Health, Finance clash over Shs9b tax on Covid-19 pick-up trucks

Sunday August 01 2021

Health Minister Dr Jane Ruth Aceng, State minister for Primary Healthcare Anifa Kawooya and Permanent Secretary Dr Diana Atwine appearing before the Parliamentary Covid-19 taskforce recently. PHOTO / ALEX ESAGALA

By Franklin Draku

Officials in the Ministry of Health have clashed with their counterparts in the the Finance ministry after the latter blocked tax exemption on 282 pick-up trucks procured using donated funds to boost Covid-19 response.
Two weeks ago, the Health ministry procured 282 double cabin pick-up trucks worth Shs23 billion from the donations and requested for a tax waiver amounting to Shs9 billion. The ministry argued that the vehicles were procured using donations.
The Finance ministry, however, insisted that all government procurements are subjected to taxes and that the people who did not plan for the taxes must be held accountable.
A source close to the latest quarrel over tax waiver told Sunday Monitor that the Ministry of Health officials have been keeping this money for almost a year and should have planned for taxes when they were making orders.
Senior officials in the Finance ministry warned government ministries, departments and agencies against attempting to fail revenue mobilisation strategies and talked of many imports that come into the country either as donations or grants but they always put their tax obligation managements in place before shipments.
While appearing before the Parliamentary Covid-19 Taskforce this week, both the Health minister, Dr Ruth Aceng, and the Permanent Secretary in the Health ministry, Dr Diana Atwine, made passionate pleas to the legislators to intervene so that the ministry gets a tax waiver.  They said they do not have the Shs9b for taxes.
URA writes to Health ministry
On July 6, the commissioner of customs at Uganda Revenue Authority (URA) wrote to the Health ministry asking them to send their licensed clearing agent to have the vehicle cleared before they are transferred to the government.
Mr Abel Kgumire, in his letter, directed that the ministry should first transfer the vehicles from the donors before they are cleared.
“Please have your licensed clearing agent get in touch with the manager customs documenting process centre – URA, who will facilitate clearance as indicated in our letter above. You will be required to transfer the said vehicles from the donors to yourselves prior to clearance through customs,” Mr Kagumire said.
Prior to the latest altercations, the three entities; Finance ministry and that of Health, together with URA, held several meetings in which they agreed that government would pay taxes on the vehicles and transfer them to government before clearance.
It is not clear why the Health ministry is insisting on tax waivers when the Finance ministry had indicated that there would be money available to the Health ministry to pay the taxes.
Finance ministry responds
Mr Jim Mugunga, the Ministry of Finance spokesperson, told Sunday Monitor that accounting officers are aware that donations are not tax exempt and that the minister has no powers to grant exemptions. He said the Ministry of Health should have known this better and planned for the taxes when they were procuring the vehicles.