Parliament’s finance committee has rejected the 200,000 Shillings license on cars and 50,000 Shillings for motorbikes. thecapitaltimes.co.ug has learnt.

Last week, the minister of Finance, Matia Kasaija tabled tax measures seeking to make amendments to a number of bills including, Excise Duty Act, External Trade Act, Fish Act, Income Tax Act, Mining Act, Stamp Duty Act, Tax Appeals Tribunal Act and Tax Procedures Code Act.

Kasaija had proposed the fees as part of the revenue measures to fund the 2021/2022 budget.

His move was supported by the State Minister of Finance David Bahati who On Tuesday said that the move is intended to streamline the transport sector by getting rid of illegitimate cars and raising money for the maintenance of roads across the country.

“If passed, the proposal will come to effect on July 1, 2021. It is embedded in the Traffic and Road Safety Act (Amendment) Bill, 2021 which seeks to impose a license to permit ownership of a motor vehicle, trailer or engineering plant,” Bahati said.

However, on Thursday, Committee chairperson Musasizi asked why the government insists on imposing direct taxes that are hard to implement and also questioned how owners of vehicles parked at home will be charged yet their cars are not on road. The government has projected to raise revenue to a tune of Shs 22.408 trillion with tax measures alone raising Shs 400.93 billion for the financial year 2020/21.

Musasizi made the revelation after a meeting with the Civil Society Organization (CSOs), Uganda Breweries Limited and Century Bottling Company who were submitting their views on the new revenue proposals.   

He says the plan is also to approve the 30 per cent or 250 Shillings tax on locally made alcohol, 70,000 shillings on each kilogram of fish maw and 30 per cent on all rental houses among others.

“We shall pass the 6 new tax amendments apart from the annual 200,000 Shillings fee in the spirit of raising revenue from the government. The other stakeholders we are meeting today are just coming here to give us their input not to reject the taxes,” Musasizi said.

However, Musasizi said that 12 percent of data will be approved since members of the committee have not protested it. He says that 12% is actually a fair tax and that it can easily be collected. He says that if any challenge arises, they can review the tax after 12 months.  

“12 per cent on data is not much. For example, some people use up to 500,000 shillings worth of data per month, now 12 percent of that is only 6,000 Shillings, ”Musasizi said.

Nandala Mafabi, the Budadiri West MP wondered why the government backtracked from its previous plans of imposing taxes on fuel yet the car license fees was earlier scrapped because it was hard to implement. He says this could increase the rate of corruption where motorists would be paying less money to the officers so as to obtain the licences

Meanwhile, Regina Navuga, the Program Coordinator Financing for Development at the Southern and Eastern Africa Trade Information and Negotiations Institute-SEATINI rejected the 12 per cent tax on data and the annual 200, 000 shillings license for motorists.     

She proposed that the tax on data be reduced from 12 to 5 per cent.

Navuga said that although there is an increase in the use of data services, the revenue from the services including airtime is dwindling and adding more tax on data could further reduce the revenue collected.