Wednesday 27th October, 1993
The Council met at 2.30 p.m. in Parliament House, Kampala.
PRAYERS
(The Vice-Chairman, Al-Haji Moses Kigongo, in the Chair).
The Council was called to Order.
BILLS
SECOND READING
THE FINANCE BILL, 1993
THE MINISTER FOR FINANCE (Mr. J. Mayanja Nkangi): Mr. Chairman, the hon.
Members, I beg to move that the Bill entitled: ‘The Finance Bill, 1993’, be read a Second Time.
DR. TIBERONDWA: Point of order. Mr. Chairman, is it in order for us to debate this
important Bill when this House does not have a quorum?
THE CHAIRMAN: We adjourn the Council for 15 minutes.
(Adjournment for 15 minutes).
BILLS
SECOND READING
THE FINANCE BILL, 1993
THE MINISTER FOR FINANCE (Mr. J. Mayanja Nkangi): Mr. Chairman, hon. Members, I
beg to move that the Finance Bill entitled, ‘The Finance Bill, 1993’, be read a Second Time.
THE CHAIRMAN: Order please.
MR. MAYANJA NKANGI: Mr. Chairman, hon. Members know from the memorandum to the
Bill, the general reasons or purposes of the Bill. So, I will not bother to remind them. You recall
Sir, that in the budget speech, I announced that the thrust of this year’s budget is mobilisation of
domestic resources in order to reduce the heavy dependency of deficit financing and dependency
on deficit financing and external funding by our country. As a strategy, I did indicate that our
efforts would be geared to broadening the tax base in order to reduce the current reliance on a
narrow range of taxable products. This strategy is embodied in the Finance Bill, which the hon.
Members have had sufficient time to study and are about to debate. The strategy is indeed, the
various cross section measures in the Finance Bill itself. In addition, the results mobilisation, the
taxation proposals aim at:
i)
Effecting equity to ensure that the tax burden is shared by a broad section of our
population;
ii)
Giving relief taxpayers so as to improve their welfare of standards of living; to increase
productivity; to encourage savings; and to promote investments;
iii)
Stimulating production in order to increase the supply of goods and services;
iv)
Promoting tax compliance; and
v)
Continue with the process of tax recall in order to simplify the administration of tax load.
As hon. Members may by now have realised the Finance Bill contains errors and omissions. I
shall, therefore, at an appropriate moment, move Amendments to rectify the relevant errors and
omissions. I shall also be introducing technical Amendments required. One, required to
rationalise the Finance Bill, so that it is consistent with other tax roles. Two, to provide the legal
machinery for the full realisation of intended Government goals. Hon. Members, taxation
measures introduced in this Financial Year, are tied to the Budget estimates that you recently
approved.
The realisation of the budget estimates will depend on our capacity to generate the expected
revenue. Failure to do so, will lead to the stalling of some priority in development programmes,
which will be disastrous to our development and to the delivery of Government and other
services. I, therefore, most strongly argue youths, to treat the budget as a package and support
taxation measures, in the same way as you supported the budget estimates.
Sir, let me now advert to specific sectors of industry which have caused a bit of anxiety, should I
say, to a section of the industry of taxpayers. I am referring Sir, to the Beverages Industry. The
1993 budget introduced significant changes in the levels of excise tax. The budget fixed the
excise tax on cigarettes, beer, with spirits at a level of 100 per cent, while that of soft drinks was
raised to 50 per cent. As will be aware, the industries affected by these changes have expressed
concern at the impact of these taxes on sales and profitability. With the agreement of the
manufacturers, we at the Ministry of Finance have investigated these concerns in close
consultation with the relevant companies, in order to assess whether any revision of the prevailing
excise rates was inquired.
Specifically, with again with the agreement of the relevant companies we have investigated the
question whether or not the industries affected by the excise taxes changes, were continuing to get
even and as far as possible, achieve a profit, at least, equivalent to a risk free financial rate of
return. In other words, whether or not to compliance could continue to keep their heads above the
waters or to speak. I wish to report to hon. Members the principal findings of these
investigations.
First, the Tobacco Industry. In the case of the cigarettes industry, the company had stipulated that
a return of capital of 20 per cent is required in order to cover the risk of the continued investment
in Uganda, in excess of the best rate of a return equivalent to a risk free, real financial rate of
return. The latter has been calculated to be five per cent. I do not wish to report that on the basis
of company’s own data, it has been calculated that the company presently enjoys a return on
capital, considerably in excess of such target rate.
Alternatively, the company is enjoying a free tax rate of return of 55 per cent, equivalent to 39 per
cent after corporation tax. This exceeds the company’s own stipulated target by a very
considerable margin. This calculation has been carried out on the basis of the level of the sales
achieved since the introduction of the new tax rates in July this year and assuming no growth in
sales during the course of this financial year. Such an assumption, however, is highly
conservative. In practice, growth of at least, five per cent can be expected during the coming
months, further inclusive the company’s profit margin. The calculations have been based on the
company data and fully shared with the company itself for their comment at each stage of the
analysis.
On the basis of this evidence and after weighing carefully other arguments offered by the
company, the team investigating this case could find no justification for reducing the present level
of the excise tax on cigarettes. In other words, the Tobacco Industry can continue to function for
the benefit of the country before its own shareholders.
Distilleries. In the case of distilleries, it has been calculated that the budget measures have indeed
has an adverse effect on the industry to the extent that the sub-sector currently faces a significant
losses. This is particularly because of crude waragi be a strong substitute for distilled spirits. In
view of its unique state, the difficulties faced by the distilleries sector and the relative lack of
capacity to absorb such shocks, following major new investment in rehabilitation of industry, I
have decided to amend the excise tax applied to spirits industry to the level prevailing before the
1993/94 Budget. That is to say, the level before the July Budget speech.
I would like to remind hon. Members that here, there are only two companies alternating International Distilleries and West Nile Distilleries. Now as for the soft drinks, in the case of soft
drinks, I wish to draw the hon. Members’ attention a few salient facts on recent performance of
the sector. Since the Budget, sales of soft drinks have continued at a level of 44 per cent, higher
than in the same period last year. We have –(Interruption)
THE CHAIRMAN: Order please.
MR. MAYANJA NKANGI: Taken specific measures with the officials of these companies to
verify the facts and I think therefore, it should be believed. We have seen as I said, the sales of
soft drinks have continued at a level of 44 per cent higher than in the same period last year. We
have seen new investment in the sector pursued vigorously since the budget. With the recent
entrant in the industry, now poised to launch a new product. This is a health development, which
is extremely gratifying. Century Bottling Company has recently concluded an agreement on a
substantial new investment on Coco Cola International.
Clearly, and concretely, therefore, these recent developments are not symptoms of an industry in
the doldrums or facing a crisis of profitability. The circumstances of each firm in the sector have
been examined and has been calculated, that the industry of the sub-sector on average is earning a
few tax rate of return in capital of 33 per cent or 23 per cent after corporation tax. These rates
assume no growth in sales from the present pre-budget level during this financial year. In
practice, however, continued growth in sales of at least 10 per cent is considered very likely,
which will further increase the industry rate of profit and the basis of these findings and in the
light of other recent evidence, by the investment in the sector, I have concluded that no case
exists for a revision downwards in excise tax or sales tax in soft drinks at this time.
Beer. Investigation of the present position of the beer industry is still in progress and does not
wish to prejudice the outcome of this scrutiny by a statement today, regarding appropriate levels
of excise tax or sales tax for this product. The investigating team is still awaiting data required
for their analysis. The companies concerned have under taken to supply this data and it is
expected that this will be received very shortly and that the analysis will be concluded a few days
from now. Any reduction in the excise tax or sales tax that might be warranted on the basis of
this investigation, will be implemented immediately in accordance with the executive powers
vested in the Ministry of Finance, according to the existing law.
Now, the cost of education. Government is concerned with the cost of education and I shall
explore ways of reducing this cost in as much as it is affected on merited by taxes. For example,
taxation of raw materials used in schools, like import and excise duties on school exercise books,
I shall investigate that with a view of reducing these rates to help reduce the cost of education.
Now, I want to run specifically to some of the Clauses in the Bill and do something about them.
First of all, Clause 3. Clause 3 amends section (ii) the Income Tax Decree, section (ii) is the
definition section. The phrase ‘Commissioner of appeals’ was deleted because it was substituted
by ‘Local Committees for Commissioner of Appeals’. Therefore, the definition has been
superfluous and left hanging without referring to any provision of the Decree.
The rates of tax are provided in the Third Schedule of the Decree. Initially, they were five
paragraphs representing individual rates of tax, corporation tax rates, non-resident tax rates, interrate tax rates and resident with holding tax rates. The paragraphs are now four with deletion of
the inter-state tax rates. According to paragraph five, that is resident withholding tax rates,
becomes paragraph four.
Clause 4 of the Bill. Clause 4 amended the Decree in Section 5, sub-Section (ii) (c). It provides
that compensation paid to termination of a contract is gains or profits liable to taxation. This
means that such compensation will be liable to taxation in the year in which it accrued and not the
year which it was received. The Amendment makes such compensation liable to taxation at a
time when it is received.
The new paragraph (f), being introduced by sub-Clause (ii), of Clause 4, with monitorisation of
benefits. This means for purposes of taxation, the value of premises provided by an employer to
an employee, for residential purposes will be monitorised and added on to total emoluments for
tax purposes. Clause 4 of sub-Section (c), is amending the provision to paragraph (h) of subSection (ii) of Section 5. For the purpose of taxation, paragraph (h) provides that housing
allowances paid by an employer to an employee is part of his income. The new provision
highlights the relief, which is granted to an employee who receives rent in certain circumstances.
Clause 4, sub-clause (d), intends to amend sub-Section 3 of Section 5. Sub-Section (iii) lists
employment benefits that are not liable to taxation. The amendment is to make provision for
giving relief, lunch and transport allowance not exceeding Shs. 30,000/= per month, which had
hitherto been part of an employee’s taxable benefit.
