A new report titled Fair Tax Monitor Uganda has faulted government on tax Policy. The report states that government is not performing well in regards to reducing the widening poverty levels amongst Ugandan’s through tax policies.
Government is also faulted for not having a clear and transparent policy on tax incentives and exemptions awarded to some companies. As a result, Uganda loses revenue amounting to Shs 8.4 trillion between 2010/11 – 2016/17.
The Southern and Eastern Africa Trade, Information and Negotiations Institute (SEATINI-UG) and Oxfam launched a study on 23rd January 2019.
In 2018, SEATINI-Uganda with support from OXFAM commissioned this study with the overall goal of strengthening advocacy activities at the local and global level. The study provides an overview of the country’s national tax system and identifies the main challenges faced.
It analyzes the fair tax index indicators including the tax system, tax burden and progressiveness, effectiveness of tax administration, government spending and finally transparency and accountability.
The research reveals among others; the fiscal regime which explicitly shows that the legal and institutional structure of who, where and when revenues should be collected are clear but there seems to be inadequacies in the coordination from top to bottom and vice versa.
The report calls for number of measures including the need to overhaul VAT exemptions and zero rated supplies providing a level ground for all taxable entities.
The study however recommends for amendment of section 77 (1)-(2) of the Public Finance Management Act (PFMA), 2015 which accords the Minister to award tax exemptions, report and justify the award to parliament.
“Government should analyze the impact of any proposed tax reforms and base the decisions on the potential impact on reducing inequality before introducing any new measures,” the report reads in part.
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