Uganda: Museveni Makes U-Turn On MPs Tax Exemption

After condemning legislators' contentious tax deal as "politically and morally incorrect", President Museveni has softened his stance on the proposed amendment to income tax law.

Daily Monitor understands that when the matter came up for discussion during the NRM Caucus meeting at State House last Sunday, President Museveni tasked the prospective Speaker of the 10th Parliament, Ms Rebecca Kadaga (Kamuli Woman) to explain why MPs don't want their emoluments taxed.

According to MPs who attended the weekend caucus meeting, Ms Kadaga, who chaired the session that amended the Income Tax Bill to exempt MPs allowances from taxation, made a presentation in which she "ably" defended the House decision, explaining how since the 6th Parliament, respective Attorney Generals save for one, have advised that under Section 19 of the Income Tax law, mileage is exempted from taxation. Ms Kadaga also explained that MPs already pay income tax of more than Shs3m per month.

The President told members that he was not aware that what was being taxed was mileage allowances and in spite of refusing to sign the proposed amendments to Income Tax law and throwing it back to Ms Kadaga, he promised to talk to "[ministry of] finance people" about the issue because he too, thinks it's wrong to tax mileage.

The President's "friendly" comments according to sources, triggered applause from the members, in an apparent appreciation of his support on a matter that had threatened to constrain the relationship between the Executive and Parliament. The MPs had vowed to pass the Bill, with or without the President's signature.

The Background

Early this month, Mr Museveni wrote to Speaker Rebecca Kadaga warning that MPs lack the "moral right" to exempt any of their emoluments from taxes and that by doing so, they "would send a bad message" with other Ugandans joining the bandwagon to demand a freeze on their emoluments.

Asked why the President is changing position, the Minister for Presidency, Mr Frank Tumwebaze, said it's about the principle and not details. "The President was and is still opposed to a general blanket exemption on the remuneration of an MP as had been projected by the media and civil society organisations. But on getting additional information to the contrary, he appreciated the logic."

Some members of the Civil Society, who led a nation-wide campaign against the MPs tax exemption deal, yesterday criticised the President's U-turn as unfortunate and accused the MPs of using mileage to hoodwink the President yet the crux of the matter is on blanket exemption of MPs allowances through "unexplained" consolidation of their pay.

During the consideration of the tax Bills in the 9th Parliament, Rubanda East MP Henry Musasizi, moved the disputed amendment to Income Tax (Amendment) Bill 2016, in which Parliament amended Section 21 (1) of the Income Tax Act, Cap 340, to exempt the employment income of members of Parliament, except salary. This move however, provoked public outrage and projected parliamentarians as "greedy and insensitive" to the plight of the poor.

Source: The Monitor

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