A section of lawmakers have rejected pleas by members of Uganda Manufacturers Association not to implement excise duty on imported spirits saying Uganda has been losing over Shs7.7Trn in tax exemptions and our economy can’t withstand more exemptions.
The Ministry of Finance has proposed amendments in the Excise Duty Amendment Bill 2022 to increase excise duty on imported spirits from 80% to 100% or Shs2500 per litre whichever is higher of alcoholic strength by volume less than 80%, but UMA members want the rate maintained at 80%.
While interacting with MPs on Friday,Daniel Birungi, Executive Director UMA defended the position arguing that in addition to the Covid-19 pandemic, the alcohol industry is currently grappling with the unprecedented increase in illicit alcohol production.
The Manufacturers also asked Parliament to lower the threshold for local investors to benefit from income tax exemption from the proposed US$5million to US$2 Million and US$35 Million to US$10 Million in order to allow movement of investment.
However, the proposal received mixed reactions from lawmakers like Butambala County MP Muwanga Kivumbi who questioned why the manufactures are only asking for exemptions and none is making proposals on how to raise government revenue.
He pointed out that currently, Uganda is losing Shs7.7Trn in tax exemptions, calling on the manufacturers to shoulder the inflation crisis in the country because the pandemic alluded to hasn’t spared peasants.
Pakwach district woman mp Jane Pacuto called on manufactures not to only look at tax exemptions but rather lowering cost of capital.
Deo Kayemba, Chairperson Uganda Manufacturers Association however fired back at the MPs arguing that Government hasn’t supported local manufacturers to start businesses but the tax exemptions have all been gifted to local manufacturers.
The Manufactures also opposed the proposal by Government amending section 58 of the Tax Procedures Act to fine taxpayers who make false or misleading statements to be fined to a tune of Shs110M up from the current Shs40 Million, saying these should be dealt with when it comes to notices in compliance.
The manufactures also rejected the Shs110M for offences like failure to affix or activate tax stamps, prints over or defacing tax stamps, forgery of tax stamps or forgery of electronic receipting or invoicing and instead want Shs4M for first time offenders, Shs8 Million for second time offenders and Shs10m for third time offenders.
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