MPs pass motion on comprehensive tax policy

Legislators have passed a motion urging government to develop a document that will be comprehensive on the taxation policy.

At a plenary sitting chaired by the Deputy Speaker, Thomas Tayebwa, on Thursday 05 May 2022, the Buyamba County MP, Gyaviira Ssemwanga, was concerned that the domestic revenue mobilisation strategy developed by the finance ministry in 2020 indicates that there is no documented taxation policy for Uganda.

“Government should develop and publicise a comprehensive taxation policy document for Uganda, based on the principals of good taxation,” he said.

Ssemwanga further noted that the Ministry of Finance, Planning and Economic Development (MOFPED) creates a framework to ensure effective implementation of the Domestic Revenue Mobilisation Strategy.

“The absence of a documented taxation policy leaves government with an unfettered discretion on what taxes to levy, what amounts, when to levy and on whom, which leads to an unfair taxation system,” he added.

The only option, the legislator added, was for government to develop the tax policy to save the country from over borrowing.

Hon. Dickson Kateshumbwa, (NRM, Sheema Municipality), said that the first tax legislation was in 1919 and since then, we have had tax laws that are not informed by the comprehensive tax policy.

“Taxation is the only practical means of raising revenue that finances goods and services that we all demand. Taxation is more than revenue – it is a tool for development,” he said.

Kateshumbwa, who prior to joining the 11th Parliament was a Commissioner for Domestic Taxes at the Uganda Revenue Authority (URA), added that everybody in government needed to take decisions on policy.

“We need to take decisions on tax matters following a policy not depending on a level of negotiation where someone approaches a certain office. This will help us achieve the principles that we need and also promote investment in this country,” he said.

Hon. Asuman Basalirwa, (JEEMA, Bugiri Municipality), said that a good law is usually preceded by a policy and the concern of the movers is that we have many laws of taxation that are hanging.

“We do not have a policy on tax exemptions in this country. You do not know who and how to access a tax exemption. The finance ministry should come up with a comprehensive evaluation of benefits of tax exemptions for the last 10 years and review the existing exemptions,” Basalirwa added.

Hon. Gilbert Olanya (FDC Kilak South County), noted that without the policy, the URA is taking advantage of the innocent citizens to overtax them.

The Mbarara City Woman Representative, Hon. Rita Atukwasa, noted that with the policy in place, government will not suffer with “bad decisions” like the contentious coffee deal with Uganda Vinci Coffee Company owned by Italian business woman, Enrica Pinetti.

“If we have a comprehensive tax policy then the discriminatory tendencies in taxation and weavers would be done away with. We could also run away from monopolies that are not good for the small business,” Atukwasa said.

The Opposition Chief Whip, Hon. John Baptist Nambeshe, noted that there is a government weakness of not implementing policies.

“There is a serious government weakness in implementing documents that are developed. Currently, we have the Domestic Revenue Mobilisation Strategy, which is very good, well documented but not implemented,” Nambeshe said.