Prosecutors want income tax exemption

The Director of Public Prosecution (DPP), Ms Jane Frances Abodo, has asked lawmakers on the Finance Committee to amend Section 21 (1) (q) of the Income Tax Act so that her staff salaries are exempted from taxation. 
In her defense made before the House committee that is currently processing Tax Bills for the incoming Financial Year that commences on July 1, Ms Abodo reasons that this will motivate her staff to work more diligently like their counterparts in the Judiciary whose salaries are exempted from taxation.
Ms Abodo indicated that due to the selective application of the tax exemption on government officers in justice system is affecting her office. And due to this, her office is largely losing majority of the experienced staff to the judiciary, which in the end affects service delivery.
“The rate of staff turnover at the DPP is high. Every single year, the office loses a big number of staff to other institutions especially the Judiciary because of the tax incentive. The staff we lose to the Judiciary, private practices and other agencies with better emoluments leave with very high skills accumulated over time that cannot easily be replaced hence leaving the DPP in a state of stagnation over time,” Ms Abodo said.
Prior to the appeal made before Parliament on Tuesday, the DPP revelaed that her team had engaged President Museveni on the same matter who then directed the Ministry of Finance to act on it but to the dismay of the DPP, this was never effected.
According to documents laid before the committee, it is indicated that on August 15, 2022, President Museveni directed the Ministry of Finance to effect the proposal.
“I agreed to the request because of the nature of their work is risky and greatly contributes to the stability of the country," President Museveni letter reads in part.
Ms Abodo, however, indicated that if the directive is to be implemented, the exemption would mean that taxman, Uganda Revenue Authority (URA) loses at Shs6.8 billion. This differs from the position from the Ministry of Finance that warned that the implementation of the said directive would cost government a Shs7.5 billion annual loss.
“Government has already granted many tax exemptions in the various tax laws and there is no fiscal space to grant further exemptions because exemptions lead to loss of revenue to Government. Our analysis show that exempting the income of state prosecutors alone would lead to an additional loss of /revenue amounting to Shs7.5b annually at the current wage and the number of employees," Finance Minister Mr Matia Kasaija said in letter dated January 6, 2023.
The suggestion was, however, objected by the Kabula County legislator, Mr Enos Asiimwe, who reasoned that whereas the government denies some entities like the DPP office the said exemptions but instead goes ahead and allows the same privilege to be enjoyed by huge business firms.
“The unfortunate bit is that yes your money is very small, Shs6.8b which they should have given to you. But the problem is that the Ministry of Finance will deny you the exemption, and give it to someone else in billions. That is why we are passing a blanket opinion that we shouldn’t issue any more exemptions," Mr Asiimwe said.
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