Published by Patra K on

Politics Behind Tax: Lessons for NRM at 35

An illustration showing Uganda's tax dilema. (Photo courtesy of the Observer)

Politics and economics are not necessarily bedfellows because when the two meet paths, politics captures economics. Yet, politics thrives best where there is good economics! Government is levying additional taxes on goods, products, and services to finance fiscal and budget gaps. In this vein, the Ministry of Finance has introduced UGX 100 tax on fuel, 12% additional tax on internet data, and 8% tax on fish maw.

Public opinion seems money collected in tax, ends up financing partisan politics and therefore people find no motivation to contribute to the national coffers. Indeed, not so long ago, President Museveni revealed that he chased a crowd of thieves from Uganda Revenue Authority (URA).

URA is casting her tax net too wide within limited tax options and “a citizen is taxed to the bone marrow”. One can argue that the tax body has violated all the known canons of a fair tax system. Whereas the citizens must pay tax, they hardly see the benefits of it in their lives. For example, they still have to pay for Medicare, Education, and roads are almost impassable.

The new taxes are increasing the cost of living and making it difficult for the ordinary person to survive. For example, the transport fares are going up, the cost of e-business is increasing. Above all, tax on data implies that the cost of education, health research, and delivery will go high (virtual education and medicine). To a common person, this translates into high prices for consumer services and goods!

Ironically the people that are well connected to the regime or its cronies, do not pay the tax, they evade it with impunity. The ordinary people see this, they know it but they know that the people involved are untouchable.

A government cannot grow the national economy when it is taxing its peoples to the bone marrow. It is important that government allows its citizens to have some disposable income to build sustainable purchasing power in the economy. An economy without purchasing power may not drive the country towards middle-income status.

One of the lessons to the regime as it embarks on its 36th year in office is to start by curbing the areas of pilferage such as addressing corruption and avoiding wasteful expenditure. A good place to start could be by reducing the number of cabinet ministers in the next government from 70 to 30.

Then control corruption in public procurement where it is a known secret that public projects in Uganda are always inflated and yet the quality is inversely proportional to the cost. A situation where corruption is planned, budgets, debated in Parliament and appropriated, as the case is in Uganda today, must be reversed.


Categories: Newsletters


Leave a Reply

Your email address will not be published. Required fields are marked *