Alcohol manufacturers petition Parliament over new tax
A section of MPs on the finance committee understudying documents related to the new tax bills. PHOTO | PARLIAMENT
What you need to know:
- Government through the finance ministry is proposing adjustments to the Income Tax Act, Stamp Duty Act, Tax Appeals Tribunal Act, Excise Duty Act, Value Added Tax, Tax Procedures Code Act, Tax Appeals Tribunal Act, Traffic and Road Safety Act and the Uganda Revenue Act.
The leadership of the Uganda Association of the Alcohol Manufacturers on Thursday asked the government to suspend the implementation of the most recent tax proposals on liquor, for at least one year.
In a petition submitted to the Parliamentary Committee on Finance, by the Vice Chairperson of the fraternity, Ms Juliana Kagwa, the alcohol makers reasoned that they need this allowance as a means of enabling their sector to recover from the shocks of the Covid-19 pandemic.
To further insulate her submission, Ms Kagwa told Parliament that operators within her umbrella body had, like other sectors, been subjected to national lockdown, which denied them clients, as bars remained closed for two years.
“We had an offline discussion with some of the policy makers and we informally agreed that we at least halt rates this year to allow our industry to recover. So the issue around proposed increases for this financial year, it is just untenable, there is no way we are going to to absorb this,” she told MPs.
This comes after a concerned citizen on Wednesday asked the same committee, chaired by Kiboga East County MP, Mr Keefa Kiwanuka, to scrap the Value Added Tax (VAT) that is currently levied on bread.
Government through the finance ministry is proposing adjustments to the Income Tax Act, Stamp Duty Act, Tax Appeals Tribunal Act, Excise Duty Act, Value Added Tax, Tax Procedures Code Act, Tax Appeals Tribunal Act, Traffic and Road Safety Act and the Uganda Revenue Act.
In the Excise Duty Amendment Bill 2020/22, there is a proposal to levy 100 per cent or impose Shs2500 on each litre of alcohol, which is higher on all undenatured alcohol manufactured from raw materials sourced outside Uganda.
"If even excise is increased, I don’t know what the price of an average bottle of beer or spirits in this country is going to look like. And the bigger risk around is that people will not stop consuming alcohol, they will continue, but they will continue consuming 75 per cent of the informal sector that is available and Uganda Revenue Authority cannot trace,” Ms Kagwa said.
This was, however, dismissed by the Budadiri West MP, Mr Nathan Nandala Mafabi, who indicated that the proposal ‘non-convincing’.
“From what you are speaking, you are coming here to threaten. This is how your threat is, if you increase, East African distillers will increase. I want to state that those who will be on high difference curve will drop and the spirit industry is Uganda Waragi. They have come to win a case, but this case can only be won when we are in the committee, but I want to tell you, for imported, we shall increase,” Mr Nandala said.
The finance committee, which has been scrutinising the tax Amendment Bills from the Ministry of Finance, is expected to conclude next week.
