Masaka Bishop opposes levying of income tax on not-for-profit health facilities

Masaka, Uganda | THE INDEPENDENT | The Masaka Catholic Diocesan Bishop Severus Jjumba has challenged Parliament to rescind a decision of levying income tax on private not-for-profit health facilities.

Bishop Jjumba is afraid that the levying of income tax is an additional financial burden that will negatively impact their operations and service delivery.

In 2019, the government introduced amendments to Section 38 of the Income Tax Act to insert a new subsection that requires taxpayers who have carried forward assessed losses for a consecutive period of seven years of income to pay a rate of 0.5 percent tax on gross turnover for the period after seven years.

Bishop Jjumba indicates that the different catholic church-founded health facilities in the area have started receiving invoices from the Uganda Revenue Authority-URA requiring them to meet their tax obligation.

He argues that their health facilities don’t make any income from their operations, describing the demand as a sheer absurdity. He has asked parliament to reconsider the tax which he says has come to frustrate the operations of private not-for-profit health facilities.

Masaka Diocese whose jurisdiction extends into 10 districts manages 31 health centers and two hospitals, St Joseph’s Hospital Kitovu and Villa Maria hospitals in Kalungu and Masaka districts respectively. Revered father Emmanuel Katabaazi, the Masaka Diocesan Health Coordinator indicates that their facilities are already financially constrained, arguing the income tax will limit the affordability of healthcare by low-income earners.

He decries that the government already created a structural inequality in the payment structures when it increased the salaries of its health workers yet the private not-for-profit facilities can’t afford the same increment on top of the hike in operation costs apparently.

“These facilities operate on very tight budgets because of the nature of our work. On top of the little user fees collected from patients, we solicit support from well-wishers and other generous groups to complement us. It is therefore improper to subject us to this tax,” he says.

Dr. Alfred Lumala, the Medical Superintendent of St Joseph’s Hospital Kitovu also indicates that they can’t take in the income tax levies, indicating that they have already engaged the area members of parliament and accordingly presented their worries.

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