated revenue of sh72.72b, according to the framework paper. This tax will inevitably increase transport costs in the country.

The presidential budget advisory committee has also proposed an additional 1% levy by Uganda Communications Commission on the gross income of all telecom companies from which government expects to collect sh8.4b.

Government also plans to introduce a levy on international calls from which it hopes to collect revenue of sh40b. Mobile money transactions will also be taxed to generate estimated revenue of 48.2b

Government also plans to earn sh8b by re-introducing Value Added Tax (VAT) on water for domestic use and get an additional sh9m from citizenship and immigration control fees.

Taxes on fish exports and processed milk will also be introduced to generate sh9.2b and sh1.2b respectively.

Extra charges to be levied by Uganda Registration Service Bureau will generate revenue of about sh15b.

Motorcycle registration fee will be increased by sh70,000 to generate estimated revenue of sh5.04b while motor vehicle registration will be increased by sh200,000 to generate estimated revenue of sh7.2b.

The budget framework paper indicates that apart from the above, more tax measures will be introduced along additional URA efficiency to generate sh159.51b.

Last week Uganda Young Democrats (UYD) issued a statement asking the Government to drop all the taxes or they carry out a series of demonstrations.

Two weeks ago MPs MPs on the natural resources committee also threatened that they would not approve the budget for the ministry of water if the VAT on water, which the Government intends to introduce, is not dropped.

 

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