Govt anomalies fail House plan to process new taxes
L-R: Minister of State for Finance, (General Duties), Henry Musasizi and State Minister for Finance (planning), Amos Lugolobi before Parliament’s Finance committee on April 2, 2024. PHOTO | DAVID LUBOWA
What you need to know:
- After Minister of State for Finance, Planning and Economic Development (General Duties) Henry Musasizi tabled the said Bills in March, it was revealed that at least Shs1.9 trillion would be raised through the new tax laws, something Mr Ssemujju objected, adding that this could form part of the reason why the said Bills were devoid of the requisite documents.
Parliament on Friday failed to make final deliberations on the government’s five Tax Bills and determine fresh taxes to be implemented by the Uganda Revenue Authority (URA) in the Fiscal Year (FY) 2024/2025.
The plenary sitting steered by Speaker Anita Among hit a snag after Mr Joel Ssenyonyi, the Leader of Opposition (LoP), amplified anomalies noted by the Shadow Finance Minister Ibrahim Ssemujju Nganda and tax expert Nathan Nandala Mafabi (Budadiri West). The three arrested irregularities that contravened procedural sections stipulated in Section 76 of Public Finance Management Act.
The Bills that were meant to be processed, include the Excise Duty Amendment Bill, 2024, Tax Procedures Code Amendment Bill,2024, Stamp Duty Amendment Bill, 2024, Value Added Tax Amendment Bill, 2024, and Income Tax Amendment Bill, 2024.
Acting on the alerts highlighted in two reports of the Value Added Tax (VAT), LoP Ssenyonyi rallied Speaker Among to marshal the House into shutting down a debate meant to open discussions on all the five Tax Bills. The proposed legislation is meant to define the taxes to be collected by URA in FY 2024/2025.
“In essence, this is defective and both reports do agree. We need to be smart and organised, even legally. The minister should withdraw the Bill, go back, put his house in order and then we comply with the law,” LoP Ssenyonyi said.
Speaker Among thanked the LoP for illuminating the “legal issue with [the] financial certificate of financial implication on the tax Bills.”
The government was given up to Monday to bring its house in order. The majority report tabled by the Parliamentary Committee on Finance captured the scale of work that needs to be done.
“While the committee received briefs on the proposed tax amendments in the Bill, there were no research reports availed to the committee. The briefs do not highlight the cost of implementation, the yield in terms of revenue and the general impact on the economy,” the VAT report tabled by Chairperson of the Finance Committee Amos Kankunda read in part.
It added: “Majority of the tax law amendments are not informed by tax related analytical briefs; and weak partnerships between the Tax Policy Department in the Ministry of Finance Planning and Economic Development (MFPED) and URA. This undermines evidence-based tax development mechanisms.”
After Minister of State for Finance, Planning and Economic Development (General Duties) Henry Musasizi tabled the said Bills in March, it was revealed that at least Shs1.9 trillion would be raised through the new tax laws, something Mr Ssemujju objected, adding that this could form part of the reason why the said Bills were devoid of the requisite documents.
Mr Mafabi reasoned that the missing tax policy and research as required by law would have partially offered insight on how governments implement the levy, let alone the advantages of collecting the said taxes.
“The reason we are asking for the tax policy is because taxes must be predictable. If they are not predictable, you can see why people are striking. It is because they are not so sure. There could be a good tax, but if you have not told people...,” Mr Mafabi said.
