Treasury boss faults MPs over tax exemption
Ministry of Finance Planning & Economic Development PS Keith Muhakanizi
The Secretary to the Treasury, Mr Keith Muhakanizi, has said everyone, including Members of Parliament (MPs), should pay tax on their income.
Speaking during a press conference relayed live on NTV today, Mr Muhakanizi said this is in line with one of the many principles of taxation – equity.
“The first principle of taxation is the principle of equity. Therefore, if some people working in MTN or teachers in private or government [schools] are having their allowances taxed, it is not proper for some people, or for me, to use my position not to pay tax. All of us must pay taxes,” Mr Muhakanizi said.
He was responding to the concern by the Civil Society Budget Advocacy Group (CSBAG) coordinator Mr Julius Mukunda, who questioned why MPs are exempt from paying income tax on their allowances.
Their move came on the heels of a February judgment by Commercial Court, ordering the Parliamentary Commission to deduct Pay as You Earn (PAYE) from the MPs pay.
The court had been petitioned in December 2013 by Francis Byamugisha, a concerned citizen, who argued that it was illegal for MPs not to pay income tax on their allowances.
Following the commercial court’s February 2016 ruling, Parliament in February petitioned the Court of Appeal to overturn the commercial court’s decision.
With the Court of Appeal yet to dispose the matter, the MPs on April 14 night amended clauses of the Income Tax (Amendment) Bill, 2016 to exempt their allowances from taxation.
An MP earns a basic salary of Shs2.6 million per month, a subsistence allowance (Shs4.5m), constituency facilitation (Shs3.2m), town running allowance (Shs1m), gratuity (Shs1m), medical allowance (Shs0.5m), plenary sitting allowance (Shs150,000 per sitting) and a committee sitting allowance of Shs50,000 per sitting.
Following reports that the MPs would not pay tax on their income, some medical professionals said their allowances, too, should be exempted from taxation.
“If MPs can get the taxes on their allowances waived, a more important group is the health workers, should its allowances not taxed,” Dr Margaret Mungherera said during a press conference in Kampala.
There are now more calls by civil society groups and concerned citizens for the MPs to pay taxes.
It remains to be seen if the MPs will capitulate.
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