By John V Sserwaniko
For the Thursday taxation public policy dialogue at Uganda Management Institute (UMI), Finance Minister Matia Kasaija was unusually early & walked into the meeting hall almost 30 minutes to time. He was ushered in by UMI Director General Dr. James Nkata and Director Programs Dr. Mulindwa Kasozi. Head PR & Communications Peter Kibazo walked closely behind them to the conference hall where another team of UMI officials, led by Associate Prof Gerald Karyeija, were already waiting. When he finally got to speak, Kasaija (who was here to preside over the opening ceremony) confessed it’s the academicians and researchers (who filled the audience) that knew almost everything. He added that politicians don’t know as much-and they don’t have to. To subsequently discuss papers relating to the subject of taxation (which dominated Parliamentary debate that same week) were distinguished scholars and researchers like Makerere’s Dr. Willy Kagarura, Prof Karyeija, NPA’s Dr. Asuman Guloba and Prof William Kaberuka just to mention a few. URA Commissioner General Dorris Akol had been expected but was represented by research & policy supervisor Ronald Waiswa whose eloquent presentation left many convinced that URA has high concentration of brain power. Speaking in a subsequent session from the audience, Frank Katusiime described Waiswa as a “low-profiled officer who is very eloquent and deeply knowledgeable” thanked the young man for speaking in a manner that was consistent with the URA he previously worked for. Himself a former researcher at URA for more than 10 years, Katusiime eventually criticized the tax body for failing to deploy a more senior person given the importance of the event and the presence of Minister Kasaija who politically supervises URA. Adrian Beinebyabo of UMI ably moderated the different sessions.
WHAT KASAIJA SAID;
The minister said many things but one of those that stood out for news purposes was the confession that he had lately realized something wrong has terribly happened to the economy. He referred to two recent incidents that greatly impacted on him personally. Renowned for his pragmatic approach and honesty, Kasaija said he recently masked himself and sneaked into the Kikubo trading hub where he observed a remarkable decline in the economic activity in what used to be the busiest part of Kampala’s Central Business District. The second observation was at Kampala Club where he is a member and occasionally goes to play tennis. “I was there for hours and was shocked to see what used to be a very busy place empty and deserted. The people there were less than three and the staff told me it’s ever like that. They said people are poor these days and I left wondering what exactly is happening. Is it inflation as those staff said or is it the issue of poverty?” Kasaija wondered to the UMI audience in his characteristic honesty. “That place used to be full of people but on that day by 7pm I was there alone. Where have all the others gone? What is it that we aren’t doing right as a country? That’s a good area you researchers at UMI can help us because we can’t know everything. You should research and scientifically inform us what exactly has gone wrong. The good thing with UMI is that they do scientific research and not just Lugambo [rumors]. I want hard facts on what is causing this so that we come up with appropriate interventions. I don’t agree that its inflation. That would be pure Lugambo because we have always had inflation even worse in this country.” Kasaija said much as he is a minister, there is a lot he doesn’t know and nobody should expect him to know everything. He gave reasons why his knowledge can sometimes he limited on certain things. “I’m too busy as your minister of finance and can’t get the time to research on everything like you people here but the good thing UMI research is well aligned to international standards. It’s something that cabinet can rely on for policy formulation without any fear because it’s credible. I’m always in New York negotiating for money. If not that I’m in cabinet [in] Entebbe State House. From there I go to the ministry and by the time I reach there so many people are waiting to see me at 7th floor. As I’m seeing them, the President calls and wants me back to Entebbe for some other meetings. So in the end I can’t get time to research and know all these things but the good thing UMI is there and they are collaborating very well with the cabinet secretariat to use research to enrich decision making in government,” Kasaija said. His positive remarks (from both his scripted speech and off the cuff comments) caused Dr. Nkata and UMI governing council chairman FX Lubanga (who sat next to him) to beam with blessedness.
