Tax and tax and tax?

What you need to know:

  • With that resource envelop, the taxpayer could expect to receive good quality services, for instance, good roads health care services among others.

According to Benjamin Franklin, in 1789, nothing is certain except death and taxes. This statement is still relevant even today, and it can be traced to the tax and non-tax revenue systems in Uganda. 
Tax revenue and non-tax revenues are that the former is charged on income earned by an entity, which is a direct tax, and on the value of transaction of goods and services, which falls under the indirect tax. On the other hand, non-tax revenue is charged against services provided by the government.

The certainty is clear, but the tax burden is heavy and disturbing and it seems not to respond to the service regards of the “non-quid pro quo” especially during this time where everything is being taxed as a measure to increase the government resource envelop, currently, projected to amount to Shs 25,516 billion in FY2022/23. With that resource envelop, the taxpayer could expect to receive good quality services, for instance, good roads health care services among others. However, beyond the tax, the non-tax, for instance, fees attached on accessing a service in health and now road user charges on the Entebbe Express distorts the picture of tax and service and the question arising from that is where do the taxes we pay go?

Why Tax and Tax and Tax? We all know that Uganda does not manufacture its cars but assembles “Kiira” a step that deserves recognition. The country depends on imported cars and during importation, you are required to pay 25 per cent Import Duty, 18 per cent VAT, 6 per cent Withholding Tax, Excise duty of 10 per cent, 20 per cent Environmental Levy, 1.5 per cent Infrastructure Levy, and Car Registration Fee determined according to the Cost Insurance & Freight Tax Invoices, Year of Car Manufacture, and the Capacity of the Engine Consumption (the CCs).

In addition to that, after importation, you encounter the daily taxes depending on your fuel consumption at a rate of Shs 1450 per liter on petrol and Shs 1130 per liter for diesel according to the Excise Duty (Amendment) Act, 2021 Excise duty. The uncertainty around oil price globally has been exacerbated by the total liberalization of Uganda’s economy which needs to be checked.  
Furthermore, even though not everyone who owns a car will use the Entebbe Express Highway, the motorists are required to pay between Shs5,000 ($1.4) and Shs18,000 ($5) depending on the size of their vehicle. 

The asks are:
As we advocate for a mindset change in the National Development Plan III, the government needs to rethink and check on total liberalization of the economy and establish national fuel stations and means of transport to check on exploitation from profiteers.
Benchmarking is okay, for instance, road user charges but the government needs to align them with Uganda’s principles of taxation, but also ensure that services are enjoyed by everyone because they pay tax both directly or indirectly. 
                        Aloysious Kittengo ,                   

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