Uganda: How New Budget Will Affect You

If you drive, you will, with immediate effect, pay Shs100 more on each litre of fuel you buy, and if you smoke, the price per 1,000 sticks has been put at Shs50,000 and Shs80,000 for the low class and high class smokers, respectively.

The changes were confirmed yesterday when the President, through Buyanja County MP Matia Kasaija, presented the new taxes that will help government fund the more than Shs26 billion Budget for the Financial Year 2016/2017.

The Budget was already passed by Parliament last year, the reason the presented taxes take immediate effect.

However, the tax announcement that drew murmurs of disapproval from the audience was the raising of taxes for personalised car registration number plates from Shs5 million to Shs20 million.

Other tax increments were a 20 per cent raise in the price of sweets and cakes. Alcohol was not mentioned. There will also be a 1.5 per cent tax on stamp duty on transfer of property.

The Budget, however, gives a breather to a series of businesses, especially through tax reliefs.

“The tax measure… will facilitate investment, including emerging industries, particularly in the petroleum industry, mining and construction sectors,” Mr Kasaija said.

He added: “The strategy for the Financial Year 2016/2017 is to expand the tax base by gradually formalising the informal sector, improving efficiency in tax collection and compliance,” and that “government’s plan is to raise the revenue ratio from 13 per cent to 16 per cent of the GDP by Financial Year 2019/2020.”

Tax relief plans

Those who will benefit from tax reliefs include; taxpayers who merge or acquire loss-making business and continue to operate the same businesses after the transaction.

Such a move, the President said, will promote Uganda’s investment climate and facilitate mergers and acquisitions.

Also, producers of solar, wind and geothermal energy will be allowed relief on VAT incurred on their business inputs in order to reduce the cost of production of alternative sources of energy.

Speaking after the Budget presentation, President Museveni warned telephone companies, which he accused of perennially evading taxes that government will soon get a solution to stop the haemorrhage. “Those telephone companies make three million international calls and declare one million. We lose more than $400m in taxes annually. We shall buy a high tech machine to track all the calls that come in,” he said.

Source: The Monitor

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