Government raises over 779Bn taxes from mobile and internet users

By Moses Kidandi

Uganda Revenue Authority has announced that the major tax heads have registered good performance during the financial year mainly import duty that performed at 100.71% of the target and VAT on imports which performed at 102.62%.

The major tax heads that recorded gross surpluses during the year were majorly direct taxes include include; corporation tax; that registered a surplus of UGX 331.37 & PAYE; that registered a surplus of UGX 148.60 billion.

According to the commissioner General Uganda Revenue Authority Doris Akol,the major import items that registered increase in tax yield during the Financial year 2018/19 include; worn clothing (UGX 42.25 billion), cigarettes (UGX 29.27 billion), motor vehicles (UGX 28.36 billion), Foot wear (UGX 27.00 billion) among others.

she says Tax policy measures introduced under the Local Excise Duty namely , the daily OTT levy & levy on mobile money transactions contributed net estimated revenue amounting to UGX 779.5 billion from a total of UGX 1,095.29 registering a performance of 140.50%.

She was speaking during the presentation to the media of the performance overview for the financial year 2018/2019 at URA Head in Nakawa.

Ugandans shouldn’t worry about new taxes -MP Musasizi

By Alice Lubwama
Government will not introduce any new tax in the national budget 2019/2020 which will be read today 13th June by the finance minister Matia Kasaija.

The chairperson of the finance committee of parliament Henry Musasizi has given an assurance to Ugandans that parliament did not approve any new tax apart from introducing administrative measures which will improve efficiency with in tax administration.

“Measures are to bring down the taxes and we have actually terminated withholding tax of 1%on agricultural inputs.” Musasizi added.

But an opposition member of parliament on the budget committee Muwanga kivumbi say that apart from parliament passing the budget without following the right procedure, there is a lot of borrowed money which will not be utilized in the budget because of luck of counterpart funding by government.“ for example UNRA alone we lost last year 200 billion in idle time and on loans that were not being utilized because government did not have counterpart funding.’’ Muwanga noted

The 2019/2020 financial year budget totaling to 40.5 trillion Shillings was passed by parliament without debate on the report from the budget committee.

MP Muwanga kivumbi also say that by the deputy speaker of parliament Jacob Oulanya denying mps a chance to debate the report and make some changes in allocation of funds it will have an effect on some livelihoods.

The MP claims that if the mps had been allowed to make changes in allocations, they would have saved the youth livelihood fund and NAADS funds that has now been shifted to the office of the president.

Muwanga add that parliament had resolved that government increases salaries for all teachers but because there was no debate on the report, only salaries for science teachers have been increased in the budget being read today.

Some of the least funded sectors are Tourism with 157 billion, ICT 123 billion, Trade and Industry with 171 billion, Science and Technology 159 billion, Lands and Housing 193 billion, Social Development 218 billion and others.

Government urged to implement taxes

By Alice Lubwama

The executive Director National Planning Authority Dr. Joseph Muvawala proposes that government starts   evaluating its taxes on an annual basis, to know how much is spent on getting the taxes.

While speaking during the annual CEO forum in Kampala today, Muvawala said that Government has always come up with new taxes, but has never taken time to assess the cost of collecting the taxes and the benefits to the people who pay them.

Muvawala noted that the country has the best policies for the different sectors but the strategy to implement them still lacks consequently limiting development.

The boss for the planning body in the country says that Government should not  stop at writing good plans for the country and leave other countries to copy and implement them . He now calls on the chief executive officers to advice government on how best it can implement its plans or policies.

Uganda Revenue Authority is expected to collect 17 trillion shillings in this financial year 2018/19, up from 15trillion shillings   tax targeted last financial year.

According to economic researchers, Uganda revenue authority needs to use a technology to detect users of the social media to be able to collect the daily 200 social media tax. On top of the social media tax, government also increased excise duty on mobile money and bank charges from 10% to 15% .

Parliament slices mobile money tax to 0.5%

By Moses Kidandi
State minister for finance David Bahati has clarified that the 0.5 % TAX on mobile money will apply to only those that will be receiving money from senders.
Bahati was explaining some of the cabinet decisions following a public out cry protesting the 1 percent tax that  was initially passed on all mobile money transactions in the National Budget for the financial year 2018/2019.
ICT minister Frank Tumwebaze  has urged the public not to panic parliament is this afternoon also expected to pronounce its self on the same matter that has already been concluded by the cabinet.
The legislators are  also expected to deliberate on the two hundred shilling OTT Tax that has been levied on social media.
Last week opposition MPS  and activists led by  Hon Robert Kyagulanyi  of Kyadondo East  were involved in a stand off that with Police as they protested the social media tax.