Clause 5 of the Bill, proposes to amend Section 8 sub-section (vii), which original content was
that, the first Shs. 5,000/= on total pensions paid to a non-resident person is not income
chargeable to tax. This was a very generous provision to non-resident persons who actually
receive such pension as a result of employment in Uganda when residents are taxed. The
Amendment is to rectify this anomaly, but it gives a reasonable relief of 50 per cent of the
pension.
Clause 6 of the Bill has the objective of amending section 14 of the Decree and Section 14 deals
with ascertainment of total income and liable deduction. This is deducted from the taxpayers
total income liable to tax. Sub-section 8 of section 14 had been deleted by the Finance Decree
1975. The new provision in the Bill provides that, no reductions should be made in respect of
rental income. The reason is that, rental income has a different rate structure with deduction in-
built therein. Clause 7 of the Bill is to amend Section 40 of the Decree. It deals with the rates of
tax. The amendment is - that is to say; the provision is to cater for the legality of the peculiar
taxation of rental income.
Clause 8 of the Bill seeks to amend section 41 of the Decree. Section 41 (iv) sub-Section (iv),
provides for Government local authorities, parastatal company or companies, institutions to with
hold two per cent from payment they make for execution of contracts. However, the word
institution had been deleted in an earlier amendment, thus removing their obligation to withhold.
Secondly, all institutions rather than those designated by the Minister should withhold tax that is
being done away with.
Clause 9 of the Bill seeks to amend Section 58. This section provides the period in which to file
returns. It is usually the 31st of October of the immediately succeeding assessment year. This
gives a taxpayer four months, if his accounting year corresponds with the assessment year or
fiscal year, and it gives him four months to file his returns. However, if his accounting year, say,
ends in October, he can hold on to review - hold on for revenue for more than 12 months. In
order for the time of filling returns to be equitable, for all taxpayers, the proposed amendment
seeks to give other tax payers, whose accounting period does not coincide with assessment year give them the same period of four months as stipulated by those whose period coincide with the
assessment year.
In Clause 10 of the Bill, this has the intention of amending section 78 of the Decree that deals
with additional tax in event of failure to furnish or file returns. It was observed that the additional
tax of 5 per cent on failure to furnish returns was high especially with reduction of inflation and
interest rates. The rate of 2 per cent being proposed in the Bill was considered adequate.
Clause 11 intends to amend Section 89 of the Decree. Section 89 provides for any person who
disputes an assessment made upon him to object within 60 days after date of service of the
assessment. This period is deemed to be too generous as it delays the expeditious conclusion of
cases, and secondly, the person who is object should have his grounds ready and the preparation
of documents should not take such a long time like 60 days. To promote efficiency therefore, on
both sides the period is being reduced to 30 days.
Clause 12 seeks to amend the time within which tax charged in any assessment should be paid.
Under section 98 of the Decree, it was 60 days but it is proposed that it should be reduced to 30
days. This is to discourage people from holding on to government revenue leading to its
misappropriation. This is, in any case, a further period of one month after the four months
allowed to a taxpayer to furnish his returns after the end of the Decree. This is the Section that
demands for Income Tax clearance on people traveling abroad. This is being done because of the
general improvement in the administration of taxes by the Uganda Revenue Authority.
Clause 17 of the Bill proposes to amend Section 2 of the Decree. Under Section 2, CTL is
supposed to apply only to persons ordinarily engaged in the performance of services as a way of
business or trade. The word ‘ordinarily’ meant that persons who engage in performance of
services occasionally were outside the ambit of the law. Clause 17 (b), amend Section 2 (b)
which provides that the CTL is payable by the performer of the services who has a discretion to
pass it on to the consumer. This creates uncertainty in the law, as to who is actually supposed to
pay and remit the levy. The proposed amendment puts the owners of collection and remission on
the performer. Sub-Section (ii) of Section 2 of the Decree gives power to the Minister to provide
for another person to pay the levy. The amendment in Clause 17 (c), seeks to give these powers
to the Commissioner General of the URA.
Clause 18 of the Bill adds a new sub-section (iii) to Section 4 of the Finance Decree. Section 4 of
the Finance Decree requires performers of services to use receipts to scribe by the Commissioner
General. The new sub-Section (iii) intends to give powers to the Commissioner General to
exempt certain persons - for instance lawyers, surveyors and other professionals from the above
requirement.
Clause 19 of the Bill, seeks to amend section 7, sub-section (i) of the Decree. Section 7, subSection (i) provide that where an advertising service is rendered through an agency, the levy is
charged only in respect of the transaction through an agency, the levy is charged only in respect
of the transaction between the agency and the operator of the medium. The gross amount paid on
the transaction before deduction of any commission is liable to the levy. This avoids double
taxation. The amendment, therefore, in Clause 19 of the Bill, intends to extend this relief to other
services operated through agencies.
Clause 22 of the Bill introduces a new Section -(Interruption)
DR. BYARUHANGA: Point of order. Mr. Chairman, with due respect to the hon. Minister’s
presentation, I think this side we are a bit disadvantaged because he is facing the other side. The
distribution of sound - we cannot follow his - maybe if he stands in the centre of Parliament. We
cannot get him this side. Thank you.
MR. NEKYON: Point of clarification. Could we know in what language the ‘Katikiro’ is
addressing the House? (Laughter)
MR. MAYANJA NKANGI: Mr. Chairman, -(Interruption)- Okay, at least I can inform you - I
have always noted the brilliance of hon. Nekyon since April, 1962 when we first came to this
Parliament, and I want to tell him that at least, I was not addressing the Chamber in Langi.
Clause 22 of the Bill introduces a new section 11(b). The Section gives power to the
Commissioner General to refrain from collecting CTL in certain instances.
Clause 23 of the Bill amends Section 13 of the Decree that provided for the Ministry of Finance
to establish VAT Statutory Order. Appeals tribunals to consist of a Judge and two other
members. The new Section intends to expedite the process of appeals by introducing
administrative machinery. As it can be discerned, it may not be easy to have access to a judge.
Sir, you may notice that I am not commenting on some of the Clauses because I think those are
easy to follow.
Clause 28 - amend Section III of the Excise Tariffs Act by introducing Excise Duties on the
imports. This is to ensure that domestic consumption of luxury goods is taxed at an appropriate
rate after Customs Duty on a number of luxury goods have been reduced.
Clause 29 delete Section 21 of the Finance Statute, 1993 which had introduced abolition of
Import Duty on industrial materials. Clause 30 of the Bill gives the Commissioner General
powers to detain goods that have been under valued. He is also given powers to sell such goods
where the taxpayer insists that his declared value is the true value of the goods. At the
Committee Stage, I intend to propose certain amendments to the Finance Bill, which have already
been circulated to hon. Members, and I think I should leave it at that. I should have to say what
part these amendments are. At that stage Sir, I beg to move. (Applause)
THE CHAIRMAN: I now propose the question and invite the hon. Members to speak, ‘The
Finance Bill 1993’.
MR. MANZI TUMUBWEINE (Rukiga County, Kabale): Thank you, Mr. Chairman, I rise to
support the passing of this Bill, which I thought would have become long ago, because since we
have Committees, we should have been faster and been able to pass the budget within three (3)
months rather than four months as it is expensive to keep the whole House debating one Bill or
one issue for a long time. I do realise that the tax base in this economy is very narrow. I also do
realise that the tax base in this economy is very narrow. I also do realise that we need to raise
enough money to cater for the services.
Nevertheless, we must look at the difference between tax deepening and tax widening. In other
words, if we are going to have tax widening, we should ensure that we include more people in the
tax net rather than deepening the taxes for the few that are already in the net.
Considering that taxation is a tool for development, we should ensure that taxation increases
employment and does not reduce employment because if it reduces employment, we increase the
social burden and therefore we encroach more on the resources that we are trying to collect,
hence creating a worse situation than the beginning.
I also do appreciate that the costing of various industries might not be perfect. In other words, the
companies or the business that are in the country might not be doing the job that they should do
and they might be lumping too much of their personal costs on the companies. Nevertheless,
trying to correct the situation of that nature in one single budget creates a crisis because (Applause)- if you try to correct a situation that has been persisting for a long time in one single
go, you create a situation that disturbs the system and creates negative thinking about the budget
and its aftermath.
I wish to appreciate that the Minister of Finance has been able to come up with the Fourth
Schedule which is more comprehensive and up-to-date. I hope every Member has got it and I
think it is helping us. However, we still have got an old Income Tax Decree, 1974 which we
think should be updated and put to date and then people can have it updated, and I am convinced
that many of us here do not have this booklet because they are out of print. I am sure if they were
updated, it will be of great help for us because it is one thing to come here and have a Finance
Bill and amending Bills - other old Bills when we do not have them.
It is almost very difficult to get the Finance Decree 1972, you have to hunt for it and they are very
few in the country and yet in Section (3) of this Bill, we are busy amending a Decree which most
of us have not seen. I have asked this one before and I wish to put up my appeal again that the
Finance Decree 1972, Income Tax Decree 1974 should be updated, made available and we buy
them, because it is no use amending Bills and Decrees which are not easy to come by even in our
Library they are not there.
On the question of Pay As You Earn (PAYE), I think that the salaries we pay in this country are
very low and yet the threshold is made such that actually it takes away even the little that there is
and yet in development you need the purchasing power. If you look around a person who gets
70,000/= which is not even enough to take him for two weeks and that is the -(Interruption)- it
depends on where you are; 70,000/- is still too low, and I believe the Minister of Finance can
consider increasing the threshold for Pay As You Earn to be able to give some more income to
the people who actually earn ordinary incomes and have no other sources of income.
In Decree Section (5), the Minister is trying to amend so as to create a situation where wages and
salaries are treated as profits. I do not believe that salaries and wages are profits, and if we treat
as such for purposes of taxation, then we are punishing the people who earn wages and salaries.
In the Section on rent income, which is being amended in this Decree here, we are considering all
rent income as profits and it is said that if you are living in your own house and your employer is
paying you a salary, the rent that will be considered for not being gains will be 50 per cent of
your salary. If our salaries are already too low, - 20,000/-, 30,000/- and you are living in a house
of 70,000/-, 80,000/-, it means you are actually going to pay taxation on the income that you are
not getting and if you do, it means you are going to have a problem because if you are taxing
somebody on imputed income and it is not in actual cash income, then of course you are saying
that you must look for that income from somewhere else to be able to pay tax.
