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Kampala, Uganda | THE INDEPENDENT | President Yoweri Museveni has returned the Excise Duty (Amendment) Bill, 2022 to parliament for reconsideration.
In his letter to the Speaker of Parliament Anita Among, the President raises concern about the rejected government proposal of imposing 40 percent or 4,000 Shillings excise duty on each kilogram of sacks and bags of polymers and other plastics.
The President also contests the re-introduction of a 20 percent excise duty on sugar confectioneries by Parliament.
His letter in which he returned the Bill for consideration was on Thursday read out to Parliament by Deputy Speaker Thomas Tayebwa.
“On 18th May 2022, this House passed the Excise Duty (Amendment) Bill, 2022. The Bill was duly transmitted for presidential assent pursuant to Article 91 of the Constitution. His Excellency in a letter dated 5th July 2022 has returned the Bill for reconsideration of the House,” said Tayebwa.
In his letter, President Museveni says that the Excise Duty (Amendment) Bill, 2022 submitted by the government proposed to impose excise duty at a rate of 40 percent or 4,000 Shillings per kilogram whichever is higher on sacks and bags of polymers of ethylene and other plastics.
The only exception in the government proposal was packaging bags for food, juices, tea, and coffee and bags for direct use in the manufacture of sanitary pads.
“Parliament rejected the foregoing provision and it is thus not included in the Bill. The decision by parliament to reject the proposal undermines the objectives government intended to achieve through the excise duty amendment,” says Museveni in part.
He explained that one of the government’s objectives was to streamline the provisions for taxation of plastic products as provided for in the Excise Duty (Amendment) Act, 2021 with the view to ensuring that the targeting of excise duty is refocused away from sensitive sectors that utilize elements of plastics.
Museveni also notes that this was to also address tax administration challenges associated with its implementation and incentivize owners of plastic recycling plants to enhance their efforts toward cleaning up the environment.
The President also questioned the re-introduction of a new clause in the Bill that provides for excise duty at 20 percent on sugar confectionaries.
“Excise Duty on sugar confectionaries was first introduced in the financial year 2014/2015 at 10 percent and was later increased to 20 percent in 2018/2019. However, the government removed it in the financial year 2019/2020 following complaints from manufacturers that their products were being outcompeted by cheaper smuggled imports,” Museveni notes.
He says that parliament’s decision to reintroduce the tax has implications since it goes against the government’s decision not to increase taxes in the current financial year 2022/2023 which was intended to support speedy economic recovery especially given the general increase in prices of goods and services.
The President requested parliament to delete the clause, introduce the tax on sugar confectionaries and also approve a government proposal of impose 40 percent or 4,000 Shillings excise duty on each kilogram of sacks and bags of polymers and other plastics.
Tayebwa sent the President’s concerns to Parliament’s Committee on Finance for consideration and report back to parliament in two weeks.
However, Mathias Mpuuga, the Leader of Opposition said that the Bill was supposed to serve the intentions of the current financial year budget that started on 1st July 2022. He said that it is more than a month since parliament passed the Bill and appealed to the Ministers concerned with tax bills to always ensure that such delays do not happen since it disorganizes the sector and budget.
Tayebwa said that this was a genuine concern and he asked Prime Minister Robinah Nabbanja to take note of the concerns raised by Mpuuga.
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