The Finance Committee of Parliament Tuesday started internalizing the Excise Duty Amendment Bill No.2 that aims at reducing the 1% tax on all mobile money transactions to now 0.5% on mobile money withdrawals.
However, a section of lawmakers on the Finance Committee that recommended to Parliament to pass into law the controversial social media and mobile money taxes admitted that they didn’t have enough information to pass the Excise Duty Amendment Act 2018.
It is worth noting that government backtracked on the 1% tax on all Mobile Money transactions after it backfired, with many Ugandans boycotting the use of the once popular platform.
This saw Finance Minister, Matia Kasaija disown the 1% tax on mobile, noting that approved 0.5%.
However, he was forced to apologize to Parliament, where he argued that he was misquoted by the press.
While considering the Excise Duty Amendment Bill No.2 for the first time, Kumi County MP, Charles Ilukor admitted that the Committee made a law that that didn’t go well with the people and called on all the parties to share the blame instead of pushing the blame to others.
Ilukor wondered why the Ministry with a whole department of tax policy, with Commissioners can sit the whole year without looking into the tax policy they advise towards the budget.
“Bring us bills with up to date information and consult with the various stakeholders. At the end of the year, you rush to the Committee and we are also squeezed, we have a short time within which to pass the budget. At times, we are forced to adopt what you bring to us without making enough consultations,” Ilukor said.
He added: “The President has given guidance, the President isn’t a tax consultant, the President isn’t a technical person but he reacted on public concerns. Where were you at the time of designing these bills to look at the possibility of public reactions as far as the Bill is concerned? Did you act in good faith to bring us what you brought?” Ilukor asked.
Namutumba Woman MP, Mariam Naigaga asked State Minister for Planning, David Bahati to resist from pushing the blame to Parliament.
“I want to join my colleagues and apologise that I think somewhere, somehow, we weren’t furnished with enough information as far as the impact of the Bill of taxation on the economy was concerned and promise that going forward, we shall do our best to make sure everything moves in the right direction,” Naigaga said.
While tabling the Bill, Bahati noted that the new amendments are aimed at spreading the tax burden across the whole population geared towards ensuring that everyone pays a little, saying Government needs small amounts of taxation on large numbers of people so that the overall burden is minimized.
The Minister revealed that at the moment, Government can’t borrow anymore from domestic market beyond the Shs1.9Trn, as Government can’t afford to pay more interest rates beyond Shs2.5Trn.
“Increased borrowing therefore means increased tax burden, we therefore need to increase our tax base to promote self reliance in financing our priorities at this cost. There is no room for budget cuts or borrowing, any reduction on taxes of mobile money will jeopardize the implementation of the budget,” Bahati explained.