Members of parliament have criticized the value added tax imposed on fuel which they said its going to increase the low income earners.
In heated debate on Monday 6th May on the provision to increase the taxes on fuel with sh.300 on kerosene and sh.100 on diesel and petrol, various members of the parliament expressed uncertainty over the tax.
Ibrahim Ssemujju Nganda of Kira municipality said,
‘’government should not be greedy, you are already overtaxing fuel, why do you turn it into a soft target for tax increment ‘’.
‘A minister whose fuel is bought by the tax payer, must not increase taxes on fuel unnecessarily, may be we should stop fueling all government vehicles for the leaders to understand the pain that citizens go through’, Ssemuju said.
He expressed his discontented that despite being freely of the adverse effects of escalating oil prices on both product costs and individuals’ disposable income , the government continues to drainage its citizens with exorbitant taxes on fuel.
He warned government of the consequences of fuel increase which will lead to production becoming more costly hindering economic growth and potentially leading to job losses.
‘’How can the government option to tax kerosene and the other taxes without consideration of jet fuel which they termed unfair’’, Ssemujju wondered.
The finance committee recommended that they should impose a tax of sh.300 and legislator on the sh.100 terminated it as unjustified.
The committee rejected the with holding tax on land that this would affect the cost of production.
On average Uganda faces a significant reduction in disposable income ,as higher fuel costs trickle down into increased prices for goods and services across the board.
Many oppositions mps include Ssemujju, Muwanga, Kivumbi [Batambala county] and Hanifah Nabukeera [mukono woman] revealed that government is currently collecting sh.1450 per litre of petrol and sh.130 per diesel
The government collects shs.1.6 billion on petrol and sh.1.1 trillion on diesel and about sh. 3 billion on kerosene and taxes on both petrol and diesel are the key drain of fuel pump prices and that Uganda taxes the highest tax on fuel.
The committee has backed the proposal by government to impose 0.5% excise duty rate the value of the transaction on payment services of withdrawals of cash through agent banking saying such a more would ensure equal distribution of the tax burden among all tax payers instead of limiting to only mobile money users.
The committee also recommended the parliament to remove excuse duty impose on incoming international call services of 0.9% per minute on call origination from Tanzania and Burundi.
