Parliament last Thursday rejected the proposed increase of taxes on used clothes and shoes, diapers, cement and driving permits, citing the biting poverty and unemployment in the country.
Speaker Rebecca Kadaga reminded government that the 7th Parliament exempted diapers and wondered whether Finance ministry was smuggling the new tax. “If you produce evidence of the factories manufacturing diaper in the next financial year and whether they are enough for Ugandans, we will consider the proposal. For now we won’t allow you to tax children,” Ms Kadaga said.
Government had wanted to increase tax on cement by Shs1,000 but MPs rejected the decision in order to promote the construction industry. The House decision on some taxes means the government will not collect about Shs100 billion. The MPs also wanted to block the taxes on fruit juice but after the minister pleading, they accepted it.
Ms Jova Kamateeka (Mitooma) tried to defend Planning minister David Bahati on used clothes but she was reminded by Fox Odoi (West Budama North) that “in a second-hand economy, you must protect used clothes and shoes because they are very critical to the people.” Ms Kamateeka had proposed that the tax be increased from 15 per cent to 17 per cent but she was booed. State minister for Health Sarah Opendi also stood to oppose the government position on the tax on used clothes, shoes and other second-hand articles. The minister asked her colleague to withdraw the proposed tax increment from 15 per cent to 20 per cent.
The first person to oppose the tax on used clothes was Ms Betty Amongi who reminded the House that majority of Ugandans including MPs wear used clothes. Bundibugyo MP Harriet Ntabazi said “the problem in this country is unemployment, the people selling used clothes and second-hand shoes have jobs. What will happen if they lose their jobs? They will become criminals. The tax would make sense if we had factories.”
Mr Muhammad Nsereko (Kampala Central) said: “With biting poverty, unemployment and the meagre incomes of our people, we should not increase taxes on second-hand articles.”
Parliament also increased the tax on gaming and lotteries from 20 per cent to 35 per cent to protect the betting youth from the dangers of gambling. Some lawmakers had wanted to put the tax at 50 per cent but they were persuaded by the Speaker to accept 35 per cent as a compromise.
Parliament also rejected the proposed tax increase on driving permits.