KAMPALA,Uganda – Civil society Organisations in Uganda have asked the Ministry of Finance not to amend the Tax Revenue Measures under the Value Added tax amendment Bill 2015 which will see Government exempting Mining companies to pay VAT.

The activists also want the Ministry of finance to increase the proposed levy operator’s license fee on bodaboda from the proposed UGX30, 000shillings or USD$6.7dollars by Government to UGX200, 000 Shillings or USD$ 67dollars

They said this will enable Uganda Revenue Authority to collect more revenue to finance Government proposed activities in the financial year 2015/2016 and also stream line the industry Business.

The Activists under their advocacy group civil society Budget Advocacy Group(CSBAG) told Journalist in Kampala that the proposal to amend section 24 and 25 of the principle of VAT Act is risky and likely to be abused by the Mining Companies and sets a bad precedent for other sectors.

“We had the Minister of Finance planning and Economic Development presenting tax revenue measures for th e financial year 2015/2016 to parliament among the proposed tax measure is the exempting of VAT Payment by the Mining Companies. AS civil society we strongly challenge this because it will lead to revenue loss and also lead to other sector to demand the same privileges VAT principles should not be applied selectively” Explained Ms Nelly Busingye Mugisha the programme Office at SEATIN Uganda on behalf of CSBAG during the briefing.

In the financial year 2015/2016 Government granted Value Added Tax exemption for companies involved in the production of oil and minerals. There had been mumbling by all players in the oil and gas sector regarding the 18 per cent VAT charge on capital equipment used in prospecting and production of oil and minerals.

In the VAT Amendment Bill 2015, tabled in Parliament by finance minister Matia Kasaijja, it grants the oil and mining companies this exemption but such exemption according to the civil societies very detrimental to other sector since its looks only at one sector.

On 1st April /2015 the minister of Finance planning and Economic Development Matia Kasaija presented to the members of parliament the tax revenue measures for the financial year 2015/2016 some of the proposed amendments include the Finance Bill 2015 Excise Duty amendment Bill 2015 value added Amendment Bill 2015 the Income Tax Amendment Bill 2015 among other bills

Under the Tax Revenue measure Government wants to amend the Excise Duty Amendment Bill 2015 to enable Government increase excise duty on petrol and Diesel from UGX 950 shillings or USD$0.32dollars to UGX 1,000 USD$0.33 dollars and UGX630shillings or USD$0.21dollars to UGX680 shillings or USD$0.23 dollars per litter respectively.

Government urges that increasing Excise duty on Oil related products such as Diesel and petrol will help the treasury to rise about UGX 62 Billion or USD$20.7million dollars which can be used to finance the UGX18.3 Trillion budget for the financial year 2015/2016.

However fuel supply who talked to East African BusinessWeek on condition of anonymity because is not allowed to speak to the media said hiking the duties on diesel and petrol will yield into fuel adulteration and dumping of transit fuel on the Ugandan market which affects the country’s revenue collection

“Increasing excise duty on petrol and Diesel is not the solution for Government to get more revenue the decision will end up affecting the whole process, because untaxed fuels on transit will end being dumped on the Ugandan market this does not affect the local fuel supplies but also Government because dumped transit fuels is not taxed by Uganda Revenue Authority.”The fuel supplier told East African Business week.

Other proposals which the minister presented include the removal of Excise duty of USD$ 0.09 dollars per minute on all incoming calls from Northern Corridor Member countries (Rwanda, Kenya, and Southern Sudan) to promote the East African Community Integration process.

However the Budget Advocacy group noted that such proposal are good for the Economy but Government should come in with mechanism to protect Ugandan from fuel supplies, whom they blamed of having tendencies of increasing fuel prices as result of Government decision to increase excises duty on petrol and diesels products on the local market.

Source: East African Business Week

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