Reports from Parliament indicate that MPs are plotting to amend the Income Tax Act Sec 21, to have Parliament listed among the institutions to be exempted from tax.
According to the Civil Society Budget Advocacy Group (CSBAG), this debate is to surface on the flow of Parliament when the Income Tax Bill debate resumes.
This follows a Commercial Court ruling in February this year, in which Justice Henry Peter Adonyo ordered the Parliamentary Commission to deduct tax from MPs’ emoluments and further ordered that all taxes owing and due to the Government of Uganda be collected and remitted to URA from 2004.
Since 2004, Members’ salaries and emoluments had been exempted from Income tax.
This was however challenged in the Commercial Court in 2013, hence last February’s ruling, reversing the policy.
Members of Parliament are allowed by the constitution under Article 85 (2) to determine their own pay.
The House’s latest move however has sparked anger amongst the civil society, who termed it as unconstitutional.
“As citizens we find this move deplorable given that it’s happening at a time when we are encouraging every Uganda citizen to pay their fair share of taxes,” said Julius Mukunda the Coordinator, Civil Society Budget Advocacy Group (CSBAG)
The Commercial Court’s ruling is believed to have prompted MPs to plot a move to exempt their allowances/emoluments from being taxed through amendment of the Income Tax Act.
Last month, President Yoweri Museveni while meeting MPs from the National Resistance Movement in Kyankwanzi elected in the February elections, warned that there would be no salary increments for Members as has been the norm in the previous terms.
“What I want you MPs to avoid is to demand salary increment,” said the President during his lecture on the third day of the Kyankwanzi retreat. “It is bad politics.”
The president stressed that resisting the temptation of asking for a pay rise by the members would be the ultimate test of their patriotism.
Amendment Implication
Each MP should be paying UGX 9 million out of his/her total monthly salary and allowances as taxes.
This would come to UGX 41.58 billion annually if all MPs paid their taxes every month.
“This amount of money would pay 4,208 medical workers annually,” says CSBAG’s Mukunda.
“In the Budget FY 2016/17, Government has a funding shortfall of UGX 35bn to recruit extra 3,542 medical workers. This short fall will mean that all the plans under way in provision of quality health care will be crippled.”
He added, “We wish to remind MPs that it’s a negation of their duty if they decide not pay their fair share of taxes and leave this burden to the poor people they represent. Effort by URA to widen and deepen the tax base will be dampened if this clandestine move by “honorable” members especially now that the demand for better services is geared up.”
“The MPs will lose the moral authority to demand for better service delivery to which they do not contribute.”
The organization thus called upon the Speaker not to entertain this discussion as this will dent her speakership bid.
“We also call upon the president to reign in on MPs who want evade and to rob the country of much need resources.”