Presidential Adress -We Won’t Reduce Taxes, It’s Suicidal For Our Economy- Museveni To Ugandans Crying Out For Tax Reductions

Presidential Adress -We Won't Reduce Taxes, It's Suicidal For Our Economy- Museveni To Ugandans Crying Out For Tax Reductions

President Museveni

By Uganda Online Media

Kampala: President Museveni has rejected the idea of subsidies, tax waivers or price control as a solution to the current rise in commodity prices.

While addressing the nation on the current economic situation, Museveni noted that waiving taxes or offering subsidies is suicidal to the already declining economy.

Museveni noted that “Removing taxes or subsiding imports is suicidal and a blunder. I had sympathy for locally produced goods like sugar, and cement because if people buy more of them it would be good. This was until I went to the cabinet and looked at the taxes we would lose.

Uganda Airlines To Launch Flights To London, India, DRC After Successfully Conducting Feasibility Studies

“Some of the ideas people think about when confronted with high commodity prices, are the idea of subsidy (overnment okutukwatirako) or removal of taxes by the government from those commodities. With imported commodities, this is a recipe for disaster. It will lead to collapse”.

Due to the escalating commodity prices, Members of Parliament and several Ugandans have been calling upon the government to reduce taxes on essential commodities however according to t Museveni, this will not help the economy.

Click Here To Read Museveni’s Full Speech

Museveni noted ”if we subsidize or even just remove the taxes on imported commodities, the level of consumption will either remain the same, but this time each litre taking more dollars, or actually increase. The dollar drain will now increase per litre and also, worse, people may buy more of this expensive commodity.

“How, then, do we fund our budget for –roads, electricity, schools, medicine, security, etc.? There are items we do not tax – eg. Medicine, raw materials, etc. It is, therefore, not true that we tax everything. The very crucial items are not taxed. Therefore, removing taxes or subsidizing many of the imports is suicidal and a blunder.

“In my head, I had sympathy for removing taxes on locally produced goods such as sugar, milk, cement, etc. because, if People buy more of them, it will be good, they would be buying more local goods. This was until I looked at the taxes to be lost. On sugar, we would lose Shs 193 billion, on cement, Shs 200 billion, steel Shs 120 billion. We could see that the route to tax cuts and subsidies, even for the locally produced goods, was not a wise one.”

“These three alone are already would be more than half a trillion in tax loss. A road like Kampala –Masaka we used shs440 billion to construct it. If we offered tax waivers, the money lost would be more than that used to construct the Kampala-Masaka road. 

Leave a Reply

Your email address will not be published.