Civil society position on tax revenue measures for FY 2017/18
SEATINI-UG alongside members of the Tax Justice Alliance including, Oxfam, Civil Society Budget Advocacy Group (CSBAG),Uganda Debt Network(UDN), Action Aid Uganda (AAIU), Citizens Watch-Information Technology (CEW-IT), Women and Girl Child Development Association (WEGCDA) and Inter University Tax Justice Forum, issued a press statement at SEATINI Uganda offices in Kampala this 21st April 2017 to present observations and recommendations in respect to the tax measures that were presented to Parliament.
SEATINI-UG with other CSO members holding a press conference on 21/04/2017.
The Minister of Finance Planning and Economic Development developed and presented the tax revenue measures for FY 2017/18 contained in the Excise Duty (Amendment) Bill 2017, Value Added Tax (Amendment) Bill 2017, The Income Tax (Amendment) Bill 2017 and the Tax Procedures codes Bill, 2017. For the first time, we have observed that the bills were submitted along with certificates of financial implication, a practice that we commend.
As of half year of the FY2016/17, Uganda has revenue shortfall of UGX 166.44bn partly coming from the customs shortfall of UGX 206.58bn and an offset from the domestic side over performance of UGX 40.14bn. Tax revenue for the FY2017/18 is projected to be UGX 14,682bn. (87.9% of total revenue and grants – 16,698bn) which is 16.9% increase from the FY2016/7 estimates. Uganda Revenue Authority collections for 2017/18 are targeted at about 14.5trillion. This will need concerted efforts from all entities in Uganda including citizens.
Among the proposals, CSOs welcomed the following tax proposals to improve revenue collection and facilitate investment in the FY 2017/18 and beyond including; An increase of Excise Duty from UGX50, 000 to 55,000 per 1000 sticks (soft cup) for cigarettes will increase revenue, 60% proposed tax on malt beer or 1860 per litre, whichever is higher under the excise duty (amendment) bill, lotteries and Gaming Act, 2016, the inclusion of another categorization for the fruit juice and vegetable juice, except juice made from at least 30% of pulp from fruit and vegetables grown in Uganda will encourage our home industries and strengthen the Buy Uganda Build Uganda policy as well as boost the agriculture sector, withholding tax rate applicable to winnings from sports betting and pool betting of 15% is commendable, increase on imported furniture and furniture assembled in Uganda from 10% in FY2016/17 to 20% FY2017/18 to encourage local production.
However there were a number of concerns raised by the CSOs. Among them was the issue of tax exemption given to Bujagali dam. A question arose as to whether there will be reduced power tariffs to the benefit of consumers or instead the burden will befall the tax payer!