Government cuts taxi fees by half

Kampala. The government has reduced taxi fees by almost half and ordered that all the money be collected directly by Uganda Revenue Authority (URA).

The decision to be implemented in the next financial year was passed during a Cabinet meeting at State House, Entebbe on Monday. The meeting was chaired by President Museveni.

The State Minister for Local Government, Ms Jennipher Namuyangu, yesterday said the decision is intended to harmonise taxation system of Kampala Capital City Authority (KCCA) and other local governments, stop multiple taxation, have daily levies on taxis and come up with one consolidated fee for taxis on one specific route.

“Transport Licensing Board will have to issue PSV (Passenger Service Van) licence stickers to all drivers who will have cleared their levies to zero. They will only be required to pay the revenues in the commercial banks via the URA payment portal only,” she told journalists at the Uganda Media Centre in Kampala.

“Each taxi shall pay Shs840,000 per annum, to be shared between the original/ designation local government and KCCA at the ratio of 40:60 respectively. Town service exclusively plying within KCCA shall pay Shs720,000, taxis plying between two urban areas shall pay Shs840,000 and buses will pay Shs2.4m…,” she added.

Currently, a taxi driver operating on Entebbe Road pays a monthly Shs120,000 to KCCA as tax, Shs80,000 monthly fee to each of the three urban authorities of Ssabagabo, Katabi and Entebbe on the route and Shs580,000 in form of income tax and PSV licence a year.

This means that they have been paying up to Shs3m per year. Going onwards, the taxi operators will be parting with Shs840,000 per year as tax and Shs580,000 per annum as income tax, totalling to Shs1.4m per year.

Mr Rashid Kagimu, a taxi driver plying the Ntinda route through Kamwokya, said the new levy would be fair to them because they only have to pay to one central pool and not at different stages.

“Imagine if you have to pay at three or four stages, this money has never been accounted for. We have been paying too much but it ends up in a few people’s pockets,” he said.

In February this year, the taxi operators protested the Shs80,000 monthly levy on each taxi by the Ministry of Local Government operating in the district and urban authorities.
President Museveni later stopped the levying of multiple taxes on taxis and ordered the Local Government minister and urban authorities to set new guidelines and enforce them.

Government also tasked URA to configure e-tax system to be ready to receive payments from more than 340,000 taxis.
“URA has to share performance reports on revenue collected on a monthly basis, with the office of Accountant General and the Ministry of Local Government from all the collected monies,” Ms Namuyangu said.
The levies were also slashed by 65 per cent from Shs2.4m to Shs840,000.

President Museveni’s past directives
In April, President Museveni issued a new directive on fees to be paid by commuter taxi operators, as an amendment to the one he issued in November last year.
Taxis plying Kampala roads or operating within 21 kilometres from Kampala were to pay Shs720,000 while those operating long distances on upcountry routes would pay Shs840,000 per year.

The directive was a win for Kampala drivers whose fee had only gone up by only Shs20,000. For taxis plying long routes, the fee had gone up from Shs500,000, a figure that Mr Museveni had set in November to Shs840,000 . The changes meant that a taxi operating from Masaka to Kampala, Masaka to Mbarara or Jinja to Kampala would pay Shs840,000 annually.

In November last year, the President ordered a reduction of Kampala commuter taxis fees from Shs1.44 million to Shs700,000 and capped the fees of commuter taxis operating outside Kampala at Shs500,000. This directive was supposed to be effected starting January 1, 2018.

However, both KCCA and Ministry of Local Government went back to the President protesting the reduction.
KCCA Director for Revenue Fred Andema said they had asked the President to rescind the November directive and let Kampala taxis pay Shs120,000 per month.

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