Ugandan rice farmers demand protection against cheap imported rice

By Deo Wasswa
Rice farmers in Eastern and Northern Uganda through their association, Rice Association of Uganda have petitioned the 10th parliament to remove the Tax waivers on imported Rice.

According to the association, in 2015, the government  granted waivers to few so called investors to import brown rice on claims that there was low rice production in the country as compared to the demand.

These farmers says, it’s now three years down the load, the few people are still importing this cheap rice without paying any single revenue, and this has left the local production stressed with no market.

The statement presented to journalists by the association chairperson Rachel Kiconco Mbabazi, shows that the waivers granted have resulted in a loss of URA revenue in excess of 218 bn and forex losses to government in excess of 209 bn resulting in a total loss of 509 bn.

Annually close to 50,000 metric tonnes of rice imported to Uganda of which 14,000 tones coming from Tanzania and the rest comes from others countries especially Pakistan


Legislators join mobilization for signatures against new taxes

By Deo Wasswa

Hon. Mbwatekamwa Ggafa(Bwamba county),Hon. Sabiiti Denis(Rubanda west), Hon. Florence Namayanja(Bukoto east),  Honrable Baseka(Ntenjeru south) Fred,  Hon Ajilo Maria Goreth(Kaberamaido) and Honorable Semuli Anthony (Mubende municipality) are some of members of parliament who have signed the pledged book to oppose the new proposed  taxes  on mobile money.

The campaign which has been launched officially today at Hotel Africana seeks to collect 250 signatures from  members of parliament to reject this tax which is likely to affect a bigger percentage of Ugandans if it’s adopted by the government.

However , during the launch some Members of parliament have advised the proprietorship of the campaign, the civil society budget advocacy group to mobilize them selves and walk to parliament to convince other members of parliament to join the campaign.

Julius Muhinda, the national coordinator, Civil society budget advocacy group says they have started mobilizing Ugandans to out their members of parliament on pressure to reject this form of tax.
He says within two weeks,  they except to collect at least  100 signatures  from members of parliament.

Civil society organisation hunts for signatures to halt new taxes

By Deo Wasswa

Civil society budget advocacy group under their coalition “Tax justice alliance Uganda intends to come up with a pledge book to solicit at least 250 signatures from members of parliament to oppose new taxes the government is proposing to introduce on mobile money.
According to the coalition, introducing new taxes on mobile money transaction and leaving out bank transactions untaxed, its a symbol that the government is protecting banks against mobile money business.
Kimera Henry, a member to the coalition says taxing mobile money will affect more of local people who don’t have any idea about the bank services.

The sources from the coalition shows that 41% and 48% of districts out of 112 districts in Uganda lack access to any bank branch and ATM respectively.
Over 6000 schools in Uganda  use mobile money to receive school fees.

The highest proportion of mobile money transaction users, 61% of transact is less than Uganda shillings 45000/=.

New ICT regulations could limit innovations

For many, social media taxing has turned out to be a big blow towards their day to day online lifestyle. From an innovator’s point of view, online media taxing and the current proposed ICT regulations may clearly hinder any future ICT innovations.

Many successful startups in Uganda including the popular Boda hailing service Safeboda have all grown support and exposure through the old tax free system. But, with the new proposed ICT regulations, innovators may seize to have a broad ground to showcase and develop new brilliant solutions.

During last year’s Uganda Communications Commission’s (UCC) hack for transport Hackathon. Hackers used opensource tools like the IBM cloud-based Bluemix platform to develop and come up with fresh new solutions. Which is, by the way, an online opensource tax-free developers tool.

While Quick Tap emerged winners of UCC’s three-day hackathon after successfully pitching the best transport solution with a whole lot of support promised to them by UCC. We have never received takeover news about the startup in this daily age even when it was a Safeboda sort of competitor.

UCC through this expressed support for innovations in Uganda. But then, with the proposed ICT regulations young innovators may ditch their ideas since the internet is a core tool for research and development. With taxation of some of the core services that turn the internet into a fun spiced research zone. Innovations in Uganda can turn into a historical kind of progression with only uptown developers paving way for better solutions.

