Election 2016

Why Museveni Rejected MPs’ Tax Exemption Bill

President Museveni has refused to sign the Bill that allows MPs to dodge tax on their allowances

President ?Museveni has rejected the Bill exempting MPs from paying ?taxes, page http://d4462130.u92.platformpublishing.com.au/wp-content/plugins/events-manager/admin/bookings/em-rejected.php State House revealed Tuesday afternoon.

“The ?President has returned the Income Tax Amendment Bill 2016 to Parliament for reconsideration,” the presidency said in a brief statement.

The Parliament recently debated and passed a Bill amending the Income Tax Act to exempt the allowances received by the Honourable Members of Parliament from taxation.

The move attracted mixed reactions from the public with the civil society condemning what they described as the MPs’ selfishness.

On the other hand, the MPs warned that should the President refuse to sign the Bill into law, they would not pass the national budget for the Financial Year 2016/16.

The Constitution of the Republic of Uganda, in Article 2 guarantees equality of all citizens before the Law.

The Uganda Law Society (ULS) had warned that the exemption of MPs allowances from being taxed has the effect of granting greater weight to the Members of Parliament over ordinary citizens in as far as equal obligation to pay taxes is concerned.

“This preferential treatment to the Members of Parliament who are supposed to be at the service of the citizens of Uganda is discriminatory and amounts to a violation of Article 2 of the Constitution,” said ULS in a statement recently.

Court battle

The Court in the matter of Francis Byamugisha vs Attorney General, Parliamentary Commission and Uganda Revenue Authority HCCS No 745 of 201.3 resolved that all emoluments paid to the Members of Parliament are subject to tax under the provisions of the Income Tax Act Cap 34.

The Court further directed the Parliamentary Commission to collect with immediate effect any taxes owing and due to the Government of Uganda from the date of the decision going forward and remit the same to Uganda Revenue Authority.

The Parliamentary Commission being dissatisfied with the decision of the High Court lodged a notice of appeal dated 9th February 2016.

Before the Court of Appeal could pronounce itself on the appeal lodged, said ULS, the “Members of Parliament have chosen to render court powerless and the judgment useless by passing a law exempting them from paying tax.”

The legal body warned that such an action “is not only an abuse of the judicial process but it also amounts to misuse of legislative power.”

ULS further wrote to the President requesting him not to assent to this Bill.

“Every Ugandan is obligated to pay taxes irrespective of their position in society and there should not be a class of citizens who are exempted from payment of taxes. The tax burden should be shared fairly and Parliament should only develop a tax regime that applies to all citizens without discrimination,” said ULS.

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