The Tax Justice Alliance Uganda has voiced its disagreement with several proposals outlined in the five tax amendment bills recently tabled before parliament as part of the 2024/2025 budget process.
These bills aim to increase tax revenue to offset declines in external assistance and address rising debt servicing levels and loan repayments.
Among the amendments proposed are measures in the Income Tax Amendment Bill, Excise Duty Amendment Bill, Value Added Tax Amendment Bill, Stamp Duty Tax Amendment Bill, and Tax Procedure Code Act Amendment Bill. These include taxation on non-business assets and tax exemptions on private equity and venture capital funds.
Mark Mutumba, a Tax Policy Analyst at SEATINI Uganda, acknowledged the potential for increased revenue collection but highlighted concerns about negative impacts on the economy. Civil society groups oppose the taxation of non-business assets, fearing it may discourage investment due to perceived additional costs.
Additionally, they raised concerns about ambiguity in the proposed amendments and unfairness between property owners in urban and rural areas. While the proposed tax exemption on private equity and venture capital funds is welcomed, concerns exist about potential misuse in the absence of regulations.
Civil society also recommended withdrawing proposals for tax exemptions on income from government securities and urged clarity on specialized investments like health facilities to ensure equitable benefits.
Proposed increases in excise duty on essential commodities like fuel and drinking water were criticized for potentially affecting livelihoods. Civil society proposed alternative measures, including curbing illicit financial flows and operationalizing the Mining and Mineral Act to increase tax revenues from artisanal miners.
Furthermore, they called for the expedited implementation of rationalization plans for government ministries, departments, and agencies to save costs and revising tax incentives to prevent revenue losses.
The Tax Justice Alliance condemned persistent supplementary budget requests by the government and advocated for measures to widen the tax base instead of deepening existing taxes.
Overall, the Alliance proposes alternative measures to cover revenue gaps while emphasizing the importance of equitable taxation and efficient government spending to foster economic growth and development.
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