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MPs reject Shs 200,000 annual licence on vehicles

The MPs rejected the Shs 200,000 tax on vehicles

The MPs rejected the Shs 200,000 tax on vehicles

Parliament’s finance committee has rejected a proposal by the government to introduce a Shs 200,000 annual licence on all motor vehicles and Shs 50,000 for motorbikes.

The ministry of Finance proposed the fees as part of the revenue measures to fund the 2021/2022 budget. If passed, the proposal would come to effect on July 1, 2021. It is embedded in the Traffic and Road Safety Act (Amendment) Bill, 2021 which seeks to impose a license to permit ownership of a motor vehicle, trailer or engineering plant.

On Tuesday, the state minister of Finance David Bahati said that the move is intended to streamline the transport sector by getting rid of illegitimate cars and raising money for the maintenance of roads across the country.

However, on Thursday, Henry Musasizi, the chairperson of the finance committee said that they are considering approving only six out of the seven proposed new tax amendments to help the government raise revenue. Musasizi made the revelation after a meeting with the Civil Society Organization (CSOs), Uganda Breweries Limited and Century Bottling Company who were submitting their views on the new revenue proposals.  

He said the plan is also to approve the 30 per cent or Shs 250 tax on locally made alcohol, Shs 70,000 on each kilogram of fish maw and 30 per cent on all rental houses among others.

“We shall pass the six new tax amendments apart from the annual Shs 200,000 fee in the spirit of raising revenue from the government. The other stakeholders we are meeting today are just coming here to give us their input not to reject the taxes,” Musasizi said. 

However, Musasizi said that 12 per cent of data will be approved since members of the committee have not protested it. He says that 12 per cent is actually a fair tax and that it can easily be collected. He says that if any challenge arises, they can review the tax after 12 months. 

“12 per cent on data is not much. For example, some people use up to Shs 500,000 worth of data per month, now 12 per cent of that is only Shs 6,000 [actually 60,000],” Musasizi said.

However, Regina Navugga, the Program Coordinator Financing for Development at the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) rejected the 12 per cent tax on data and the annual Shs 200,000 licence for motorists. She proposed that the tax on data be reduced from 12 to 5 per cent.

Navugga said that although there is an increase in the use of data services, the revenue from the services including airtime is dwindling and adding more tax on data could further reduce the revenue collected.

Uganda Breweries Limited managing director Alvin Mbugua welcomed the 30 per cent or Shs 250 tax on beer. He however said that there are concerns that government could impose another new tax on traditional fermented beverages.

Comments

+4 #1 Lakwena 2021-04-12 09:39
But how did the Tax Maniacs arrive at these percentages.

In other words, while most, if not all of them are tax evaders; they are out to tax honest and the hardworking Ugandans into bankruptcy.

E.g., 30% tax on a shanty Shs.50,000 Muzigo rental is UShs.15,000. Where does such a tax leave the slum landlord and his hassler and rent dodging tenants?
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+3 #2 Apollo Ekelot 2021-04-12 09:48
We really have a challenge with the people who represent us. I wonder if it is a challenge of education. A one Musasizi says 500,000 worth of data per month, at 12 percent is only Shs 6,000, which is wrong calculation!

Now because the chairperson of the finance committee and his bunch have a poor appreciation of numbers, we have to pay the tax its merits or demerits notwithstanding!
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+3 #3 bukusi 2021-04-12 10:48
Note that 12 percent of 500,000 is 60,000/= it is too much not 6,000/=
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+4 #4 Paddy 2021-04-12 13:40
Too good to be true. Let us hope and pray that the MPs sustain the rejection of the 200K. Now, ICT Ministry has explanations to give: with educational institutions adopting online learning, and with a poor population, from whom even the least they have is being taken away, what is in the future?

We don't need seers to see where our leadership is taking us, or its intentions. Tax internet usage when ICT is taking baby-steps means killing it. Sorry that this is the leadership we deserve at such a time as this.
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+4 #5 Joe 2021-04-12 17:03
For once let us applaud our MPs and encourage them for an act well thought out!

People are hurting, movement and physical interaction are generally discouraged to minimize the the spread of Covid 19 thus the need for data. Parents. are struggling to purchase the exorbitant data for their children to study on line, the data merchants are cheating like there is no tomorrow, the unreliable public power supply and slow unreliable internet connection and all manner of evil have all conspired to hurt the poor Ugandans.

The morons thinking of taxing internet, should instead focus on stopping the stealing of public funds, reduce ministries and parliamentary constituencies, in short reduce the humongous public expenditure instead of burdening us with more taxes during these difficult times!
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+3 #6 Umar Ali 2021-04-12 18:04
The government already collects tax indirectly on motor vehicles when the owners purchase fuel.

This was introduced when the road licence was abolished. Bringing it back will mean double tax on vehicle owners.

As for internet let us use it less and deny them the full revenue they want to collect. I'm not against paying taxes but I strongly believe that our taxes are being misused.
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+2 #7 Paul M 2021-04-13 07:40
The 30% tax on rentals was way overdue.

Most corrupt officials invest their stolen monies in rentals. Problem is that collection of this tax might not target them
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+2 #8 Lakwena 2021-04-13 16:23
Quoting Umar Ali:
The government already collects tax indirectly on motor vehicles when the owners purchase fuel.

This was introduced when the road licence was abolished. Bringing it back will mean double tax on vehicle owners.

As for internet let us use it less and deny them the full revenue they want to collect. I'm not against paying taxes but I strongly believe that our taxes are being misused.


Ali, this regime is full empty headed vultures who are only out for easy targets. And yet one of the easiest and voluntary tax is National (Government) Lottery.

In other words, most countries like China, the USA and UK collect a lot of revenue through Lottery.

This is because of "Lottery Jack Pot" is so tempting (Building Castle in Air), especially for the informal businesses/unemployed/poor from whom the government can't collect income tax and other direct.
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+2 #9 Lakwena 2021-04-13 16:36
In other words, since Lottery is a voluntary game of luck; if once in a while (month) a few dreamers, after buying a few UShs.1,000 Lottery Tickets and got a win e.g. of Shs.200,000; what will stop the same person and others, from jumping into the foray in trying out their luck every now and then?

And if the lose, they will have no one to blame except themselves.

Unlike when I pay direct taxes and expect direct/indirect services from the government, but which I dependants do not receive; what would stop me from complaining bitterly and try by all means not to pay taxes?
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0 #10 FRANCIS ORANIT 2021-04-18 07:06
The primary reason the country is poor its because lack of creative ideas to raise money.

We pay annual license on all vehicles in the US for instance a SUV its $85 a year. that's UGX 300,000 Why cant they do this in Uganda that doesn't make sense.
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