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Govt ought to prioritize clearing domestic debt to widen tax base

President Museveni with Anita Annet Among

President Museveni with Anita Annet Among

If you buy a 15-year-old car from Asia or Europe and bring it to Uganda, it will feel and handle like a brand-new vehicle while driving it.

Many parts will still be intact and you won’t hear a part rubbing on another. At least that is what happens in the short run. A few months later, you will start visiting the garage. Shock absorbers that no longer work. A tie rod end that is broken. A rack end that needs urgent replacement.

The mechanic presents the bill and after scratching your head for money, you remember that TV advert of Osmosis and reach out to borrow some money so at least you can get back to the road. A few weeks later, the car is feeling exactly its age. The problems are back again. You visit another mechanic while cursing the other.

It is the same problem again. And now, you reach your phone for another money-lending app. It is time for Wewole. Weeks later, you are in the garage again. The problems don’t seem to go away. At the workplace, things are tight. The human resource manager has just issued a memo to all staff.

This month’s salary will be delayed. “As you all know,” the HR manager’s memo starts to read, “government has not paid us the money they owe us for supplying them four years ago. Management is doing everything in its power to pay you but in the meantime, please understand the situation. For years, we had never failed to pay you but this time things are different.”

As you drive out of office, the traffic jam is simply unbelievable and the fuel sign is lighting up the dashboard and the fuel station pump sign is incessantly flashing, illuminating your car with some irritating unwanted warning. But somehow you manage to reach home.

You switch on the TV and a ministry of Finance official is being interviewed on issues to do with taxation. He is enraged that Ugandans don’t pay taxes and is threatening action. He claims he is going to make the world so difficult for you. You wonder how more difficult is he exactly going to make your world difficult. It is already difficult.

You also know that you pay lots of taxes. Pay as you earn is deducted every time your boss is paying you. Every time you transfer your salary that is already taxed to your mobile wallet, you will be taxed again when withdrawing it. Every time you buy fuel, you are paying some tax.

You are very much aware that if your tax had been used properly, you would not have been going to the garage every single day. Your tie rod ends and shocks are being broken by gaping potholes that are everywhere you turn.

The mobile money-lending apps wouldn’t be threatening court action had the ministry of Finance official ensured that your company was paid on time for the goods and/or services rendered four years ago. Your company would have grown if the government had paid its domestic debt to its suppliers.

Although it is important that government widens the tax base as the ministry of Finance is threatening to do, one sure way people can easily pay taxes is by ensuring effective service delivery. If the roads are smooth, schools are built and functional hospitals exist, people would gladly meet their tax obligations. Instead of buying tie rod ends every few weeks, taxpayers would have some surplus that would enable many sectors of the economy to blossom.

But many companies are seeing their assets being sold on auction simply because they have failed to pay their debt as a result of supplying the government of Uganda. Seasoned businesspeople are advising their proteges to avoid supplying government. Government is the biggest business in any economy and, therefore, companies can’t grow to pay more taxes or pay their workers better when they aren’t being paid for decades.

Under pressure by the electorate, politicians dip their fingers in the public till just to provide social services to ensure re-election. People no longer trust their government to deliver. That is why they put so much pressure on members of parliament to do the work that government is meant to do.

To collect more taxes, let government pay its domestic debt and at the same time ensure effective service delivery. Once people see what their money is doing, there won’t be much cajoling for them to pay Caesar what belongs to him.


The writer is a communication and visibility consultant

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