Header advertisement
Blogs

Taxes: Why Ugandans Must Tighten Their Belts

kagina_957495563

Header advertisement

ed geneva; font-size: small;”>The legislators were celebrating for the cause of teachers, diagnosis who had their foot on the ground that they would not return to classrooms before government fulfills its pledge to increase their salaries by twenty percent.


The MPs successfully blocked the passing of Education and other ministries’ budgets before this teachers’ case was out of the way.

Teachers resiliently rejected threats from the education minister Jessica Alupo that they risked losing their jobs if they didn’t pick up their tools and go to class when the term officially resumes.

Apparently the teachers are set to meet the president to seek for a lasting solution to the strike.

Over the past months, government could not wish away this trending civil servants salary increment uprisings, with the precedent well set by lecturers at Makerere University, whose industrial action saw the country’s largest institution of learning closed for three weeks.

Although the solution to their demand did not come directly from government forking out sh75bn to meet their 100% pay rise, they managed to find an equally good consolation internally.

The teachers also promised that they would be at it again come next financial year, and that this time round, government would be compelled to effect their double pay rise.

Taxes

While civil servants are currently enjoying almost everybody else’s support in the country, Ugandans will soon want to come to terms with the fact that these extra expenses to government will have a direct implication on their own daily incomes in form of taxes, especially that a miraculous solution is not about to fall from heaven today to plug leakages into the pockets of the fat corrupt cats.


The Finance Ministry, including in this teachers case, has severally come out to declare its inabilities to find money for theses abrupt and unbudgeted for quests onto the national budget.

Because these demands sometimes with the help of politicization, end up as legally binding government responsibilities, and with more plugs onto foreign aid inlets, the ministry is often times left with no option but to pile all the pressure on Allen Kagina’s Uganda Revenue Authority to find the resources.

Consequently, URA has this year rolled out a plan to help ease the search for Maria Kiwanuka’s demands, which entails about 20 strategic interventions to enhance both domestic and customs revenue collections for the financial year 2003/14.

According to Kagina, these measures are not necessarily introducing new taxes, but are geared to ensure more efficiency in tax collection by plugging as many loopholes as possible mostly utilized by tax evaders, and potentially expand the tax base.

The interventions will target penetration and squeezing more out of the informal sector as well as the agro processing sector.

The say that this will take first identifying and distinguishing between farmers and middlemen, to ensure that the grassroots producers are not the ones directly affected by the taxes.

Leading supermarkets that deal in agricultural processed products will also be gazetted in the new tax plan.

Regarding customs revenue enhancement, URA has introduced an electronic cargo tracking system to help hood tax evaders.

“We are also constructing several modern one-stop-border posts at Busia, Mirama Hills and Katuna, to increase efficiency of our agents there,” said Customs Commissioner Collins Kateshumba.

Domestic Taxes Commissioner Henry Saaka on the other hand noted that Uganda has the least tax base in the region mainly because the population’s largest employer – agriculture – is the least taxed.

“There is a clear inverse relationship between the size and number of taxpayers and their contribution to the national revenue,’’ Saaka noted.

He further stressed that a small group of the population typically contributes more than half of all tax collections.

“It’s important to recognize that collections from the small taxpayers account for more than 95% of the taxpayer population, but contribute less than half of the revenue collection, ”added the taxes commissioner.

Saaka therefore warned the tax payers to be aware of their obligation and pay taxes.

However on the other hand Kagina noted that taxpaying is not only a constitutional mandate to every Ugandan but also the only way of giving ownership to Ugandans of the national economy.

“When you avoid paying taxes, you don’t have the right to ask for government accountability,” explained the Commissioner General


“Look at what happen when graduated tax wad scraped. People had nothing else to worry about, and when they learnt that government
would take care of their children’s school fees, the quality of UPE we have today was an inevitable outcome,” added Kagina.

The URA Commissioner General therefore noted that people in agriculture and informal sector are the most resistant of paying taxes, as they expect big companies to bridge the income gaps emerging in the taxes.

“If we don’t train our own Ugandans to pay taxes to support their government and keep piling the entire burden on foreigners, soon they may choose to leave the country and invest elsewhere and we will remain with a population that doesn’t want to pay taxes. The economy will come crumbling on us,” warned Kagina.

Advertisement
Comments

Header advertisement
To Top