In Section 78 of the Decree, sub-Section (a) which is being amended - the older section said to
‘furnish a return of income or to give a notice to the Commissioner as required by Section 58 of
this Decree, shall for each period of 12 months or part thereof, during which such failure
continues be charged with additional tax equal to 5 per cent of the normal tax.’ But now we are
amending it to say that ‘you will be charged two and a half per cent per month.’ That means you
are being charged 25 per cent of the normal tax. That is extremely very high tax and that is a very
high penalty for failure to pay because if you over charge a penalty which is so high, then of
course you create loopholes - either for corruption or arrangement or for trying to avoid because
if it becomes too high, then you are giving some other people a chance to try to see what they can
do with it.
In Section 2 of the Finance Decree, 1972 - sub-Section (b), ‘charging CTL in Section (a) shall
apply only to persons ordinarily’ that is okay, but Section (b) says, ‘shall be payable by the
person performing the service.’ That was the original part of the law. Now, we are changing it
and saying that people who pay the CTL should be those that receive the service. The problem
with this is that the people who actually are charged the CTL, do not get the receipts for that
CTL. The people charging them for CTL, actually pay on their behalf and do not give them the
receipts and at the end of the year, they are unable therefore to use those receipts to present for
their income tax calculations and this creates a problem because you have paid a tax for which
you have no receipt and, therefore, at the end, you cannot claim that you pay the CTL and,
therefore, you should be given a chance to say I actually paid this tax. Some of us have asked
those where we pay CTL and said why do not give me a receipt and then they say, well the
Revenue Authority does not give them back. I think, it this is the case, then the person paying then we should maintain the old law and say CTL shall be payable by the person performing the
service not the person receiving the service.
I hope the Minister will accept these amendments to reduce the license fees for motor vehicles,
which I think were excessive previously, although so many people have already paid and I do not
know what he is going to do for them but they have already paid. I think they should be
considered a credit for what they have paid, although it is very difficult to normally return taxes, I
know that. Mr. Chairman, with those few remarks, I wish to support this Bill and I hope that we
shall pass it very quickly.
MR. KARUHANGA: Point of Procedure. Mr. Chairman, I thought that since we have a
Committee of Economy which has been studying this Bill, it would be a good idea for us to hear
the results of the surgery of the Committee of Economy from the Chairman and then after he has
spoken, then we Members having been briefed, now having heard the Minister for those who
heard him and those who will have heard from the Chairman, then we can engage in a reasonable
debate. Is it not right that the Chairman of the Economy comes here and tells us the results and (Interruption)- the Sectoral Committee - yes.
MR. OBWANGOR: Point of Clarification. The hon. Karuhanga tends to be ahead of us in
Procedure. This is a Bill. A Bill is committed to the House. Mr. Chairman, whereas the Bill is
committed to the House, it is not the right of the Committee; it is for the House because it is
moved to the House.
MR. ELYAU (Kalaki County, Soroti): Thank you, Mr. Chairman, I rise to support the Bill, but
with serious observations. Whereas it is our interest to look for money in this taxation to develop
this country, may I ask that time has come when we should serve all parts of Uganda equally.
Last Saturday, it happened to be that I was moving from Soroti towards Otuboi, I found trailers
coming from Sudan, others from Lira, stuck between Soroti county and Kalaki County and that
the wanainchi who were driving back to Lira wanted to beat these Basomalis that why did they
pass there with the trailers, because the road is already narrow enough, impassable, it is becoming
a path and we are getting ashamed as leaders.
So, these are the things, which I say although we get taxation done, we must realise that the
service for all must apply to every corner of the country. So, Lira/ Soroti road must be given
priority. In taxation I was surprised to hear that the farmers have been accused of not being taxed
properly. By the way, I am asking, what assistance is Government giving the farmers? So long
as farmers remain even without their produce being sold! These are the economic players, and
we are saying they should be taxed.
As I am telling you, our children have come back from Senior Secondary School in thousands,
and they are now at home! We cannot raise fees; I have also got four, and I cannot raise fees.
Members of Parliament here are starving, there is no food, and you say the economy is
performing. This is a very serious matter, and we must be consistent if we are going to have this
taxation properly. Now -(Interruption)
MR. ADYEBO: Point of information. Mr. Chairman, I think the hon. speaker is not very fair to
himself, as well as the Government because of the following: One, he is raising an issue of an
impassable road, and he is very well aware that, that very same road he is talking about is catered
for substantially beyond reasonable doubt under the Northern Uganda Reconstruction
Programme. As I speak now, well, we are begging from the World Bank, and you cannot expect
us to spend money, as I talk now that road, that is Lira/ Soroti road is already bided for and the
matter is now with CPB, and the hon. Member is coming from the Northern Uganda
Reconstruction area, like Soroti District which is catered for under this package.
Secondly, he is also raising the question of the problem of the farmers who up to now according
to him have their crop unbought. With due respect this has been a national problem, the problem
of Crop Finance, but due to the process of liberalisation which is a Government Policy, I am
happy to report to you that two days ago, I was in Nebbi District which is one of the districts
which had hit hard by this perennial problem of Crop Finance, but thanks to the liberalisation
process.
When I went there, two days ago, I found that this problem that used to hit Nebbi is now no more,
because the private buyers have been encouraged to go there to Nebbi. They are now there, and
they have bought all the crops and there are more buyers than the crops that have been produced
now. I want to plead with the hon. Members that as leaders of this country, they are part and
parcel to help the peasant farmers, but they should not behave like school children always
complaining -(Interjection)- yes, we have put in place this liberalization process. Because as a
leader, for example, I will continue -(Interjection)- I am saying so because we have put the
process of liberalisation, whereby we want the leaders right from here and below to assist the rest
of the ginneries. When we are going with the liberalisation policy, some of them behave as if
they should own perpetually those ginneries.
In some parts of Uganda, we still have this problem, but in places like Nebbi, I am talking about
the problem as settled. As I talk now, there are so many investors who are coming, and I have
been talking to a few who are moving even to North-eastern Uganda, and others would like to
participate in the rehabilitation of the ginneries so that they start to process, to buy, to gin and to
export cotton. I expect, therefore, the cooperation of all these who are involved including the
political leaders, and let us not be just complaining to Government as if there is a group off few
people only running the affairs of Uganda. Hon. legislators are part and parcel of helping in this
process. But I am glad, that this problem has been handled satisfactorily. I have witnesses here,
and I have hon. Members from Nebbi, here, I was with them. The problem of Crop Finance is
being reduced, but we cannot reduce it over night.
Now, he is also complaining that whereas we are saying the economy has improved, there is
nothing to show. I would like to inform you with due respect that for the first time on record, we
have over 100,000,000 dollars as the reserve with Bank of Uganda, and for the first time, due to
liberalisation. This I am telling you hon. Members -(Interjection)- would like them (Interjection)
MR. KANYOMOZI: Point of order. Mr. Chairman, with all the due respect to the Leader of
Government Business, is he in order when he is giving simple information to make it into a
contribution?
THE CHAIRMAN: He is quite in order to inform you please. Inform the House.
MR. ADYEBO: Mr. Chairman, thank you very much for your wise judgement, but for hon.
Kanyomozi, I think he is one of the few Ugandans who have been talking more than anybody else
all over the year, and he has never contributed -(Laughter) So, I would like to assure hon. Elyau,
that his complaints are actually taken note of, and we are on the ground, that road will be
rehabilitated. Because we have already short-listed cotton even those who are undertaken, I think
it will be Sietco Company and the money is mobilised.
But as I told you, hon. Elyau through the Chairman, we need to have some patience, because even
we will realise that in some countries where you have different systems of Government like ours
here, even those who are on the opposition do better jobs than the Government because theirs is
to pick the good things and do it there. Similarly, since we are having an umbrella here, we must
move together, when we come up with a project you should take it as your own project not as a
Government project because you are part and parcel of the Government. I thank you very much,
Mr. Chairman.
MR. MAYENGO: Point of information. Mr. Chairman, I would like to inform hon. Elyau on
the Floor that, the point he was driving was that the taxes collected should be used to help the
whole of the country. His problem was that he used only one example from his area, and I want
to inform him that he could use several examples from other parts of Uganda.
MR. ELYAU: Thank you, Mr. Chairman. Although, I preside the import the right hon. Prime
Minister to explain, Mr. Prime Minister is aware that those areas of ours needed a lot of attention.
For example now, you go to Soroti Hospital there are no doctors, we were supposed to be having
about eleven doctors to 13, but we have got one doctor or two, one who is lame, he cannot even
walk at night. You can see that thing.
Secondly, there are lot of promises that have been made, and when I say this I want to help the
Prime Minister and Government to know that those are the things as a leader I should show to my
Government. If I were selfish, I would have never talked about it. So, I am with you, but I am
reminding those who sleep not to sleep. It is high time that the Minister for Works should visit
our place, we had even invited the Prime Minister to visit Soroti recently, and I do not know
when he will come. I want you to go and see for yourself that the cry we are talking of is true (Interruption)
MR. TOM APILA: Point of information. Mr. Chairman, by the time I left Soroti June last year,
we were supposed to have thirteen doctors for Soroti Hospital or Soroti District. So, the point put
forward to the House is genuine.
MR. ELYAU: So, Mr. Chairman, time have come for us to judge ourselves -(Interjection)- as
we have the opportunity to come to this House so that we could correct the image of the leaders
to show to the people that the servant we need to serve is that common woman and man in any
rural area given in Uganda, including Kalangala as my Friend was saying. I have not been to
Kalangala but I was flying above, so I do not know geographically how badly affected it was, and
I would have supported you.
So, I want to urge the Minister of Finance to solve the intention of putting what they called two
per cent with holding tax for Agricultural purposes, until it is properly studies, because this one
will hurt farmers. A man already who is frustrated if you tax him then you are stopping him from
doing anything. These are pillars, these are the players of our economy, and we should not
actually disturb farmers. If anything, we should give farmers our encouragement.