According to a new study about the financial technology sector.The financial deepening sector (FSD) has grown to about 65% in the last 7 years in East Africa alone.

However, with factors limiting the rate of innovations and development. The rate will depreciate hence limiting the number of creative minds willing to put their skills at stake for better innovative ideas. Therefore, while Government is set to Tax social media and online media platforms. Innovators will no longer have greener pastures to develop new startups in Uganda.



World Bank impressed with social media tax debates

The World Bank Senior Economist for Uganda Richard Ancrum Walker says he is impressed with the public debate around proposed new taxes, including that on social media usage.

Addressing journalists in Kampala, Walker said that for long, public debate in Uganda has been about expenditures and not revenue mobilization. Walker said he is happy that this time, there has been a lot of public debate on the administration of revenues, which is crucial for Uganda.

In her tax proposals for the financial year 2018/19, the government intends to introduce new taxes including among others, the 100 shillings daily tax on social media user, the one percent charge on every mobile money transaction and taxing of savings and credit cooperative organizations (Saccos), among others.

The Uganda Revenue Authority also wants banks to furnish it with customer details as one way of generating revenues, although the president has since halted the move. Also on the cards is a proposal to tax each international call at 330 Shillings.

The new tax proposals like that on users of social media platforms like Facebook, WhatsApp, Twitter and Instagram, have generated public uproar, with most voices opposing it as “double taxation” on grounds that such social media users already pay taxes on the airtime and data, as well as on the smartphones.

In 2016/17 financial year, the Uganda Revenue Authority collected 13 trillion Shillings, which is less than half of the national budget of 29 trillion Shillings. In order to cover the deficit, the government has to borrow externally and domestically, as well as sourcing from development partners.

The implication is that the borrowing increases the debt burden, as more and more monies are used to repay the debt, including more borrowing. In the current budget, nearly three trillion Shillings is for debt repayment.

Reacting to the World Bank stance, political economist Prof Julius Kiiza, of Makerere University, agrees that the increased focus and debate on different sources and nature of government revenues is healthy and encouraging.

According to Prof Kiiza, the debate should be deepened to include government’s double standards of providing generous tax holidays for so-called investors, while, as he puts it, “squeezing the daylights out of ordinary businesses and citizens who are already struggling”.

Prof Kiiza says even without proposing new revenue sources, the government is already losing so much in revenues to dubious investors who, in addition to benefiting from tax exemptions, also use offshore dealings to fleece the country of lots of money.

He says the debate on resource mobilization must also focus on the citizens holding duty bearers accountable for every single coin they collect and spend.

Writing in The Daily Monitor recently, economist Dr Fred Muhumuza of Makerere University, the new tax proposals are symptomatic of so much chaos in the country and that it is hard to determine what will happen when the proposed taxes take effect.

Dr Muhumuza wondered what could be the real intention behind the new taxes like the “WhatsApp” tax considering that such users are already taxed for buying airtime and data. He thinks the tax is more to do with curtailing freedom of information and expression.

According to Dr Muhumuza, using the Internet is more of a production than a consumptive venture, and should be promoted.



KCCA to enforce tax collection on city residential houses

Kampala Capital City Authority-KCCA wants owners of private residential houses in the city to resume paying property tax. Jennifer Musisi, The KCCA Executive Director, says the property tax waiver on private residential houses costs the Authority over US$ 1.3 million dollars annually.
According to Musisi, almost all the owners of houses in upscale parts of the city are not paying property tax, claiming they occupy them. Musisi says owners of multiple houses in the City avoid paying the property rates by claiming that they reside in the houses yet they rent them out. Previously, almost all the owners of the residential houses use to pay property rates.
However, during the 2006 presidential election campaigns President Yoweri Museveni, said those staying in the houses should be exempted. As a result, the Local Government Act was amended to cater for exemption.
The Local Government Act 2005 and its amendments of 2006 also exempts official residence of the President, a traditional or cultural leader and property used exclusively for public worship, and residences of a religious leader from property tax.
KCCA with funding from World Bank has embarked on automation of property rates management targeting to register over 250,000 properties from the 120,000 properties registered. The Authority expects to collect seventeen million dollars annually from property rates.
Musisi says the Authority also plans to carry out a fresh valuation exercise in the city, saying the last valuation was carried out ten years ago. She says many of the newly constructed malls and houses are not paying the property rates because they have not been valued.