Spare a thought for income-tax payers

It is increasingly becoming apparent that the fiscal statement for the current financial year was anything but progressive. What with revelations that the Finance ministry green-lit nearly Shs3 trillion in tax exemptions while fiscally squeezing the working people. 

A number of entities could well have lined up their pockets by getting tax reliefs and incentives as the squeezed middle helped the government collect a pay-as-you-earn (PAYE) tax surplus of Shs225.8 billion. Such is the convoluted nature of beneficiaries of the tax exemptions, credits, and deferrals that the Finance ministry was intent on keeping its cards close to the chest. 

Following deep mistrust expressed by lawmakers, some of it is conscious, some subliminal, Speaker Anita Among moved to compel the Treasury to furnish the House with the list of beneficiaries.  If the deepest fears of many are crystallised insofar as confirming a let-off for the wealthy while ordinary people shoulder a rising—even crippling—tax burden is concerned, this will be rather unfortunate. Tax regimes in a democratic government are supposed to rest on the doctrine that all subjects are equal before the law. While some observers have likened it to a hybrid regime, Uganda fancies itself as a democracy.

While delivering the fiscal statement for the 2022/2023 fiscal year, the country’s Finance minister vowed to insulate people from the cost of living crisis. Mr Matia Kasaija also, for good measure, promised to jump-start the economy to reverse the decline in living standards.  What we have instead ended up with is an almighty revenue-raising squeeze on the living standards of the many millions in the middle. While the possibility of modest increases in personal taxes on the wealthy rests on a cornerstone of conjecture, there is blanket certainty that thousands of their entities have been spared trillions of shillings in taxes.

The business case summarily made is couched in trickle-down economics. There is, however, a rich body of evidence that suggests tax incentives do not necessarily translate into a telling increase in jobs. We are not only alive to this fact, but also join the House in demanding change.

We should move to peel away the shroud of secrecy around beneficiaries of tax reliefs and incentives. A value-for-money audit must take centre-stage. If it brings what many reckon is a terrible secret into plain view, the perpetrators should be brought to book.  
Above all, the Treasury should spare a thought for the squeezed middle. 

The responsible authorities should do more than pay lip service to reining in financial mismanagement. The doctrine of small government should be actualised sooner than later. If there is intent to widen—as opposed to deepen—the tax base, is it not paradoxical then that different sets of government employees keep being yanked out of the income tax bands? Prosecutors are the latest to be taken off the shrinking list of income-tax payers. A lot of soul searching has to take place to give the squeezed middle reasons to be hopeful.