Gov’t to choke citizens on pile of taxes

Uganda Taxes 2016

Uganda Finance minister Matia Kasaija seeks to amend the Excise Duty Act 2014 to increase taxes.

These will tagert all types of cigarettes, ready-to-drink spirits, cement, motor spirit (gasoline), gas oil (automotive, light, amber for high speed engine), cane or beet sugar and chemically pure sucrose in solid form, motor vehicle lubricants, confectioneries (chewing gum, sweets and chocolates).

Daily Monitor quotes ministry spokesperson, Jim Mugunga, saying the “minimal tax increases” is not about political honeymoon ending but that it’s about Uganda working on its tax collection efficiencies so that we all pay a fair share of our obligation to national revenue.

In the Finance (Amendments) Bill, 2016, Kasaija also proposes to increase the rate of the environmental levy imposed on used clothing, used shoes and other used articles from 15 per cent to 20 per cent of the Cost, Insurance Freight (CFI) value.

Taxes will be charged on the importation of un-denatured alcohol, lubricants, steel and steel products, electronics, including fridges, washing machines, radios, DVD Players and television sets, paper and paper products and diapers, the newspaper reports.

The minister has proposed that these items be removed from the COMESA waiver as well as removing excise duty on specialised hospital furniture and international incoming calls and waived Value Added Tax (VAT) on agricultural processing machinery.

Mugunga says Rwanda collects about 16 per cent of GDP while Kenya is at 20 per cent while Uganda on the other hand collects 13 per cent, far lower than most sub-Saharan Africa given its average.

Proposed new taxes

  • Soft cap Shs50,000 per 1,000 sticks (cigarettes)
  • Hinge lid Shs80, 000 per 1,000 sticks (cigarettes)
  • Cigars, cheroots and cigarillos containing tobacco 200 per cent
  • Smoking tobacco 200%
  • Homogenised or reconstituted tobacco 200%
  • Other 200%
  • Ready to drink spirits 80%
  • Cement Shs1,000 per 50kgs
  • Motor spirit (gasoline) Shs1,100 per litre
  • Gas oil (automotive, light, amber for high speed engine) Shs780/- per litre”
  • Cane or beet sugar and chemically pure sucrose in solid form Shs100 per kg
  • Motor vehicle lubricants 10%
  • Confectioneries (chewing gum, sweets and chocolates) 20 per cent
  • Increase the rate of the environmental levy charged on used clothing, used shoes and other used articles 15 to 20%

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