Tax Justice Alliance Uganda Submits Position Paper on Tax Amendment Bills to Parliamentary Committee

Ugandan civil society opposes proposed tax measures, citing concerns over investment, essential commodities, and marginalized groups. They suggest alternatives like curbing illicit flows and rationalizing government agencies.

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Israel Ojoko
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Tax Justice Alliance Uganda Submits Position Paper on Tax Amendment Bills to Parliamentary Committee

Tax Justice Alliance Uganda Submits Position Paper on Tax Amendment Bills to Parliamentary Committee

The Tax Justice Alliance Uganda has submitted a Position Paper on Tax Amendment Bills for the Fiscal Year 2024/25 to the Parliamentary Committee on Finance for consideration.

The Position Paper outlines the organization's recommendations and concerns regarding the proposed tax amendments, aiming to provide input and influence the decision-making process on tax policies and reforms in Uganda for the upcoming fiscal year.

The Ugandan government is facing a cash crunch and needs to raise an additional UGX 5.64 trillion (USD 1.48 billion) to fund its UGX 58.3 trillion (USD 15.3 billion) budget for the fiscal year 2024/25. To generate more revenue, the government has proposed several novel tax bills, including a 5% tax on gains from the sale of non-business assets and a requirement for employers to account for 18% VAT on goods or services provided to employees.

However, the business community in Uganda has been protesting these new tax measures, claiming they will hurt investment and economic activities. Traders have also been staging nationwide strikes against the high costs of implementing the Electronic Fiscal Receipting and Invoicing System.

Why this matters: The proposed tax amendments have significant implications for Uganda's economy and the livelihoods of its citizens. The government's efforts to increase tax revenue to fund its budget have faced strong opposition from taxpayers, highlighting the need for a balanced and equitable tax system that supports economic growth and development.

In the Position Paper, the Tax Justice Alliance Uganda expresses disagreement with most of the proposals in the five tax amendment bills. The civil society group raises concerns about specific proposals, such as the taxation of non-business assets, the lack of regulations for private equity and venture capital funds, and the increase in excise duty on essential commodities. They argue that the introduction of a 5% tax charge on the proceeds of the disposal of non-business assets, including land, creates ambiguity in implementation and interpretation, and could deter investment and further burden marginalized groups.

The group also opposes the proposed treatment of rental property as a non-business asset, stating that the 15-day timeline for tax payments is unrealistic and creates additional burdens for taxpayers. They welcome the proposed tax exemption on private equity and venture capital funds but emphasize the need for proper regulations to prevent misuse and revenue leakages.

As a substitute for the proposed measures, the Tax Justice Alliance Uganda suggests curbing illicit financial flows, operationalizing the Mining and Mineral Act 2022, and implementing the rationalization of government ministries and agencies to save money. They urge the government to address issues of illicit financial flows, enhance tax education, and conduct robust impact assessments before implementing tax proposals to mitigate negative impacts on the economy.

The Position Paper submitted by the Tax Justice Alliance Uganda highlights the concerns and recommendations of civil society organizations regarding the proposed tax amendment bills for the fiscal year 2024/25. The group emphasizes the need for a balanced and equitable tax system that supports economic growth and development in Uganda while mitigating the potential negative impacts on investment, essential commodities, and marginalized groups.

Key Takeaways

  • Tax Justice Alliance Uganda submitted tax amendment recommendations to Parliament.
  • Uganda govt proposes new taxes to raise $1.48B for 2024/25 budget.
  • Proposed taxes on non-business assets and VAT on employee benefits opposed.
  • Civil society urges curbing illicit flows, mining act implementation, and agency rationalization.
  • Calls for balanced tax system to support growth, mitigate negative impacts.