Thursday morning in the Ministry of Finance Conference Hall, PSST Keith Muhakanizi announced the release of more than Shs3.2trn to the different government Ministries Departments and Agencies (MDAs) for the first quarter under the FY2018/19. Local governments too are beneficiaries meaning if you are a service provider who had been asked to wait for the Muhakanizi release, this is the best time to strike and strike hard until you are paid. The breakdown of this release is as follows: more than Shs4.2bn for wages, Shs6.6bn for non-wage expenditures, Shs5.2bn for GoU development, Shs7.7bn for external financing and Shs7.78bn for debt and treasury operations as well as more than Shs1bn for Appropriation in Aid. As he released this information to the public in order to increase accountability with Ugandans being expected to follow up on the impact on service delivery, scribes asked Muhakanizi for his views on majorly two things. One is the apparent lack of government cohesion that has followed the public outrage that greeted the introduction of OTT taxes and that imposed on mobile money transactions. He was also asked about the treasury’s readiness to find close to Shs80bn that will be required to buy escort pickup trucks for each of the more than 400 MPs. The President says this is meant to carry the military escorts that will be attached to each MP in order to enhance their personal security. Whereas he freely discussed the tax issue, Muhakanizi was unusually timid and tight-lipped when asked to comment on the extent to which the President’s directive would distort budgeting priorities and allocation of resources in the new budget. “We are definitely paid to technically advise the President and this is something we have always done. We shall be doing the same even on this matter but the truth is I don’t want to give my views now in this meeting. Go and look for the minister to whom that letter was addressed and get the official response of the finance ministry from him,” said Muhakanizi who reacted furiously when journalists insisted this news conference was the best platform for him to share his views on the matter. Instead he, at length, discussed the issue of taxation but still avoided specifically speaking about the OTT tax and the political problems it has since created for President Museveni and his NRM government. He said with the GDP tax ratio being at just 14%, Ugandans should be proud for being among the least taxed people in the world. The Sub Saharan African average GDP to tax ratio is 18% and Muhakanizi said it’s improper for Ugandans to complain at just 14%. He said because of low levels of taxation, Kenyans sometimes come to Uganda to buy certain items like clothes because it’s cheaper in Kampala than in Nairobi because of low taxes. He said the European tax incidence is at 45% “and it’s because their people are being adequately taxed that those European countries are able to have an excess to give us grants.” He said this is bad and Ugandans should be ready to be taxed more to enable their government overcome the dependence syndrome. He said the fact that 80% of the 14% GDP tax ration is being paid by not more than 100 tax payers is proof that many Ugandans actually don’t pay taxes at all. He said the fact that corporate tax is at just 30% and VAT at just 18% is all proof that the Ugandan government is too lenient when imposing taxes on its people. In most countries, he said, corporate tax is over 40% of any business entity’s profits. He was flanked by many Ministry officials and stakeholders including Civil Society Budget Advocacy Group’s Julius Mukunda who after Muhakanizi’s departure addressed reporters and sharply criticized the President’s directive. He advised the President to instead invest the Shs79bn into boosting the capacity of police and other security agencies to enhance their crime intelligence gathering capabilities. For comments, call/text/whatsapp us on 0703164755.
