Government urged to widen tax base

Private Sector Foundation Uganda (PSFU) has advised government to consider widening the tax base other than increasing and introducing new taxes each financial year.

Gideon Badagawa the Executive Director PSFU  made the proposal while appearing before the Parliamentary Committee of Finance to deliberate on the new taxes that have been introduced in the budget for the financial year 2018/19.

“This burden is then being shifted to a few Ugandans that have registered their businesses and companies who have dedicated to paying taxes,” Badagawa said.

Badagawa argued that there are many producing companies and individuals that are not approached by the tax collection body and in that way, they end up dodging taxes.

He says a number of business in the informal sectors have been left to operate without remitting taxes hence suppressing the few.

“Government should widen the tax base by including every Ugandan in business to participate in paying taxes as this will reduce the country’s tax burden that has been shifted to a few,” Badagawa said.

He further adds that “We have seen a number of firms not being taxed while others pay tax within the same sector, I will give an example of the water industry, we have more that 130 water manufacturers and bottling plants but only around 18 are taxed since their locations are known,” Badagawa observed.

He noted that these small firms are not meeting their tax obligations, advising government to crack down on the many manufacturing enterprises which don’t pay tax.

Notably, PSFU expressed reservations over some of the new proposed taxes arguing that the new taxes greatly affect the private sector in the country.

They noted that the proposed tax on Mobile money commissions as well as transactions will affect innovations in the ICT sector that would attract the booming of business.

The committee continues to interact with several stakeholders over the new proposed taxes and tax bills before coming up with a final report that shall be shared with the entire house.