Time has come for Government to support farmers’ activities in the economy, and subsidise the
activities of the economy. Do not live us alone and say liberalisation. What is liberalisation? We
do not know liberalisation in Africa, but we know support from government, because government
is the father. Now, with those few remarks, I know most of the information is in our information
from the Committee and finances. Thank you very much, Mr. Chairman.
MR. RWAKAKOOKO (Ruhama County, Mbarara): Thank you very much, Mr. Chairman,
for allowing me to have an input into this very important Bill. The essence of this Bill is to
realise the second side of the budget, in other words, this Parliament has already approved the
expenditure side of the budget and, therefore, this Bill is putting the income side to realise the
expenditure objectives to which Members have already given their contribution.
We have had a series of meetings between ourselves as committees on the economy, Finance,
Planning, Trade and Industry. We have also interacted with the Ministry of Finance including
this, today, just before we came here, we had just terminated a meeting with the hon. Minister.
We have also had interaction with other operatives concerned with this Budget namely,
manufacturers associations and other parties affected by this Bill. I would like to make a few
observations because the details are coming in the form of amendments that will follow later at
Committee Stage.
Our observations are that the Ministry of Finance is still keeping the Budget as a mystery. That is
why you have shocks to which there are cries and yet when you go into the body, you find that if
the budget was demystified and therefore sufficient consultation had or sufficient consultations
held, you would find everybody participating and therefore willing to go with the Government.
We have, therefore, made it known to the Minister that there is need for wide consultation, and
that there is need for detailed discussion before the budget and the budget meaning the
expenditure side, and this Bill are brought before the House. Fortunately, there is a committee
which was made standing among others which deal with Finance and Economic Planning, and
therefore, I would like to suggest that the executive side of government, that is the Front Bench,
sensitizes itself to democratic and Parliamentary requirements of the current period, that is, we
are not going to allow a situation where Members of the Back Bench receive and clap to the
budget without any participation.
Nevertheless, I want to assure the Front Bench that Members of Parliament in the Back Bench are
very, very position. You will see in due course how even probably most positive they are
because in matters where the Front Bench has feared, we have dared. Our study was wideranging although we have not reproduced the documents for purposes of enactment of
amendments. We had to go through this book to see whether the contents tally which the
intensions of Government, I want to request Members when they have tine to go through, please
note the following: the rates you see in this book are not the same ones being practised. I will
explain, when you get these books, you will find Import Duty, PTA Duty, Sales Tax. Now it is
not for negative reasons but I would like to explain because you will find, you may be consulted
and you will land into a problem. So, I want you to take note.
Now, where you find Import Duty and PTA Duty and you find the Import Duty higher that the
PTA Duty, the PTA Duty rate will apply. That is why - I said there are likely to be problems in
the public interpreting as to the correct Duty rate payable. Now there is also another column; the
Excise Duty. The Excise Duty is known to be a tax levied on local production. The current
Excise Duty is both on local and imports. So, you will find also that there is need for your careful
scrutiny before you give advice.
We have agreed in view of some of these problematic columns, we have agreed with the Minister
that later on even when he does not - because we do not want him to breach any International
classifications. He should clearly show what is tax on local production and that on manufactured
goods (Interjection)- Yes on imported goods. Now, I understand probably they may call it
surcharge or surtax whatever it will be.
We also examined this current tax structure because it is the first in this Parliament in this form.
We examined this towards making sure that the Minister - the government is encouraging local
production. This is very important because as it is well known, if you put a lower tax rate on
imports, naturally you will be encouraging imports and you will be frustrating the PTA Trade
which would mean that we are undermining the policy that we are trying to build. So, we have
made it known to the Minister that we would like to see more PTA Trade, and we would like to
see more local production and therefore, we want the Government - we want the Minister through
the physical policy, through the monetary policy to demonstrate this in a tax structure form, so
that the local producers are encouraged to produce more, are encouraged to employee more
people, are encouraged to invest more, and finally, once they sell more, then the Minister should
have no problem to raise his taxes.
The other aspect we looked at and we are bearing in mind, Sir, the overall obligation of having
passed the expenditure budget was, how can we, within the structure, reduce those items which
we think are a problem to the consumer that the general populous while we are not interfering
with the total revenue to meet the required expenditure? I would like to mention some of those
items that were contentious at the beginning. I want to commend to the Minister of Finance, the
Government and the manufacturers particularly who have availed information, even if it is not
100 per cent all, but who have enabled the committee to come out with a position vice versa the
requirements of the Minister.
On cigarettes, I would like to convey the concurrence of the Committee up-holding the tax rate
that the Ministry imposed. The reason is this; we examined and found that BAT that is a
monopoly supplier of cigarettes is gaining 82 per cent, gross profit on sales. BAT also get 65 per
cent net profit before the very, very high risk element of 20 per cent that the Minister talked
about. So, there we have no problem in agreeing with the position of the Minister, even if we
knew that the Minister did not arrive at these tax rates having considered all these factors. We
were just collecting information. I am saying this because, earlier on, I raised an issue as to
whether the Ministry of Finance actually had undertaken serious studies to determine the taxable
capacity of each area, an since we concurrently or simultaneously received this information, I
therefore was obliged to make this conclusion. But as I said, the Minister was in a position to
guess much more correctly than us.
The Minister has said on beer, that the situation is yet to be solved. This confirms what I have
said. What I would like to say though is that, I think it is high time we looked at the region as a
whole, I know we no longer subscribe to the binding arrangement of the East African
Community, where the tax policies were harmonised and therefore, the rates imposed after very,
very inner consultation of the Ministry of Finance. But, I would like us to give no opportunity to
smugglers. I would like us to fight smugglers not with guns, but with physical policies. I would
like us to spend less money on collecting money and therefore, I do not subscribe to the issue of
Ugandans loyalty being measured whether on consuming a beer at Shs. 1,500/- vis-a-vis Shs.
700/=, I think this is too much for us.
At the border, we have been told that a beer costs Shs. 900/-, and here it costs Shs. 1,500/- (Interjection)- Okay, I think what I am trying to convey is a fact, that smuggling should be fought
in a different way. In other words, it should be fought by competitive pricing. And this should
cut across; we have got an Embassy in each of our neighbouring capitals. Why do we not get
information, which we can have as to plan so that we compete effectively and advance the
marketing of our own products? That is what the Committee would like to see happening. That
does not only talk about beer, it also goes for sodas, it goes for petroleum products -(Interruption)
MR. ARUNA ADAM: Point of information. Thank you very much, Mr. Chairman, I would like
to inform the hon. Member holding the Floor and the House that, fighting smuggling is really a
very difficult exercise, because smuggling is done in two ways. I give an example, in Arua, some
people smuggle petrol cheaply to Zaire and they bring a sicol. When they calculate it, the sicol is
really cheap. So I do not know how possible we can fight the smuggling of goods from inside.
Secondly, some of our commodities do not have a local market. For example, if you take bogoya,
if you take tobacco in West Nile, a certain percent of tobacco is not bought. So each farmer is
trying to find a way out to smuggle this tobacco and get out some commodities. So, when we are
talking of fighting smuggling, I think it needs a thorough study, Mr. Chairman. Thank you.
MR. RWAKAKOKO: I thank the Member for giving this information. Mr. Chairman, I think it
is easier probably to look at the alternatives to smuggling out. We have a liberalised with foreign
currency market here, and smugglers into Uganda can easily smuggle the foreign currency out of
this country those who smuggle in. So, I was going to conclude on that by suggesting to
government to study further how to harmonise our tax rates in their region, so that we can be
comparative and we can advance our production and marketing. I would also now like to touch
on petroleum products. The Government collects about Shs. 490/= per litre on super petrol of
which the total selling price is Shs. 950/= today. On diesel, it collects Shs. 364/- and on kerosene,
Shs. 289/=. The prices you know, diesel is, I think Shs. 830/- and kerosene is Shs. 710/=. It is
well known that if you increase the cost of fuel, the multiplier effect hits the entire economy and,
therefore, you cannot come around and say that, while at the sametime the price of fuel is going
up, the inflation is going down. That is very difficult.
I will give an example. The cost of a bunch of bananas in Mbarara and Ntungamo is Shs. 500/=,
and if the farmer brings it on to the tarmac it is Shs. 5000/=. Actually that is the price I paid
recently, for one bunch of matooke in Ntinda. So, now one cannot say that actually the seller
who is at this end and mind you, we are dealing with perishable item that the seller is only
motivated to do profiting. I do not think so.
So, I think the intermediary elements include a very high component of fuel cost. We would like
to request the Minister of Finance to study this along with the study to widen the tax structure to
be able to put a reasonable price on fuel, so that the cost is not excessive there.
Hon. Manzi has talked about the employee remuneration, I will only add by asking the Minister
of Finance to look at the structure and facilitate the employees spending more time on their jobs
rather than outside their officers to go and make up extra revenue to be able to sustain
Government operations -(Interruption)
MR. OBWANGOR: Point of information. Through his excellency, my hon. Colleague
Rwakakooko, this is a question of prices. But we forget that in Uganda as a nation, we have
Chapter 104 governing the distribution of prices of which our Colleague there on my left hand
side, hon. Minister of Trade and Industry, controls. You see you must relate not only just one
price because we have the Minister of Agriculture here now, trying to run away from product
commodities, and we have the ministers of Education, Finance, and of Energy. These ministers
ought in their own conference rooms, to sit together on commodity prices, service prices, and
transport prices, to decide what Uganda can afford. But it is left that it should go right up to the
sky level, the ceiling. No economy whatsoever on earth can run on its own freedom without
political regulation.
MR. RWAKAKOOKO: Thank you very much. I am sure the ministers who were addressed
have heard. We looked at the other issue, the issue of soap, which attracted our attention because
we found that only 10 per cent sales tax is imposed, and yet the cost of soap to the ordinary
person or not everybody in this country continues to go up. The Minister of Finance has
promised to - at this area and brig it to what is realisable. Then, Mr. Chairman, we have looked at
the issue of sugar, the issue of sugar is very complicated. Initially when we met with officials of
Uganda Revenue Authority, they denied what is called the excise duty of 20 per cent, which is
imposed outside this law. In other words, there is tax that is imposed outside this law that the
Ministry of Finance had initially denied, but I am happy the Minister of Finance has not accepted
it as the tax from which they are picking the money. We would like the Ministry to consider
removing that tax because now probably has been consulted how it came about.