LEVERAGING ON ICT;
The good thing, Kasaija said, today’s researchers don’t have to sweat much like before looking for information because ICT-enabled googling has made things easier. He said whereas in the past people accessed info through faxing that took days to return feedback, today it’s a matter of clicking away. Kasaija enumerated areas where government is stuck and UMI can inform prudent interventions through undertaking research. These include why the population is very averse to the introduction of OTT and the mobile money tax which he said he is on record opposing from day one. “Paying tax is part and parcel of human life and we acted in good faith to say since Shs4trn is being transacted at any one moment in the mobile money space, let’s introduce a little tax and partake of that. But we are puzzled why there is so much aversion even after lowering it to 0.5%. We also have unemployment which can only worsen. The other day I was returning from Tororo to inspect the [Dong Song] project and was shocked seeing thousands of pupils walking back from school in Namayingo. I asked myself ‘ooh God where are they going to be in 2030?’ It’s a real problem and we in government have no magic bullet solution. We look forward to the academia at UMI to do serious research and advise us on the mitigation measures because if jobless, those children are going to be a problem for all of us including the very rich,” said Kasaija before turning his guns to the young people. “This country has come from far. When I was studying at SMACK Kisubi in 1960-1963, my father would send me money from Kibale and it took weeks to reach me but today with mobile money it’s instant. These things weren’t there but they are here now because NRM has enabled them.” He said whereas he supports those who choose to do activism and denounce human rights violations “it’s not good for us to create an impression in the media that Uganda is at war with itself because money fears noise.” He explained that a small negative report in the media can have big impact on how would-be tourists and foreign investors perceive Uganda. “I’m the one who always meets these people from all over the world as finance minister. You see them shunning us because of endless political agitation on the streets. It’s okay to defend human rights but let’s avoid things which make us look like a country at war. Why would anybody go for VPN which is more expensive simply because you want to deny government Shs200 for OTT? These are areas UMI should do research for us with scientific facts and not just Lugambo.” Kasaija admitted wastefulness of some government bureaucrats makes the tax-paying population resentful “but let’s pay the tax and have that as another debate.” He said: “Some accounting officers ask for Shs5bn to have a workshop in Munyonyo. Really? But the good thing is you have a government that is responsive to public opinion. That’s why we listened and reduced mobile money tax to 0.5%. There could be something we aren’t doing right and we shall count on UMI to come up with credible research to inform policy re-alignment where necessary.” He said UMI now has leverage to directly influence business in cabinet “because the Cabinet Secretariat, which determines the agenda for cabinet meetings, is working with you very closely and we are very happy about it as government.” Kasaija also defended GoU tax policy saying it’s the least exploitative in the region because the tax to GDP ratio is at 14% against the regional average of 18%.
SUBSEQUENT SPEAKERS;
Later in the day, speakers disagreed with some of the things Kasaija had said before proceeding to open the UMA annual trade fair in Lugogo. Dr. Kagarura of Makerere said the mobile money tax is exploitative because telecoms already charge customers for using the service and it’s the telecos that government should tax because that’s income to them. He said even when it’s true over 60% of the MM transactions occur in a space that isn’t informally captured, the methods of collecting this MM tax should be revised to make it less direct. NPA’s Dr Asuman Guloba said it was deceptive to put the Ugandan tax/GDP ratio at just 14% “because there are many other indirect taxes Ugandans pay-for instance money spent on a security guard simply because government security is inadequate or the money one spends to access decent medication because of the bad state government facilities are in.” Guloba, who insisted these were his views as an economist and not NPA’s, also said its taxation when Ugandans put together money to erect a police facility in their community because government hasn’t done so. “Even a motorist whose vehicle keeps breaking down and consuming money because of bad roads is incurring some indirect tax which is why it’s a blatant lie to put the tax ratio at 14%,” he said. Some regretted Guloba was speaking after Kasaija had left for UMA. “Tax compliance and payment should always be linked to service delivery otherwise we shall keep saying wrong things,” Guloba controversially said. Speaking immediately after Prof Karyeija who attributed hostility to taxes to the “political legitimacy doctrine,” URA’s Ronald Waiswa explained why there was public aversion against OTT and MM tax. He said this is because there was too much awareness yet this was a direct tax enabling the public to immediately know and feel the pinch the moment it took effect. “Otherwise we have had more painful tax policies that reduced people’s disposable incomes than OTT and mobile money tax,” he said adding that in future more indirect approaches should be used. He also said the MPs’ lukewarmness manifested in some of them saying they weren’t using the I-pads anymore because of OTT only hardened and radicalized the public against the new tax. Prof William Kaberuka (whose Uganda Development Policy Management Forum teamed up with David Pulkol’s African Leadership Institute & UMI to organize the dialogue) drew on his past experience as MP, Presidential advisor and government official to support Kasaija’s calls on UMI to spearhead a research project to help government know why Ugandans are all of a sudden becoming very averse to new taxes. “I was very active in the public sphere in 1986 and we introduced many very painful policies yet people enthusiastically came along with government and always bought into whatever government came up with,” said Kaberuka insisting being required to pay MM and OTT taxes wasn’t the biggest sacrifice the NRM government has ever asked Ugandans to make “yet the averseness has never been this pronounced.” Pulkol said public corruption, that mostly goes unpunished, is responsible for public averseness towards taxation. “We have come to a point where wealth declaration should stop because all that data is just there gathering dust. It should be made public and subjected to public scrutiny. Instead we should now pressurize government to have the assets declare their owners. We start with Kampala road and say will the owner of this property come up? We then can begin to interrogate where he or she got the money,” Pulkol said attracting applause. Earlier speakers had decried excessive use of cash as opposed to cashless transactions but Pulkol said the MM tax would only escalate the problem. UMI staffer Resty Mwogeza insisted OTT had been introduced because government wanted to constrained citizens’ capability to debate and scrutinize its actions like human rights violations. “Let nobody insult Ugandans that it’s about gossiping. It’s really painful to call scientists, who use the internet for research, or even medics gossipers when we all know how much we depend on the internet to do our research,” she said showing lots of resentment towards bad governance in this country. These policy dialogues are to be held quarterly by UMI in partnership with Pulkol’s AFLI and Prof Kaberuka’s UDPMF. For comments, call/text or whatsapp us on 0703164755.
