The Forum for Democratic Change (FDC) has called for a fair and progressive tax system in Uganda, warning that the growing tax burden is discouraging investment and driving small businesses out of the economy. According to FDC Deputy Secretary for Publicity, Publication and Documentation Mulindwa Walid Lubega, the government should focus on fewer, fairer, and predictable taxes. This would enable people and businesses to contribute according to their ability to pay.
Lubega criticized the current tax regime, stating that it places an excessive burden on small traders, farmers, and low-income earners, while discouraging entrepreneurship and business expansion. He particularly opposed new taxes on mobile money, restrictions on rental income, heavy fines imposed by the Uganda Revenue Authority (URA), and the proposed conversion of Tax Identification Numbers (TINs) to National Identification Numbers (NINs).
The FDC deputy secretary criticized the taxation of mobile money transactions, stating that it hurts financial inclusion, as mobile money has become an important means of saving and conducting transactions for ordinary Ugandans. He described taxing mobile money as "taxing poverty and financial inclusion." Lubega also opposed the taxation of rental income, citing that many Ugandans have invested their retirement savings in rental properties and are now being subjected to double taxation.
Lubega expressed concern over URA penalties, stating that they threaten the survival of small businesses. He noted that small traders in Kikuubo, Owino, and across the country live in fear of losing all their capital to a single fine. Additionally, Lubega opposed using the NIN as a basis for tracking citizens for taxation, arguing that tax administration should be based on economic activity.
The FDC deputy secretary called for the suspension of mandatory Electronic Fiscal Receipting and Invoicing Solution (EFRIS) enforcement against small traders until they have been adequately sensitized and provided with the necessary equipment. Lubega questioned why Uganda continues to borrow heavily despite a significant increase in domestic revenue collection, attributing the continued accumulation of debt to misuse, extravagance, and theft of taxpayers' money.
Lubega stated that increased tax collections should be reflected in better roads, healthcare, and other public services, instead of forcing the country to continually borrow. He emphasized that a fair tax system would encourage voluntary compliance, expand the tax base, and create an environment where businesses can grow. Lubega called on the government to scrap oppressive taxes on mobile money and rental income, review URA fines, and abandon the use of NIN as a "tax trap."
The FDC deputy secretary emphasized the need for greater accountability in the use of public revenue, stating that taxpayers should see their money reflected in improved infrastructure and social services. He concluded that an unfair tax system kills the tax base and urged the government to implement a fair and progressive tax system to encourage entrepreneurship and business growth.
Key points
- The FDC has called for a fair and progressive tax system in Uganda.
- The current tax regime is discouraging investment and driving small businesses out of the economy.
- The government should focus on fewer, fairer, and predictable taxes.