I am just winding up, and we have been assured - I am just trying to summarise, we have done a
bit of trading off today, and our trading off went as follows; first we would like to support the
amendments which the Minister is going to introduce because we were going to introduce this
one of which the copies you have, and we are very, very happy that the area of licensing and so
on, attracted his attention because we were already raising it in our discussions.
There are other areas that we are going to raise and hon. Kanyomozi will be introducing the
amendments. These are amendments concerning luxurious motorcars, to be specific. Earlier on,
the Committee on the economy had observed that it is high time we standardised the makes of
these vehicles and we also controlled the capacity without making them legally prohibited. But
only give a direction as to the absence of being cost conscious. So, the amendment which are
coming are intended to bring the tax rates of these vehicles from Shs. 2,000 to Shs. 3,000 and
above at levels which are consistent with revenues or the incomes of those who buy them. I
would like, when these amendments come up, that they please be supported.
Finally, the Minister has promised although he has not made a mention of it, he has promised that
today in this Council in this august House, he was going to suspend from tonight the with holding
tax of 2 per cent. Can the Minister accept my memory working and therefore, I lend him this
experience so that when he is winding up, he does actually suspend this tax that is hitting farmers
very badly. I would like to make clarifications. We have not said that he abolishes it, no. We
have said that he suspends it and then works out the mechanism that can bring it back in any other
form other than that which is hitting farmers. So, we are talking about the methods of reintroduction here. We are not talking about essentially killing it, Sir, mindful of time, I would
like to thank you for giving me the opportunity to contribute to this important Bill. I thank you,
Sir.
MR. OBWANGOR (Soroti Municipality, Soroti): Mr. Chairman, thank you very much. It is
very interesting, politically speaking that, the supporters of democracy and of human life must
ensure that they support the Government of the day, to ensure that it gets sufficient finances and
revenue for the purpose of delivering goods and services to the people. It is inescapable that
whatever the government must be, it ought to be the way the government must utilise the funds it
gets from taxation of the people. But what do we keep in Uganda? Under Section 2 of the 1962
Statute, to enable the government get revenues, and equally I think it is even repeated in this here
that when you read Clause 2 of the particular appropriation Bill, you think that government will
be made.
These people in the government have been playing us the tricks by using - yes, I am going to
speak I am still alive to speak; I am going to -(Laughter)- using tricks by words. Maybe - when
efficient of finances arise, because of government ought to have sufficient ample revenue so that
it can discharge honourably its services. So, it is in this respect that we must all, reasonable men
and women, must support this government. Otherwise, how can a government discharge its
duties?
Through legislation, I am really flabbergasted because I know the hon. Mover, namely the
Minister of Finance and Economic Development hon. Nkangi, the Leader of the Conservative
Party -(Laughter)- I am glad to say I have had much to educate him politically; why? When I
was in UPC and we were together with the Kabaka Yekka in 1962, and I was one of those Kirya
is here, I was one of those recommended him to be under Jumson Simpthon who was the Minister
of Economic Affairs in Uganda, as a Minister of Commerce and Economic Affairs here, so that
he could understand that a Muzungu is to be the best Minister Uganda could have. (Laughter)
Now, I want to be brief because I will tackle the political, I am a national liberal member, and we
shall be coming soon, leave alone the NRM s putting the politics, but we are coming -(Laughter)we are coming yes, what?
The Minister in the course of his address to the House said he wanted to simplify taxation law,
and may I submit in all seriousness to the honour of the Mover, he not only as a lawyer, but also
as an economist, he has studied the canos of Adam Smith, and of taxation, that he must struck the
goose, and the hens softly and quietly so that he can produce the eggs that he loves.
Now, Mr. Chairman and the House, I want to be true to ourselves, are we enabling Uganda to
produce the money that is worth the services of the people, in the system of taxation, and why? I
will tell you, income tax, the Taxation Decree - the Decree of 1974, that is how many years, 19
years ago; alright on decree the so called, what do they call it? (Interruption)
MEMBERS: Finance Bill.
MR. OBWANGOR: No, no, I know what my things are -(Laughter)-Income Tax Decree and
Finance Decree of 1972, that is 19 years ago or 10 years ago. Now may I pray and I seriously put
of all these ministers who were there; they had been telling the country that they are university
men; young men ‘Abavubuka bava Musomero,’- with all those lawyers here, why are they
following Amin’s ways of taxation of 1974? (Laughter) Why are you following Amin’s ways
whom you called a fool? Amin’s Finance Decree of 1972, when he was not the financier, you
said, he was uneducated and uncouth, and these are the ministers of Local Government, and they
are there; even the Minister is there; he was telling Amin here in this House.
Now, we should apply - I put the Minister next - if I were the Minister or President appointing
him, next streamline taxation be income tax, taxation, decree of finance, the original law Chapter
114 Financial Act which we made, he knows he is looking at the ‘nankani’-(Laughter)- he knows
Chapter 149 of Uganda Laws of 1964, the pieces of taxation and even Chapter 9 of the
Constitution of Uganda of which he is a lawyer, he should know, produce taxation of the current
system enabling Uganda’s finances and economy has changed because we are now in inflation.
A dollar was Shs. 8 at that time, now it is Shs. 1,000. In our times a dollar was just Shs. 8, and
we were here; that is how we built the Bank of Uganda, Uganda Commercial Bank, Uganda
House, which you are crying for now, instead of getting land to build your own; instead you want
Obote’s house. (Laughter)
Finally, may I pray this - the other day I said, what are these doing in the government - please
streamline and consolidate the successive law. Please streamline and consolidate the taxation
law, when it is clear all taxes I will tell you why. In my Constituency, there are the so-called now too many in every town Council or areas who say, I am a taxation expert, give me 170,000/so that I can recommend you to your RA so that he can pay the taxes, why? If I know the law and
I can look at what the law says, I should pay income tax because he put rates it will be clear to
everybody, everybody will be honourably clear to run and pay taxes. So, let us have, Mr.
Chairman, therefore submit the hon. Mover since he is a responsible Minister to make a law clear.
THE CHAIRMAN: Order please, try to wind up please, wind up please.
MR. OBWANGOR: Thank you so much.
DR. MAGEZI (Jinja Municipality, (East) Jinja): Thank you very much, Mr. Chairman. I
stand to support the Bill, and I have a few observations to make. First of all, I will start with the
point that the Rt. hon. Prime Minister ended with, I do feel that we are one country, one Uganda,
and under one leadership. I am a bit disturbed to see that there is a very big programme going up
in the North and this House is not totally but by and large, we are not well informed about the
Northern Uganda Rehabilitation Programme. I think the Minister responsible should really make
a policy statement or ministerial statement about this programme, and we could discuss it,
because I think all of us are together and we could have a lot of input to make on this programme.
The people of Uganda are poor, by and large, and the number of taxpayers is decreasing and not
increasing, because of the various restructuring programmes that we have. And sooner rather
than later, we may get a situation where we just tax the same group of people more and more and
more, and this could lead to a total break down and a mafia group of people who will come
together to try and beat government taxation.
I, therefore, would like to call upon government that serious efforts be put in place to industrialise
Uganda with small-scale industries. Industrialisation will automatically create employment
throughout the country. When people are employed in meaningful work, they will be able to pay
taxes more so if they will be brought in on tax levels that they can pay without really straining
themselves to pay taxes.
Otherwise, the inevitable again happens. All over the world economies do have subsidies for
some of the activities that take place in their countries; in France, in Britain, and in America, and
they have to subsidise their farmers because they have got a very strong loopy.
In Uganda, which is an agricultural country and yet we cannot boast of any serious mechanised
farmers per se, we have got to promote and oblige farmers within our society. And, therefore, the
prime duty we should do as a government is to create incentives that will attract people into this
sector of farming so that we can have more farmers, we can have more produce, some of which
can be exported and we shall get more money and we shall be able to tax more people.
But when you tax these farmers, which I think is even the wrong group, I think this tax is meant
to be within the people who probably trade in produce but they have passed down to the farmer.
You are alienating that sector of our economy and people will start to grow just enough food to
live on, they will not be involved in any serious production of agricultural produce for export.
This, I think happened one time during the Amin Government and some people sold coffee
plantations because they were finding that whatever they were doing before they could get very
far, they were seeing tax down, and who in the end is going to suffer?
We as leaders we alter upon ourselves to create an environment to harness the efforts of our
farmers such that they can grow more and on that score alone together with the fact that Uganda
is an agricultural country, but we only have land and the good climate we have not yet exploited
that land I think we should forget taxing the farmers for the time being. Mr. Chairman, the (Interjection)
MR. KASAIJA: Point of information. Thank you very much, Mr. Chairman. I would like to
inform the speaker, Dr. Magezi who is talking about not taxing the farmers. If the speaker is
aware or he has read the budget clearly, he will find that this budget has actually favoured the
farmers more. In fact, this is contrary to what URA would have liked to see done to the farming
sector. The farming sector contributes about 55 to 60 per cent of the GDP and yet it contributes
about less than 10 per cent of the total revenue collected. So, you can see it is really a
contradiction to us. Should we leave this sector out which contributes more of the GDP, and so
where are we now going to get this more revenue? So, I would like to end by telling him that this
budget has actually favoured the farmers because even the tax that was imposed of 10 per cent, is
a nominal rate. It is nominal, and so it is not a rate that is so high for the farmer.
MR. NDEGE: With all due respect to the Director of Uganda Revenue authority, it is not true
that the farmers contribute only 10 per cent to the total revenue, total revenue of this country is
direct and indirect tax and 90 per cent of the population are farmers, and these are the people who
are buying sugar, salt, tobacco and all what you are talking about and they contribute more than
90 per cent of what this government is using.
