Parliament Sets Eyes On Bottled Water, Diapers As New Taxes Loom

Parliament yesterday passed the Excise Duty Amendment Bill, 2023. This bill intends to make every Ugandan to part with taxes of Shs75 on every litre of bottled water once the new tax legislation comes into effect. This is in addition to the current provision of 10 percent levy. According to the State Minister of Finance in charge of Planning, Mr Amos Lugoloobi, this is meant to close out possibilities of under-declaration by some manufacturers in the water industry.

Under the new tax plans, all diapers whether for adults or children will subject to tax by the government. In passing of the Value Added Tax Amendment Bill 2023, Parliament threw out the government’s initial plan. This was to exempt adult diapers from being taxed.

Before this proposal was thrown out, the Finance Committee Vice Chairperson, Ms Jane Pacutho, said: “As a Committee, we feel that there are a few categories of older persons, who use diapers and they are really for medical use. No adult person will really use diapers and therefore, we should limit this exemption to only adults. When we allow even for adults, so many people are going to use this and yet they are non-degradable.”

This was, however, objected by the shadow Minister for Finance, Mr Muwanga Kivumbi, who reasoned: “It defeats logic to rule that only adult diapers are treated as medical goods but not all diapers. We are aware that even children suffer from diarrhea and for medical reasons, they need diapers. So you can’t say diapers are an exclusive need for only adults.”

A section of legislators feared that exempting adult diapers from taxation would benefit homosexuals.

Parliament later resolved to tax all diapers. Similarly, lawmakers rejected a committee report that sought to impose a 0.5 percent tax on every bank transaction such as withdrawal of cash. This is after Speaker Anita Among discovered that they had not subjected the proposal to discussion. Especially from the requisite stakeholders such as those in the banking sector.

“Can you give me more clarity on how it smuggled itself into the Committee? Did you interact with the stakeholder and which stakeholders did you interact with? I am saying did you interact with the regulator, with bankers’ association, and regulator meaning Bank of Uganda?” Ms Among inquired.

By press time, plenary was still in session and had so far handled the Excise Duty Amendment Bill, 2023. The Value Added Tax (Amendment) Bill, 2023, and the Tax Procedures Code Amendment Bill, 2023.

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