As tax revenue has been increased in the national budget of the financial year 2023/24 which comes forth on July 1, 2023, the citizens are concerned about the tax fairness, equity and ability aspects of the principles that governs taxation matter in the country which are not adhered to.
Hon Muhammad Nsereko the MP for Kampala Central said that the there’s no fairness and equitable distribution of the income generated from taxes especially in Kampala. He cited out an example of the roads sub-sector and the health sectors which tax payers would benefit from but are poor in terms of services.
He said that, he asked people of his constituency in a random survey whether they feel the taxes in terms of service say roads, Water channels, in the health centers and schools, he was over whelmed by the negative attitude that the masses had about such government services yet taxes are collected to extend such services to the citizens.
Nsereko informed journalist while at Hotel Africana after attending a tax conference organized by URA that there are people who earn hugely but their income go un taxed yet they are the one who share a big portion when it comes to the sharing of the tax income.
“ Some that are doing business don’t pay taxes yet they are doing same business with those who pay in the end those who hassle with taxes end up out competed and the go out of business. For instance when you go to shops or supermarkets you may find that a packet of biscuit is being sold say a 2000, yet from another the same quantity and quality go for 5,000 because the later pays taxes while the former isn’t taxed.’’ Nsereko said.
He adds: “ Those who own big income generating activities are not levied at all for instance someone with 1000 herds of cattle or 4 square mile of coffee goes untaxed, well as a bodaboda rider is taxed is that fairness as far as principle are concerned?’’ Nsereko wondered.
The MP for Kampala Central also said that as a way forward and in order to create fairness and equity in taxation, there’s a need for the citizens to come together without despising one another and redefine the levying and distribution of tax incomes. He advised that the tax incentives given to foreigners who invest in the country should also be revisited because these after the expiry of say tax holidays they quit and go back to their mother countries.
The chairperson of the Equal Opportunity Commission Safia Nalule Juuko who is also a former member of parliament said that in order to improve the tax base, there’s a need to get every age working citizen to get involved in an income generating activities and this can be achieved through mindset change.
She said that because of poor mindset, the young energetic people are migrating from rural areas to urban centres were in most cases they first sale their parents land and they agriculture to the older people and this has narrowed the tax base of the country thus make the tax to GDP ratio very small.
Nalule said that in the Parish Development Model, the emphasis should first be put on the pillar of Community Sensitization and mobilization if we are to get the masses especially the youth into the money economy and expand the tax base.
While addressing the tax payers, CSO and government officials who turned up for the tax payers’ conference, the commissioner General of URA John Musinguzi said that, it’s not true that all businesses are taxed. He said for example business with a turnover of Ushs 1 million and below is not taxes while those ate are within the range of 10-30M pay only Ushs 80,000 well as those in the region of 30-50M, pay Ushs 200,000 annually.
According to Musinguzi this does not pinch the tax payer as many people say. He said that the mass just need to be sensitized in order to make them appreciate why they should pay taxes.
In the forthcoming budget, URA was given a target of collecting Ushs 29.7 trillion reflecting and increment of Ushs 4.2 trillion from 25.5 trillion of the ending budget of FY 2022/23. Musinguzi said that this is an uphill task but its achievable given and expansion of the tax base.
The Commissioner General said that in order to meet the target, URA will embark on massive sensitization of the citizens to encourage them appreciate paying of taxes because the majority don’t know why, how and for what they are paying the taxes.
Secondly he said URA will also ensure that the tax payers enjoy paying taxes by making very convenience for every one especially the small tax payers for instance bodaboda riders will be able to meet their tax obligations by using their mobile phones by simply dialing *285# and follow the system like it’s the case while paying for other services.
Currently the country has only 1.7 tax payers combine both the individuals and corporate companies but Musinguzi said that URA is targeting by 2030 to have 9M and the county will be able to efficiently finance its budget with very minimal borrowing.
By George Bukenya