URA slaps tax on scholastic materials

Donation. Pupils receive books from cooperate companies recently. Such scholastic materials will now be taxed. FILE PHOTO

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"If government’s belief is that universal education aims at enabling children to go to school and actually complete, then we should make scholastic materials as affordable as possible,” Mr William Okello, the Uganda Manufacturers Association paper section chairman

No tax. Previously, scholastic materials and paper importation have been VAT free.

KAMPALA. Paper manufacturers have protested a move by Uganda Revenue Authority (URA) to slap 18 per cent Value Added Tax (VAT) on scholastic materials, saying the move will further escalate the cost of education.

Mr William Okello, the Uganda Manufacturers Association paper section chairman, told Daily Monitor that URA officials have directed them to start remitting 18 per cent VAT on scholastic materials with exception of those supplied directly to educational institutions and public libraries starting next month.

“We would like URA not to impose VAT on scholastic materials. If you say we can be VAT exempted only if we supply educational institutions and libraries directly, that is wrong.

Even if we supplied them (educational institutions and avoid VAT) it is none of schools business to sell these scholastic materials to children,” Mr Okello said.

Scholastic materials have been VAT free and even paper importation by the said manufacturers is not taxed by URA.

“Schools are due it open for the First Term, should URA position on the matter stand, the cost of scholastic materials shall increase by 18 per cent which may cause dropping out of children [whose parents/guardians are poor],” Mr Okello added.

Mr Ian Rumanyika, the URA manager for public and corporate affairs, he will give “a comprehensive response today.”
Mr Patrick Kaboyo, the chairperson of Private Schools in Uganda, said everyone should pay tax if they make a profit.

“Issues of tax are a concern to the education sector but there are people who want to evade tax. If you are making a profit, you should pay tax and if exempted, show evidence,” Mr Kaboyo said by telephone yesterday.
URA closed its 2016/2017 account with a deficit of nearly Shs460 billion.

The shortfall recorded is about four times the budget allocated to the Ministry of Trade, Industry and Cooperatives combined and slightly more than half of the budget given to the Agriculture docket, a sector that supports livelihood of majority of the population.