Therefore, this accusation and wrong impression by the Front Bench and anybody else who might
be employed by parastatals, I think we should come to reality and give the farmer credit. His
children are not going to school this term and you are just keeping quiet and say that you are not
contributing enough. Are we serious? (Laughter). Are we really serious? Then I am saying, I
am going to speak later on, but I am supporting Dr. Magezi - if you are not careful, the farmer
will retreat, and just plant enough and keep quiet and leave government; after all they have done
without government for so many years. Thank you, Sir.
DR. MAGEZI: Mr. Chairman, statistics can be written to suit particular arguments, but I am
going down to earth and saying that, let the farmers pay graduated tax by all means but this
problem of leaving a 2 per cent withholding tax so that they can even be forced to write books of
accounts, is not something that we can really attain in Uganda at the moment.
Let me say something about border permits. Within the last two months, there has been a lot of
traffic, and a lot of produce Boards in Jinja, Iganga and Kamuli and most of these produce has
found its way to neighbouring countries on the pretext of border permits. But these border
permits, much as they have helped to pay more to the farmer, they have actually deprived this
country of millions of dollars. Moreso, when the neighbouring country is allegedly cleaning and
re-packaging this produce, and it is being labelled produce of that country.
I think these are areas where government should really step in and create facilities such that this
abuse of our produce and the inability to harness this foreign exchange, is stopped forthwith. No
need to add but we are continuing to be surrounded by countries which are in some form of
turmoil. So we should encourage our farmers to grow more and tighten the exports of our
produce so that we get the value that is due to the farmers. I thank you very much, Mr. Chairman.
MRS. LOY NKWASIBWE (Women Representative, Kabale): Thank you, Mr. Chairman, for
giving me a chance to make a few observations. First, I wonder why hon. Rwakakooko preferred
to call border trade, smuggling. I think we were made to learn that smuggling is actually border
trade, and what is important is to find out why these people continue to smuggle, and government
money is being spent on trying to stop them from carrying on this border trade. I think a lot of
revenue could be collected if more research was made into this business so that more revenue can
be realised.
Secondly, another area government has not addressed, which could enhance revenue is in
industry. I am glad the Minister of Industry and Trade is here, and I am sure he is aware that
many Ugandans are skilled in many ways. We have local craftsmen who could take up industries
if they were given technical guidance. These people are usually said to be ignorant as hon.
Kagonyera said yesterday. Those people who harvest timber in their forests do it for many
various ways. We know so many craftsmen who could do wood carving if they were provided
with technical tools and were also guided in being organised in urban areas so that the market of
their goods is realised. We also have metal work people commonly called blacksmiths. These
are many in the rural, but they are not assisted with any technical knowledge, they are not assisted
with proper tools, electricity is not there, and these people could do a lot of enhance the revenue
of the country if proper attention was given to them. We have been having a government White
Paper to be debated here, what is the Ministry doing to make sure that there provisions are being
used? Is there any institution which is now carrying out technical or skilled training rather than
the Lugogo Technical Institution we know of? The Ministry of Industry should also pay attention
to this. It does not have to wait for the Ministry of Education.
We have got a problem in Uganda of obtaining industrial machinery. There is nowhere you can
get even a catalogue out of which you can get a machine. And we have got so many people with
knowledge and the guidance, and they know what they want. But how can we get machines?
Where is the information? All this is needed, provide the information, provide the knowledge
and the guidance and see how we Ugandans go into industry.
When we talk of industry, even big industrial shows that are going on, they are only producing
for the poor citizens to buy not to learn from. We wish to see the Minister go beyond what is
displayed around here, so that all Ugandans are properly guided into industrial business. We
have had experience with seminars provided for financially by many donors. But none of them
has come up with tools on how to assist the ordinary person. We also have seen some Ugandans
try to dehydrate vegetables and fruits on their own. They are so many, but these people need
technical guidance, they need technical education and I am sure our Ministries have got people
who are equipped with these skills.
The members of the public seem to be left to fend for themselves. Women for example, they
have been organised, they have made associations and clubs and operate through for many things
and we hear that even at the Bank of Uganda, there is provision for soft loans even in
Commercial Bank. These are not clear, and they are not open to us so that we can utilise them,
and we know that many women do not have collateral. We cannot afford these loans in these
issues so that we can organise the community into industrial production and also contribute to the
revenue of the country. Thank you, Mr. Chairman.
THE MINISTER FOR FINANCE AND ECONOMIC PLANNING (Mr. Mayanja Nkangi):
Mr. Chairman, I have listened very attentively to the various submissions and contributions by
hon. Members to this Bill, and my judgement is that apart from the general reservations they have
made, for instance, concerning the effectiveness of methods of collecting taxes, they have not
introduced the tax measures which are being specifically proposed in this Bill. Apart from, for
instance, issues concerning motor vehicles, which we have agreed with the Committee on
Economy this morning, to come here and amend for that reason.
Sir, I take it that the hon. Members support the proposals in the Bill, subject of course to
amendments, and we are going to bring forward at the Committee Stage. Therefore, I can only
say at this stage that the advice which has been given to me concerning various ways and means
of improving the method of taxation and improving the general revenues of the country, these I
shall critically examine as to saw whether or not they are practicable. And apart from that, I want
to thank for their general support. With that, I beg to move.
THE CHAIRMAN: I now put the question that the Bill entitled the Finance Bill, 1993, be read
a Second Time.
(Question put and agreed to).
BILLS
COMMITTEE STAGE
THE FINANCE BILL, 1993
(Clause 1 put and agreed to).
(Clause 2 agreed to).
(Clause 3 agreed to).
Clause 4
MR. MAYANJA NKANGI: Mr. Chairman, I beg to move that the proviso of sub section (a)
Clause 4, that we insert immediately after the word ‘accordingly,’ the phrase on a scheduler basis,
the words I am requesting to insert are a ‘scheduler basis.’
(Clause 4 as amended and agreed to).
MR. MAYANJA NKANGI: Sir, I beg to move that in sub-Clause (b) we insert immediately
after the word paragraph (f) appearing in the open statement that insert that word ‘of sub-Section.’
(Clause 4, sub-Section (b) as amended and agreed to).
(Clause 4 as amended and agreed to).
(Clause 5 agreed to).
(Clause 6 agreed to).
(Clause 7 agreed to).
(Clause 8 agreed to).
Clause 9
MR. MAYANJA NKANGI: Mr. Chairman, I beg to move that at the opening of Clause 9, we
substitute the following; the Decree is amended in Section 58 by substituting a provision for subSection 1, the following:
Clause 9 as amended agreed to.
Clause 10
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move that Clause 10, we should delete
sub-Clause (d) and re-number sub-Clause (c) to be sub-Clause (d). I beg to move.
(Clause 10 as amended and agreed to).
(Clause 11 agreed to).
Clause 12
MR. KAFUMBE MUKASA: Mr. Chairman, on page 8, sub-clause (b) of Clause 12, please
insert immediately after the expression, Section 58 occurring in the second line of the provision,
the expression in Section 59, I beg to move, Sir.
THE CHAIRMAN: I now put the question that Clause 11 do stand part of the Bill.
(Question put and agreed to).
Clause 12
MR. KAFUMBE MUKASA: Mr. Chairman, on page 8 sub-Clause (b) of Clause 12, please
insert immediately after the expression Section 58 occurring in the second line of the proviso the
expression on Section 59. I beg to move, Sir.
THE CHAIRMAN: I now put the question that Clause 12 sub-Section (b) be amended as
proposed by hon. Kafumbe Mukasa.
(Question put and agreed to).
(Clause 12 as amended and agreed to).
(Clause 13 agreed to).
Clause 14
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move on page 8, Clause 14 that we insert
between the word ‘deleting and section,’ the following sub-section 1 to 12 ‘of’. I beg to move,
Sir.
(Question put and agreed to).
(Clause 14 as amended and agreed to).
(Clause 15 agreed to).
(Clause 16 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move on page 9 Clause 17 sub-Clause (c)
to insert between the word ‘Section and collects’ appearing on the forth and fifth line respectively
the word hence. I beg to move, Sir.
(Question put and agreed to).
(Clause 17 as amended and agreed to).
(Clause 18 agreed to).
(Clause 19 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, on page 10, first line on the page Clause 20 of the
amended sub-section 5 of Section 8 of the Finance Decree 1972, substantive for the expression 3
the expression two and half. I beg to move, Sir.
(Question put and agreed to).
(Clause 20 as amended and agreed to).
(Clause 21 agreed to).
(Clause 22 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, on page 23 Clause 23 you will see there a 13 to be
amended as follows, as proposed to move, sub-Clause 1 of Clause 13, substitute for the
expression ‘objecting’ appearing in the first line with the expression ‘who disputes.’ I beg to
move, Sir.
(Question put and agreed to).
(Clause 23 as amended and agreed to).
(Clause 24 agreed to).
(Clause 25 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move that Clause 26 insert between the
words ‘four thousand’ appearing in the last line thereof the word ‘hundred.’ I beg to move, Sir.
(Question put and agreed to).
(Clause 26 as amended and agreed to).
(Clause 27 agreed to).
(Clause 28 agreed to).
(Clause 29 agreed to).
(Clause 30 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move some amendments on Clause 31.
Substitute for the amendment to Section 8 of the Sales Tax Act the following:
8(1) The Commissioner General may release to a manufacturer who is registered with Uganda
Revenue Authority for sales tax imported raw materials and industrial packaging without the
payment of the sales tax payable at importation and the manufacturer shall account for
the use of the raw materials and pay the sales tax on the finished products.
Where a manufacturer fails to satisfactorily account to the Commissioner General for the use of
the raw materials in manufacturing of goods liable to sales tax, the sales tax payable on the raw
materials shall be paid forthwith in a manner that the Commissioner General may prescribe. I
beg to move, Sir.
(Question put and agreed to).
(Clause 31 as amended and agreed to).
(Clause 32 agreed to).
(Clause 33 agreed to).
(Clause 34 agreed to).
(Clause 35 agreed to).
(Clause 36 agreed to).
(Clause 37 agreed to).
(Clause 38 agreed to).
(Clause 39 agreed to).
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to move that the following new Clauses
immediately after Clause 39 be added. Clause 40 (1) exemptions of excise duty, import duty and
Sales Tax except those provided under this Statute are abolished.
