Uganda loses sh1.5 trillion in tax exemptions

Non-government organizations (NGOs) have called on government to pursue a balance between tax and investment regimes to ensure people's rights but also promote investments at the same time.  This should be done by governments taking serious their obligations under the tax and investment policies and how they impact on human rights obligations.

These are some of the recommendations made by SEATINI Uganda and OXFAM following a study on tax regime in Uganda that showed that Uganda lost sh1.5 trillion in the financial year 2013/14 in tax exemptions.Tax exemption refers to a monetary exemption which reduces taxable income. Tax exempt status can provide complete relief from taxes, reduced rates, or tax on only a portion of items.

The report titled "Fair Tax Monitor" was conducted by the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI) and OXFAM in 2015.Findings from the study showed a revenue shortfall of 6.4% of GDP in 2015/2016 which will now be footed by the poor through regressive tax policy measures, explained Faith Lumonya, program officer in charge of Trade and Investment at SEATINI Uganda.

She added that such short falls will fuel state borrowing which will further increase public debt that currently stands at sh29, 984 billion, added Lumonya."If not foregone, such revenue would service the country's debt burden and the subsequent interest; and sufficiently fund critical sectors of human rights for the enjoyments of people's rights to health, education, food and development," she said.

According to Lumonya, much as taxation and investment are important for any country's development, the way taxation investments are managed can undermine human rights as well as government's ability to protect people's fundamental human rights.She however noted that with proper tax administration, taxes are important for the development of any country in terms of tax revenues which arise from the taxation of profits of corporate companies, organizations and employees' wages among others.
 
"Money collected from all these channels can be reinvested to increase the country's wealth and finance the country's development," Lumonya added. Solutions to such finds will be addressed on the side-lines of the upcoming 3rd National Conference on Economic, Social and Cultural Rights which takes place at Makerere University Main Hall, starting on the 15th to 16th of this month.

The session seeks to draw strategies for balancing tax and investment policies on one hand and human rights on the other for sustainable development and improved livelihoods.