MPs dash to court to block taxing of their allowances

The Members of Parliament through the Parliamentary Commission have filed a notice of intention to appeal against a court order directing Uganda Revenue Authority (URA) to deduct taxes from their allowances.

The notice which was filed at the Commercial Court on February 22, 2016, states that they are disgruntled with the ruling of Justice Henry Peter Adonyo of the Commercial Court and seek to be allowed to file a formal appeal at the Court of Appeal.

In February 2, 2016, Adonyo ordered that the MPs allowances including mileage and constituency allowances, basic pay, sitting allowance for committee sessions, town running allowances, car purchase allowances and gratuity, motor vehicle allowance and benefits in kind for example personal use of official vehicles, be taxed.

This ordered was to be effected by the Parliamentary Commission and URA from the date of judgment. The commission was tasked with the duty of deducting the taxes from the allowances and remitting it to URA.

The commission also tasked with a duty of collecting all the tax arrears owed to Government since 2004.

Adonyo argued that according to the Income Tax Act the commission is mandated to deduct taxes from its employees' wages, salaries, gratuity, bonuses, travelling, costs of living, housing and any other allowances, and remit to URA.

This ruling came after a tax expert; Francis Byamugisha filed a suit against Government, the commission and URA, in 2013, for failing to deduct taxes from the legislators' allowances.

In the suit, Byamugisha said that the MPs employment incomes are not taxed and that the Parliamentary Commission which is required by law to withhold income tax from the allowances and remit it to URA as Pay As You Earn (PAYE) tax, has not done so since 2004.

He therefore, wanted court to declare that all employment incomes of Members of Parliament are liable to PAYE.