Any item exempted from excise duty, import duty and sales tax will not be liable to import
license commission.
MR. KARUHANGA: Mr. Chairman, I stand to support this and to ask for clarification. I
support it because I would like these exemptions to be reduced but I ask clarification about what
the Minister has said, he said, ‘all exemptions are abolished except those appearing in this Statute.
Now, there are a number of laws we are passing in this House where we have given exemptions
for example, the investment Statute it is not part of this Statute but it is a Statute where we say
investors can come on first arrival with goods and they would tax free.
There are others, which appear in the Medical Statute I forgot the name of the Statute, if you get a
donation for medical equipment, it can be exempted but it is not in this Statute. Now, what I want
to know is, there is a system now in the Ministry of Finance which the Minister set when he was
reading the budget, that he is going to form a Committee which will sit to consider various
applications for exemptions. Now, I do not know whether that Committee is in this Statute and is
mentioned, if it is not it is doing an administrative job. So, what happens when the Committee
finds that Parliament has abolished exemptions?
So, I would like to support the abolition of these exemptions that had been abused, but I would
like to get a proper clarification on what is being abolished and what is in this Statute so that the
House can know where we are.
MR. KAFUMBE MUKASA: Mr. Chairman, as you knew in this Statute on sales, import duty
and excise duty. There has been provision for some one to be able to exempt or be lenient on
these taxes other than outside other laws. But within these three laws it has been possible to
exempt people for example, someone administering import duty or someone administering excise
duty could, in his discretion if he is satisfied exempt you from duty. Now, exemption will
continue if it is by specific legislation like the Investment Authority which provides legally for
how we can get an exemption or the exemption now will remain by the Minister for Finance who
is authorised under another Statute in his discretion to make an exemption and that Statute
provides on how that exemption can be done.
So, I want to inform hon. Karuhanga that under other statutes like the one reported on investment,
there is provision on how you can give an exemption.
The other area left is for the Minister for Finance under another Statute. The Minister is
empowered in his own discretion and also the procedures are outlined like issuing a statutory
instrument and so on. So, on one person now because he is in the administration of excise duty or
import duty or sales tax will on his own under these revenue laws exempt the people. So, we are
narrowing down now all exemptions to these narrow areas and I thank for the support you have
given.
MR. KARUHANGA: In light of that exemption, I wish to oppose this amendment. I think the
existing law is a better law than this one. The existing law is as follows; the Minister for finance
who is charged with the sector becomes a human being, he can receive applications and consider,
he told us that he had set up a Committee to even verify further and advise him in the budget
speech.
Now, what we are being asked to do is to say, clap it down and cut it out, we are going to be
embarrassed, there will be situations where people donate things to this country genuinely they
come here, they go to organisations who cannot afford to pay these taxes and they will rot in the
ware houses. This is not going to be a good law; leave the Minister with the power he has, if he
abuses it, he abuses it at his own pay roll, and he will lose his job for something like that. The
policy is that we expect the Minister to be a responsible person, I should not be the one actually
who is saying this he should be the Minister. But this type of amendment to me seems to be
harsh in the circumstances of the country.
MR. KAFUMBE MUKASA: Mr. Chairman, hon. Karuhanga is right, there was I think a word
‘other’ which was left out instead of ‘this’ because the amendment should say, ‘exemptions’ of
excise duty, import duty and sales tax except those provided under other statutes are abolished,
and other statutes the Minister can and under other statutes the Investment Authority can, but
under this very Statute - Sales Tax Statute and Excise Statute or Import Duty Statute.
No one now under these laws can purport to give an exemption because the abuse has been that
administratively people in the areas of administering these taxes have also been giving people the
freedom not to pay the tax. We are saying that unless there is another Statute you cannot claim
that because you are administering import duty therefore you can give an exemption.
MR. KANYOMOZI: Point of clarification. I am seeking more clarification in that case; and I
want the Minister to reconcile that, although we have not reached there. With Schedule number 2
on page 20 of the Bill, because if that is the case Schedule 2 is more specific and more detail with
who should and who should not including the international organisation extra up to the O.A.U. on
page 25, so I am wondering which do we take now? We take the amendment as he has resented
or are we going to be tied to Schedule 2?
After rocking up the hands of these officials in this Section, we are saying areas where automatic
exemption can be exercised without necessary seeking the Minister’s authority. For example,
where NGO’s because they are stopping the officers we are leaving a room for the Minister to be
able to give his exemption and the schedule we are indicating to you even to the Minister who
should hope to get normally an exemption, so that everybody does not think that you can easily
apply for an exemption and get it we are trying to limit and inform the members of the public
who are likely because experience has shown that everybody thinks he can work on the mood of
the Minister if he finds him kind and so on and apply for an exemption. We are trying to reduce (Interruption)
MR. KARUHANGA: I am convinced that there is a problem of interpretation of this law as a
result, I would like to move that we adjourn, the Minister looks at this particular Section and we
resume tomorrow -(Interruption)
THE CHAIRMAN: No, no, we cannot do that.
MR. KARUHANGA: Mr. Chairman, I think this is very, very important and we are going to
mishandle it.
THE CHAIRMAN: No, no, I do not agree with that, he can consult from here.
MR. KAFUMBE MUKASA: Mr. Chairman, I am sorry. I have sought clarification over the
years there were provisions in many other laws coming to about 20, for example, like Makerere
University is one of them. They were always by law exempted from paying taxes, now what has
happened is that whoever now wants to bring in something and not pay tax you go and hide
behind that organisation and you know automatically the case will not be examined and while
many NGOs are doing a very good job, there have been many NGOs. Registered for the purpose
of being used to cover taxes.
So, now the effect is to say that let us rationalise all these exemptions be either given by the
Minister who must by statutory instrument gazette within these exemptions where they are
justified or not, making also accountable for his action or like in Section 37, recognise only those
like the Investment Code, which was supposed to consolidate all exemptions as far as the
investment is concerned. Clause 37 provides for that.
Now, all the other general exemptions in most cases have been automatic. One tells me I have
got second hand clothes, and so it will be automatic, or you say I am a religious organisation, and
I have got this and this, and since I am a religious organisation, the law was allowing them to get
automatic exemption. We are trying to have this automaticity of these exemptions. And in this
Schedule of 2, we are showing the guidelines of who are likely to be considered. Although the
hon. Minister is free to consider his own situation, anyone applies to such fertility. This is why
we had to consult, you see - whether we are not leaving room to someone to give the exemptions,
if he has justification. I beg to move, Sir.
THE CHAIRMAN: I put the question that the new Clause, Clause 40 be introduced in the Bill.
(Question put and agreed to).
THE CHAIRMAN: I now put the question that Clause 40 as added do stand part of the Bill.
(Question put and agreed to).
DR. MAGEZI: Point of clarification.
THE CHAIRMAN: Use a microphone please.
DR. MAGEZI: Mr. Chairman, I would like the Minister to rule it out, what is actual
amendment. Because I had amended his previous amendment.
THE CHAIRMAN: You can read for clarification please.
MR. KAFUMBE MUKASA: Sir, the amendment will read 41, exemptions of excise duty,
import duty and sales tax, except those provided under this Statute are abolished. Two, any items
exempted from excise duty, import duty and sales tax will not be liable to Import License
Commission. I beg to move.
Clause 41
MR. KAFUMBE MUKASA: I beg to move, Sir, that Members accept to add Clause 41 and
reads as follows; Section 17 of the Finance Statute 1993, shall not be applicable to hold reexported from Uganda. I beg to move, Sir.
THE CHAIRMAN: I now put the question that the new Clause, Clause 41 be added as proposed
by hon. Kafumbe.
(Question put and agreed to).
THE CHAIRMAN: I now put the question that Clause 41 as added do stand part of the Bill.
(Clause 41 as amended and agreed to).
The First Schedule
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to make the following amendments through
the First Schedule. On page 17 Item 1, insert immediately after paragraph in the following new
paragraphs. In paragraph 28, by adding a new sub-paragraph 3, as follows: ‘Three, any reference
in this Schedule to capital expenditure shall include additional money paid in Uganda Shilling
upon any money borrowed in convertible currency. And employed in acquisition of capital
assets, consequent upon the depression of the Uganda Shilling.’
G(31A) 1, when a capital expenditure asset is acquired by a person for the purpose of his business
from a letter under a finance disagreement, the corresponding deductions specified in Schedule 2
of the Decree relating to the Sales Capital Expenditure, assets shall approve the letter. Two,
when a capital expenditure asset is acquired by a holder of an Investment License under the
Investment Code from a letter under a finance disagreement, the relevant corresponding invest
incentive specified in part four of the Code, relating to the sales holder of an Investment License
shall accrue to the letter and the letter shall pass on such deductions to the holder of the
Investment License.
On page 18 of the same Schedule, Item 1A and 1B delete the word, ‘total chargeable’ income
from occurring there and insert the ‘total income.’ On page 18, Item 1A, sub-Item 3, delete Shs.
125,000 appearing in the first line of the tax rate column and insert Shs. 126,000. Page 19, Item
1C, delete a full stop and add immediately after the word rent, the word in excess of Shs.
840,000. I beg to move, Sir, these amendments on the First Schedule.
THE CHAIRMAN: I now put the question that the First Schedule be amended as proposed by
hon. Kafumbe Mukasa.
(Question put and agreed to).
THE CHAIRMAN: I now put the question that the First Schedule as amended do stand part of
the Bill.
(Question put and agreed to).
The Second Schedule
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to make the following amendments to the
Second Schedule. And Sir, for the purpose of saving time, we have supplied all these proposed
amendments to the Members. So, instead of repeating and read the whole thing and tire them, I
beg to move those proposed amendments.
MR. KARUHANGA: I wish to second the hon. Minister on this. On condition that he promises
that this time the amendments which will appear here will also appear in the Finance Bill,
because last year all the amendments we did were not effected in the Finance Bill.
MR. KAFUMBE MUKASA: I want to promise to the House and hon. Karuhanga specifically
that these amendments will appear as Members will approve them in the Finance Bill.
