'Subject tax exemption for MPs to a referendum'

Executive Director Food Rights Alliance  Agnes Kirabo, Coordinator of the Civil Society Budget Advocacy Group Julius Mukunda and the Programme office SEATIN Uganda Nelly Mugisha at a news conference. Photo by Wilfred Sanya

The decision for Members of Parliament (MP) to grant themselves tax exemption is injurious to revenue collection and affects the economy, a civil society group has said.

The Coordinator of the Civil Society Budget Advocacy Group, Julius Mukunda, has said that a referendum should be held on the matter before the President signs the Income Tax Amendment Bill 2016 into law.

Mukunda made the remarks at a news conference in Kampala.

Lawmakers across a usually fractious political divide in April this year passed the Bill and introduced a section that removes their allowances from the tax bracket.

The amendment was proposed by Rubanda County MP, Henry Musasizi. Only 40 MPs were in the House.

Parliament passed the Income Tax (Amendment) Bill 2016 and decided to amend Section 21 (1) of the Income Tax Act, Cap 340, to exempt the employment income of members of Parliament, except salary, a decision that provoked public outrage.

The development came barely two months after Justice Henry Adonyo of the Commercial Court ordered that MPs' allowances, including mileage and constituency allowances, sitting allowances for committee sessions, town running allowances, basic pay and car purchase allowances, among others to be taxed.

 The Secretary to the treasury, Keith Muhakanizi blasted MPs. According to Muhakanizi, the MP's move is likely to hemorrhage URA collections by at least sh41.58b annually.