What you need to know:
Impact. The high taxes have affected uptake negatively.
Kampala. Funeral homes have called on government to waive taxes on funeral management equipment to enable them boost their services and in turn pass on affordable prices to the public.
Speaking to the media at the A-Plus-managed Mengo Funeral Palour in Kampala recently, A-Plus Group chief executive officer Ronald Zake said: “High taxes have pushed away potential customers as the cost of service is passed on to the final consumer in form of high charges.”
He argued that most people that lose their loved ones are always in grief and by the time they move to take up the services of funeral homes, they are already in financial distress after spending on medical bills.
“It is at this critical time that people need affordable services to see them through moments of anguish,” he said.
Mr Zake said tax exemption on funeral management services will enable service providers to boost their business and expand to other regions across the country.
A-Plus Funeral Management plans to inject Sh1b in an expansion drive this year to set up funeral homes in Mbarara, Fort Portal, Gulu and Tororo and offer mortuary management services.
Mr Zake also revealed that Memoranda of Understanding (MoU) have been signed with St Anthony Hospital in Tororo, Lacor Hospital in Gulu and Kabarole Hospital in Fort Portal to take their services nearer to the people.
Insurers have since the re-instating of the 18 per cent Value Added Tax (VAT) on insurance services, increment of stamp duty and raising withholding tax in the 2013/14 national budget, been asking government to review these taxes but their pleas have fallen on deaf ears. This has continued to affect the industry more so the funeral insurance that is still in infancy.
Government, for instance, re-instated the 18 per cent VAT on insurance services, increased stamp duty from Shs35,000 to Shs50,000, and raised withholding tax from 5 per cent to 10 per cent, which insurers say increased the cost of insurance services.
Lion Assurance managing director Newton Jazire said the so many taxes on insurance services have forced some potential insurance services consumers to refrain from buying them due to increased costs.
The taxes saw the insurance industry post a modest growth of 6.9 per cent growth in 2014, compared to the 31 per cent growth posted in 2013, prior to the re-introduction and upward revision of taxes.
Mr Ibrahim Kaddunabbi Lubega, the chief executive officer Insurance Regulatory Authority, said insurance industry players need to come up with a good case which can be put forward to Uganda Revenue Authority and government for review if they want to be exempted.
“If the case is good, then the funeral insurance service providers can be exempted,” he said.
A-Plus operates a funeral parlour in Kampala where it provides services including modern body storage, embalmment, post-mortem, dressing, caskets and international repatriations, among others.
Body storage costs Shs30,000 for the first day, and thereafter Shs10,000 each successive day.
Vehicles imported for use in funeral business are tax exempt since they are categorised as ambulances, but technology applied in cold rooms, imported caskets and other related equipment still attract taxes like import duty and VAT.