MR. BUTAGIRA: Mr. Chairman, following the information by hon. Karuhanga that is a serious
matter that some of these amendments we pass in this House were not reflected in the Finance
Act as finally printed. Once we pass laws here, they are part of the - they should be part of our
laws. If they are not reflected, then whoever is concerned should really be disciplined. It is not a
simple matter of begging that as hon. Karuhanga has said that it is based on condition. It is not a
condition. These amendments must appear in the final Act. And if it has not been so, the hon.
Minister who has an apology MR. KAFUMBE MUKASA: Mr. Chairman, hon. Karuhanga was not specific. He wants me to
give a general promise that he wished. When we pass these laws here, the Clerk does not work
with the Ministry of Finance to get the amendments incorporated. The Clerk works with the
Office of the Attorney General because that is now becoming law, and so that we have no
opportunity ourselves to re-visit these reports. So the records which the Clerk -(Interruption)- the
reproduction, is of the Clerk, and clerical records of our proceedings is what is finally produced in
the final law; it is not the Ministry of Finance.
THE CHAIRMAN: The Second Schedule as amended do stand part of the Bill.
(Question put and agreed to).
The Third Schedule
MR. KAFUMBE MUKASA: Mr. Chairman, as also Members received supplies, the proposed
amendment with such Schedule are quite detailed and long. So, I beg to move that since they
have all seen them as they are, and now being proposed to be incorporated as amendments to the
Third Schedule. I beg to move, Sir.
DR. LUYOMBYA: Point of clarification. Thank you very much, Mr. Chairman, for having
granted right. I would like to seek clarification as to why the Minister is trying to rush this
important issue. Whatever the Clerk produces is recorded - it is not just handed on a piece of
paper by the Minister. So, whatever should come as a final draft should have been recorded - I
would like to be clarified as how we are going to get over this problem and what guarantee can
you give us that the Minister will not provide a different type of sheet from what we have now.
Thank you.
MR. KISAMBA MUGERWA: Mr. Chairman, I think I can help the hon. Member who is
raising a query. The situation is that, in this House, unless by permission, if you are a
backbencher, you are not allowed to read your speech, you contribute from your notes. And as
such, since there is no written contribution, you need to be recorded. In this case, he is a Minister
and he has presented a written statement that is detailed and is circulated in advance, and that
way, we can overcome the problem by referring to this very statute. Thank you.
THE CHAIRMAN: I now put the question that the Third Schedule be amended as proposed by
hon. Kafumbe.
(Question put and agreed to).
THE CHAIRMAN: I now put the question that the Third Schedule as mended do stand part of
the Bill.
(Question put and agreed to).
The Fourth Schedule
THE CHAIRMAN: Hon. Minister please, move the Fourth Amendment and then we proceed.
MR. MAYANJA NKANGI: Mr. Chairman, I believe that hon. Rwakakooko is referring to rates
on vehicles, we all know luxury vehicles of above 1800 c.c. If I am right, we agree then would
move the amendment, but I want them to give reasons why they want these raised.
THE CHAIRMAN: Hon. Rwakakooko are you the one who is moving?
MR. KANYOMOZI: 786 and 787, Mr. Chairman, I am moving an amendment on sub-head, on
Code 870323.20 up to 87032400, and down on sub-head 87033220 up to 87033320. In fact,
these amendments would be welcome since we are looking for more regularly. These are on
vehicles above capacity of 1850, the bigger vehicles. And it does not affect the passenger
vehicles like buses and others. It is for personal vehicles. In other countries, Mr. Chairman,
certain types of vehicles of this nature both for petrol -(Interruption)
THE CHAIRMAN: Do those vehicles include cross-country?
MR. KANYOMOZI: Yes -(Laughter)- Mr. Chairman, these vehicles include the cross-country
and pajero. These vehicles should attract similar tax as those that attract daily tax. I am moving,
Mr. Chairman, that the capacities mentioned, the taxes consolidated should be 100 per cent, 150
per cent, 200 per cent and 250 per cent. Justification is that these vehicles are luxury for those
who can afford them and who can pay tax.
Secondly, we have protected those vehicles that we think are used by the ordinary person such as
the buses, the van and what have you.
Thirdly, we have even protected the pick-up and the double cabins that most of us spent on and
which are used for the campaigns.
Fourthly, as we are trying to get those people who can afford, a tax should be affordable and these
are the people who can afford to pay tax. Mr. Chairman, if you look at a cross board (Interruption)
THE CHAIRMAN: Hon. Kanyomozi, I do not have your amendment here. Where is your
amendment?
MR. KANYOMOZI:
amendment.
The amendment was -(Laughter)- hon. Karuhanga has taken my
THE CHAIRMAN: Order please. I do not have your amendment. No, no, you should have it
there. Amendments were not circulated. Where are they?
MR. KANYOMOZI: Mr. Chairman, these amendments were agreed on in the Committee. And
the Minister of Finance agreed that these amendments were once while for presentation.
THE CHAIRMAN: No, no, the amendment should come to the Chairman here.
MR. MAYANJA NKANGI: Mr. Chairman, me, as a Minister of Finance, I put forward certain
rates. The Committee was told it should raise its rates. I said to them, in your wisdom if you
think you should raise them, go and bring the amendment on the Floor and I shall support the
report. I never said go and follow the procedure of the House.
MR. RWAKAKOOKO: We are discussing a very important Bill and that is why we are going
on up to 6.00 O’clock. The amendments from the Committee of the Economy that were
circulated by Manzi Tumubweine on behalf of the Committee on the Economy. Mr. Manzi,
seeing 5.00 O’clock, let without making his amendments. That is okay. That is the problem the
Committee must go through, they will stress us later on. Now, we come to the Fourth Schedule.
I had given the responsibility of all these amendments to the Committee, so that they make their
amendments. But instead of circulating them because they to meet the Minister, and I was an
eyewitness. They were meeting the Minister from 9.00 o’clock until 1.00 o’clock today. They
agreed with me to make such an amendment. They have them already here. We are meeting at
7.00 O’clock and we are rushing them before they are introduced. If you want us to pass a proper
Bill, let us adjourn and do a Fourth Schedule later on.
THE CHAIRMAN: No, No, take your seat.
MR. MAYANJA NKANGI: I have said that, I did agree. I did agree that when these
amendments change, I will support them. I received through an issue of technicality coming in
here to say yes, but according to our procedures, his amendments should have been submitted. I
think what the Chair is saying and I think Sir, that we should be able to find a way of remedying
that technicality so that the amendment can go through.
MR. KANYOMOZI: Mr. Chairman, I am seeking your guidance. We were -(Interjection)
THE CHAIRMAN: Okay, move your amendment.
MR. KANYOMOZI: Mr. Chairman, I have already indicated which amendment, on page (Interjection)
THE CHAIRMAN: Proceed please. Order please.
MR. KANYOMOZI: Mr. Chairman, I moved the amendment on page 786 and 787, on subheads -(Interjection)
MR. BUTAGIRA: Point of Procedure. Mr. Chairman, you have allowed hon. Kanyomozi to
move amendments. But quite rightly, as you said earlier on, we do not have these amendments
and it is important that we have them. The proposed amendments are far-reaching, far-reaching.
Some of them include improving taxation for the Government. In fact, they should be welcome,
but the point I am making in view of this, one; we do not have these amendments that should
have been circulated, but he raised our wisdom and allowed him to move them, nonetheless.
Then from the hon. Minister he seems to have gone back, we do not know what they agreed on,
they are not agreeing, he is saying one thing, they are saying another one.
In view of this, I would crave your indulgence that we adjourn this House, we have these
amendments given to us so that tomorrow, we do a good job for this country, Mr. Chairman.
MR. KAFUMBE MUKASA: Point of information. I would like to inform you, Mr. Chairman
and the hon. Members through you, that it is not the Minister for Finance who is causing any
problem. I want to make this very clear. The agreement we made was that on the matter of this
agreement, reached this morning between the Minister that the Committee would take the
procedures if they decide to carry out these amendments, they would take the initiative and that
they agreed that motor vehicles of capacity between 2,000 to 2,250 to 3,000 and over 3,000.
They were proposing amendments to the proposals of the Minister of Finance.
The Minister’s position was, as far as he was concerned to propose those rates, there had been a
scrutiny done as to how much people were paying already, what had been the purpose, whether
they were able to pay and, therefore, what were the proposals? The Members thought in their
own opinion that we would get more money by just raising the rates. The Minister said, okay, I
would not start in the House and oppose you, but initiate this amendment, and convince the
Members whether by increasing the rates alone, you can increase revenue and if Members are
convinced, me as a Minister, I will not oppose you. That was the position.
So, it is now the responsibility, it was the responsibility and still remains the responsibility of the
Committee to follow the procedures and convince their colleagues that Government will raise
more revenue by hiking rates. So, I want this to be clarified so that it does not appear.
THE CHAIRMAN: The Ministry did not accept the amendment?
MR. KAFUMBE MUKASA: No, no, Sir, because what we are saying is that any measure is to
increase revenue, we cannot oppose it. But our proposal earlier on circulated, had taken into
study the past performance with these rates and we had found that we can only increase revenue
by meeting the proposed rates we gave. But that, we are not close to new proposals and,
therefore, it is the Committee now, to convince the House that by increasing rates we get more
revenue.
THE CHAIRMAN: Okay, in that case, we need a written amendment so that they are circulated
all around to the Members. It is better we adjourn now. Move for adjournment.
MOTION FOR THE COUNCIL TO RESUME
ME. KAFUMBE MUKASA: Mr. Chairman, I beg to move that the House resume and the
Council report thereto.
(Question put and agreed to).
THE COMMITTEE OF THE WHOLE HOUSE
MR. KAFUMBE MUKASA: Mr. Chairman, I beg to report that the Committee of the whole
House considered the Finance Bill and up to Schedule 4 and approved it, up to Schedule 3 with
amendments, but adjourned on consideration of Schedule 4 pending, the Committee on the
Economy supplying, proposed amendments in writing. I beg to report, Sir.
THE CHAIRMAN: With that we have come to the end of today’s Session, we adjourn until
tomorrow at 2.30 p.m.
(The Council rose at 5.50 p.m. and adjourned until Thursday, 28th October, 1993 at 2.30 p.m.).