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Museveni: ‘Taxing Production Is A Big Mistake, It Should Stop’

Uganda’s President Yoweri Museveni Tuesday officially opened the 4th International Conference on Tax in Africa (ICTA) and the African Tax Administration Forum’s 10th anniversary celebration at Serena Hotel in the Capital, Kampala.

Themed “Innovation- Digitalization and Harnessing Technology to Improve Tax Systems”, the Conference attracted over 300 participants from 48 countries of which 38 are from the African continent.

The President asked tax revenue bosses from Africa and policy analysts to interest themselves in what to tax and why.

Museveni said there’s need for policy review so that taxes on production are minimized.

“When you tax, sometimes you discourage more use of what you have taxed,” Museveni said, adding: “I think if you want to grow African economies, you need to reduce taxes on production; taxing production needs to stop.”

The President gave an example of people selling mangoes and roasted meat and plantains along highways and in towns as businesses that should not be taxed, but “our people (Uganda Revenue Authority-URA) want to tax them.”

“Leave them; let them make money and put it in their pocket. I know Ugandans with money like spending it. In the evening, they will go to the bar (to drink beer), so tax the beer,” Museveni said, adding: “Taxing production is a big mistake.”

Tax revenue bosses agreed with the President that small scale production should not be taxed, but large scale production should be taxed in order to grow African economies.

Museveni advised URA to digitally map all buildings in Kampala for easy tax decisions. He said this will help them know what to tax and what not to tax.

He commended URA for the recently launched digital tax stamps, saying that the move will increase tax revenue collections.

Uganda’s Minister for Finance, Planning and Economic Development, Matia Kasaija said it is challenging for African revenue bodies to tax online companies like Uber, who receive payments from Africa in foreign countries.

“Hotels are digitally booked and paid for,” Kasaija said, noting that it’s not easy to trace such transactions without a relevant law.

Minister Kasaija (L) chatting with URA Commissioner General, Doris Akol

However, President Museveni wondered why Kasaija is worried because “once you go electronic, it is easy to trace you.”

He noted that Uber service is offered in Uganda, customers are here and the money is in the hands of the customer or in their account, thus easy to track.

The conference running through Thursday 22nd November 2019 will look at innovation through use of technology in Africa to strengthen tax systems and develop solutions to broaden the tax base.

The African Tax Administration Forum (ATAF) was formed after a Pretoria conference on taxation and state building. The key objective for its launch was the need to take control of the Continent’s development by mobilizing revenue internally.

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