Parliament has in a plenary session chaired by Speaker of Rt Hon Anita Among passed the final part of the raft of legislations meant to formally operationalize Islamic Banking in Uganda.
Chief among other things, The Income Tax (Amendment) No.2 Bill, 2023 is purposed to provide for tax measures through which Islamic Banking will operate in Uganda that heavily runs a conventional banking system.
The Income Tax Amendment Bill, No. 2, unlike other five Bills meant to operationalize Islamic Banking in the country, was on Tuesday deferred to Thursday after a section of lawmakers failed to harmonize on Clause 1 of the Bill.
In this, MPs including the shadow Finance Minister Mr Muwanga Kivumbi had raised fears that clause 1 of the Income Tax Amendment Bill No 1 would contravene Sharia law, a basis upon Islamic Banking operates.
This was however resolved on Tuesday resolved after Speaker Among directed the opposition leaning MPs and Attorney General Mr Kiryowa Kiwanuka to hold a private session and agree on the final position.
“Honorable Members I don’t any problems with that clause,” Speaker Among said and asked the Hon Asuman Basalirwa to furnish House with humanized position agreed upon.
In the aftermath of the meeting, Mr Basalirwa revealed that: “We have had a very fruitful discussion. The learned Attorney General and his side are of the opinion that wording of the Bill, where business is conducted under Islamic Banking, the provision of interest and taxes will not apply.”
He further indicated the Attorney General, Mr Kiwanuka had assured them that their fears had been catered for in the Clause of the same Bill.
It is upon this background that the legislators passed the Income Tax Amendment Bill, No. 2 to form part of the other Bills that will after assent by President Museveni operationalize Islamic Banking in the country. The other Bills include The Excise Duty Amendment Bill NO.2 2023, The Financial Institutions Amendment Bill, The Stamp Duty Amendment Bill 2023 and The Value Added Tax Amendment Bill NO.2 2023
Minutes after the Bill had been passed, the Shadow Minister for Finance Mr Kivumbi lauded government for enacting the said legislations that will now allow Islamic banking in Uganda.
“Islamic banking is not for Muslims; it is for the poorest of the poor in our community and it will help people irrespective of their religious background,” Mr Kivumbi said.
He added: “We would like to thank Gov’t for considering this product. In our humble way, it has been long overdue.”
The final versions of these Bills as passed by Parliament will now be prepared and sent to the President Museveni for assent before they can become law.