Uganda government drops proposed taxes on saving schemes, assets after public pressure

Deputy Speaker Thomas Tayebwa (PHOTO/Courtesy).

KAMPALA —The Government of Uganda has dropped tax proposals, including the 15% withholding tax rates on Unit Trust contributions or Collective Investment Schemes and another on assets following public protests.

This was revealed by Deputy Speaker of Parliament Thomas Tayebwa, who commended Ugandans for protesting against the ‘unfair’ tax proposals.

“Because of your push and feedback, we were also able to engage and the ministry of finance withdrew some of the proposals such as things to do with tax on assets. I’m really happy, we are going to remain with the capital gains the way it was without introducing any other tax on the sale of assets,” the deputy speaker said.

He was speaking on Tuesday May 2 at BDO-Signum tax breakfast meeting held at Serena Hotel in Kampala.

Tayebwa also confirmed that the tax proposal on collective investments was withdrawn, owing to public uproar.

“I want to thank the fund managers who reached out to us and explained the impact it would have on most of these investments, whereby most of the affected groups were young people who are trying to go into Saccos and other investment groups,” he added.

He explained that while Uganda seeks to increase the tax revenue to GDP ratio which stands at 13.6%, it should not come at the expense of people’s well being.

The gross domestic product in current prices in Uganda was forecast to continuously increase between 2023 and 2028 by in total 27.2 billion U.S. dollars (+54.63 percent). The GDP is estimated to amount to 76.99 billion U.S. dollars in 2028.

“The question is how do we achieve these projections that have been made. Do we introduce new taxes or check our tax administration measures,” Tayebwa wondered, noting that, from a business perspective, introducing new taxes in the current economic environment is likely to further hit businesses.

“It’s safer for our economy to say that for the next three years or so, we shouldn’t be introducing any new tax so that we first recover as a country.”

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