Parliament approved the Excise Duty Amendment Bill 2024, introducing new levies while rejecting certain proposed taxes, sparking debates over the impact on various sectors of society.
The approved bill includes a notable increase in excise duty rates. The levy on fuel has been raised to Shs1550 per litre, a move supported by Bosco Okiror (Usuk County), contingent on the funds being dedicated to road construction and maintenance nationwide. Okiror emphasized the importance of ensuring tangible benefits for taxpayers through infrastructure improvements.
“The impact that our voters want to feel is that we should be able to ringfence and put this in our infrastructure. I would suggest the increment of this tax, but let it go towards having the deliverable. Let Ugandans feels that the tax has been increased but it is addressing the issue of their roads.” He said
Additionally, a tax of Shs.500 per 50 kg has been imposed on lime, adhesive, and grout. Mineral water will now be subject to a fixed rate of Shs50 per litre under the amended legislation.
However, the proposal to impose a Shs300 levy per litre of kerosene was met with strong opposition from MPs. They argued that many rural households rely on kerosene due to limited access to electricity, and any additional charge would disproportionately affect low-income individuals. Anita Among, the Speaker of Parliament, defended the decision, highlighting the necessity of considering the impact on vulnerable populations.
“When you look at fuel, the increase is Shs100, but when you look at kerosene where there are so many people using, you are increasing it by Shs300. What mathematics was that? What was the basis of that increment? Since we removed Rural Electrification Agency, electricity has failed to reach the villages, we are removing kerosene, it affects the local person, who can’t afford to fuel a car.” He stated
The bill also includes a 0.5% levy on cash withdrawals from payment systems, with the exclusion of agency banking to promote financial inclusion efforts. Newer payment platforms such as Chippa cash and Wave will be subject to this levy.
Notably, MPs rejected several proposals during the deliberations. Nandala Mafabi (Budadiri West) advocated for a more modest increase in the fuel levy, questioning the basis for the proposed hike. Mafabi argued against continuous tax increments, suggesting alternative strategies to spur economic growth without burdening taxpayers.
“I want to plead with Government, for the first time say we aren’t increasing taxes on fuel and see what will happen. I can tell you, the country will not collapse and there will be more income to tax,” Mafabi said
Overall, the passage of the Excise Duty Amendment Bill 2024 reflects a balance between revenue generation and considerations for socio-economic impacts.
The implementation of these amendments will be closely monitored as stakeholders assess their implications on various sectors and the broader economy.
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