MPs slap tax on bottled water, diapers

Ugandans will now, under the Excise Duty Amendment Bill, 2023, have to part with tax of Shs75 on every litre of bottled water or whichever is higher once the new tax legislation passed by Parliament yesterday comes into effect.

This is in addition to the current provision of 10 percent levy, which according to the State Minister of Finance in charge of Planning, Mr Amos Lugoloobi, is meant to close out possibilities of under-declaration by some manufacturers in the water industry.

Under the new tax plans, all diapers whether for adults or children will be taxed by the government. In passing of the Value Added Tax Amendment Bill 2023, Parliament threw out the government’s initial plan to exempt adult diapers from being taxed.

Before this proposal was thrown out, the Finance Committee Vice Chairperson, Ms Jane Pacutho, said: “As a Committee, we feel that there are a few categories of older persons, who use diapers and they are really for medical use. No adult person will really use diapers and therefore, we should limit this exemption to only adults. When we allow even for adults, so many people are going to use this and yet they are non-degradable.”

This was, however, objected by the shadow Minister for Finance, Mr Muwanga Kivumbi, who reasoned: “It defeats logic to rule that only adult diapers are treated as medical goods but not all diapers. We are aware that even children suffer from diarrhea and for medical reasons, they need diapers. So you can’t say diapers are an exclusive need for only adults. I know that in this country, some chairpersons of some political parties are fairly old and they may need adult diapers.”

A section of legislators feared that exempting adult diapers from taxation would benefit homosexuals.

“We just passed the [Anti-]Homosexuality Bill here, and you know for a fact that the biggest number of people who use diapers for adults are actually homosexual people. So, when you say diapers for adults, you are going to benefit, to a big extent, the homosexuals,” Ms Aisha Kabanda, the Woman MP for Butambala District, said.

It was later resolved that all diapers be taxed. Similarly, lawmakers rejected a committee report that sought to impose a 0.5 percent tax on every bank transaction such as withdrawal of cash, after Speaker Anita Among discovered that the said proposal had not been subjected to discussion from the requisite stakeholders such as those in the banking sector.

“Can you give me more clarity on how it smuggled itself into the Committee? Did you interact with the stakeholder and which stakeholders did you interact with? I am saying did you interact with the regulator, with bankers’ association, and regulator meaning Bank of Uganda?” Ms Among inquired, adding, “Can you delete that? Don’t smuggle in things anyhow. It isn’t anything for debate. We are going to investigate anything that hasn’t gone through the Speaker’s office or Parliament. We shall investigate this.”

By press time, plenary was still in session and had so far handled the Excise Duty Amendment Bill, 2023, the Value Added Tax (Amendment) Bill, 2023, and the Tax Procedures Code Amendment Bill, 2023.

On Tuesday, legislators voted to exempt salaries of staff at the office at the Directorate of Public Prosecution (DPP) from taxation. This exemption contained in the Income Tax Amendment Bill 2023, according to the DPP, Ms Jane Frances Abodo, translates into revenue loss of Shs6.8 billion per year. This is, however, contrary to the position of the Ministry of Finance that indicated government register a Shs7.5 billion annual loss of revenue.

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