Deadlock as MPs maintain stance on tax exemptions

Kampala.

Members of Parliament have maintained the push for a tax exemption on their allowances, claiming any further cuts would be burdensome.

The matter on tax exemption of MPs, categorised among the country’s highest paid, remains debatable and has seen the Parliamentary Commission oppose amendments to the Income Tax (amendment) Bill, 2016, which President Museveni refused to assent.

While appearing before the Parliamentary Committee on Finance, commissioners Peter Ogwang (NRM–Usuk County) and Arinaitwe Rwakajara (Workers) said the commission will not allow any amendments aimed at imposing taxes on MPs’ allowances since they pay monthly taxes of more than Shs3 million each.

“A Member of Parliament is entitled to annual gratuity which is taxed by 30 per cent in addition to our monthly tax dues,” Mr Ogwang said, adding that it would be a burden if members are taxed on every little bit of their earnings.

“We request that the Bill be returned to the President to help us exempt taxes on facilitation which is mainly fuel. At least help us with facilitation particularly transport,” he said.

The 9th Parliament proposed amendments to Section 21(1) of the Income Tax (Amendment) Bill, 2016, to exempt members from having their allowances taxed.

However, President Museveni upon hearing the public outcry on the proposed exemptions on allowances, refused to ascend to the Bill in May and returned it to Parliament.

The President while recommitting the Bill, said it was not “morally upright” for leaders to send a bad image to the public.

Some MPs expressed worry and asked if the Shs100 million paid in partial support for cars is also being taxed.
The committee chairperson, Mr Henry Musasizi (NRM_Rubanda East), said there was little left for the committee to do since the Parliamentary Commission made its position.
“Since the rejected Bill has now been formally tabled, I think Parliament will quickly ascertain its position,” Mr Musasizi said.

Meanwhile, Mr David Bahati, the State Minister for Planning, asked the committee for more time to study their decision.

According to Civil Society Budget Advocacy Group (CSBAG), Ugandans risk losing more than Shs40 billion if the amendment is adopted.

However, Mr Rwakajara said Parliament pays billions of shillings in taxes monthly and that the estimates by CSBAG are only a reflection of the burden to be suffered by MPs in case the exemptions are blocked.