Opposition wants government to expand tax base

Parliament in a past session. The opposition wants government to widen the tax base. FILE PHOTO

What you need to know:

  • The opposition also suggests that the government should provide limited tax shelters for small-scale informal activity and allow businesses to formalize by using simple ‘off the shelf’ models.
  • Other challenges highlighted include; tax evasion and avoidance practices, administrative challenges within Uganda Revenue Authority, limited capacity of local governments to identify and collect revenues, poor record keeping at local governments in respect to taxpayers as well as the low spirit of voluntary compliance among tax payers.
  • The opposition also wants the government to ensure consistency in aligning annual budget to the national development plan to adhere to commitments such as agriculture and tourism.
  • They further want supplementary requests to come to parliament for approval before expenditures are made, at least four months before the schedule is presented to parliament.

The opposition has asked government to expand its tax base through compulsory registration of businesses in the country.
In the Alternative Policy Statement submitted to Parliament on March 23, Mr Anthony Akol, the shadow minister for Finance, Planning and Economic Development has stated that the government has failed to expand its tax base.
“Expand the size of the population in gainful business and employment and bring them into the tax bracket by compulsory registration of their businesses,” Mr Akol’s statement reads in part.

His statement was presented to the Parliamentary committee on Finance by Kasese Municipality MP Robert Centenary, the shadow minister for Tourism, Wild Life and Antiquities.
The lawmaker wants the government to tap into the informal sector for taxation by formulating and implementing policies that allow self-employed people and small businesses to formalize their businesses easily.
The opposition also suggests that the government should provide limited tax shelters for small-scale informal activity and allow businesses to formalize by using simple ‘off the shelf’ models.

According to the Opposition, the country is faced with poor domestic revenue mobilization and that despite efforts by government, a number of challenges prevail.
They cite, among others; a large informal sector that contributes 43 per cent of GDP, a narrow tax base composed of a few tax payers, a tax regime riddled by exemptions and weaknesses in tax administration.
Other challenges highlighted include; tax evasion and avoidance practices, administrative challenges within Uganda Revenue Authority, limited capacity of local governments to identify and collect revenues, poor record keeping at local governments in respect to taxpayers as well as the low spirit of voluntary compliance among tax payers.

They add that debates around taxation are not widespread and rarely involve citizens.
In addition to widening the tax base, the opposition wants the government to check its use of public funds.
They, for instance, ask the government to revisit the regulations for approving and appropriating supplementary budgets.

This, they say, will reduce what they define as indiscipline and loop holes within the Public Finance Management Act of 2015.
“Given that the law in its current form only empowers the House to approve supplementary expenditure after use by responsible MDAs, there is gross financial indiscipline on the part of Ministries, Departments and Agencies and the people who release the money to the agencies, by allowing the release of supplementary expenditures which does not meet the requirements,” said Centenary.

When regulations are amended, Mr Centenary said, it will be easy for parliament to approve the supplementary budgets to enable government to acquire operational funds in cases of emergencies.

The opposition also wants the government to ensure consistency in aligning annual budget to the national development plan to adhere to commitments such as agriculture and tourism.
They further want supplementary requests to come to parliament for approval before expenditures are made, at least four months before the schedule is presented to parliament.

Regarding economic empowerment of the citizenry, the opposition suggest that there should be Focus on establishing irrigation schemes in different parts of the country; to promote and spearhead sustainable agriculture production in the country.
With this, the challenges of drought that leads to poverty shall be overcome as well as climate change.

Mitooma District woman MP, Jovah Kamateeka (NRM) lauded the opposition for its policy recommendations and urged them to always tow a complementary path rather than radical resistance.
There was no debate in the matter since only Ms Kamateeka and Mr Hatwib Katoto (NRM Katerera County) and the chairperson were present out of over 20 members.