Youths support more tax on alcohol

A group of Youth Activists have appeared before the Parliament Committee on Finance defending the proposal by government to increase tax on Alcohol.

The State Minister for Planning, David Bahati told the committee on Tuesday that Government will introduce equivalent tax rates for ad valorem rates on spirits and wines and excise duty on opaque beer (Kibuku) to generate Shs 5bn and Shs 2.3bn respectively.

The Executive Director, Uganda Youth Development Link, Rogers Kasirye argued that there is need to increase tax on alcohol and all beers to reduce on the consumption rate as well as improving on the food security in the country.

Kasirye argued that despite Uganda being ranked highest in alcohol consumption, less revenue is being generated from the sector as compared to other countries in the region.

“Alcohol industries are the largest revenue producers according to the 2016 statistics where Rwanda collected 16% out of $8.37bn, Tanzania collected $47.43bn, Kenya collected 20% out of $70,529bn while Uganda collected 13% out of $25.53bn far lower than most sub-Saharan African countries,” Kasirye said.

Kasirye said that there is a lot of untapped revenue lost as a result of low percentage of taxes levied on alcohol hence the need to align the tax regime to other East African countries.

On the call by local beer producing companies to have a reduction on the tax, Kasirye said that their call should not be adhered to since the production of beers has greatly affected the food security in the country.

“This type of beer like Kibuku and Engule is interfering with the food production, cassava was the food granary; the reason why sometimes we have food shortage is because farmers are selling all the cassava and sugars to beer companies,” Kasirye noted.

Kasirye told committee members that government should not be taxing beers only but the alcohol content in the beer observing that sometime the alcohol content indicated on the packaging doesn’t tally with what is contained in the bottle.

“Government should not tax bottles by volume but the amount of alcohol content in the bottle; we want more food production and security.”

He added that “We want government to make more revenue from alcohol like it is done in other countries in the region, there should be no tax exemptions and should include public health aspect when addressing Alcohol.”