News & Up­dates:

Parliament has rejected the proposal by Kampala Central MP, Muhammed Nsereko to exempt Value Added Tax (VAT) on wheat bread and five-year-old computers.

Nsereko had through a minority report of the finance committee, proposed that bread or any of its inputs such as wheat should be VAT exempt to make it affordable for citizens who, he said were already grappling with the skyrocketing price of essential commodities.

However, Martin Muzaale the Buzaaya County MP told the house that Parliament needs to develop an approach to comprehensively look at the tax laws with the intention to release the pressures on citizens as opposed to piecemeal proposals such as what Nsereko had brought to the fore.

Muzaale added that instead of looking at bread only, it would have been equally good if Parliament varied by way of reduction or outright exemption, VAT on fuel, which he said has an effect on all other basic commodities.

Dickson Kateshumbwa the Sheema Municipality MP said that it doesn’t make sense to tax bread as most of the bread inputs such as wheat already have VAT imposed on them. He said that imposing VAT on bread will increase the cost of bread which is a burden to the consumers

In another proposal, Nsereko suggested that there should be an exemption of VAT on computers that are five years old.

“Removing VAT on computers five years older would help families afford laptops which are increasingly becoming the basis of learning in Uganda”, Nsereko said.

While responding to Nsereko’s proposal, the West Budama North MP, Fox Odoi Oywelowo told the House that importing five old computers into the country would be an environmental hazard.

“A five-year-old computer is due only for destruction; they are an environmental hazard. Destroying them is expensive and Uganda cannot afford it,” he said.

House Speaker, Anita Among told Parliament that instead of importing 5-year-old computers it would be better to provide requisite conditions for the assembly of computers in the country.

“Are we encouraging this country to be a dumping ground? If we can have Kiira Motors [a vehicle manufacturing and assembly plant], why can’t we instead push for an assembly plant to assemble computers from here?” she wondered.

In the bill passed by the House, imports used by businesses in exempt supplies have also been slapped with VAT.

In addition, Oxygen cylinders and oxygen for medical use, and assistive devices used by persons with disabilities have been exempted from VAT.

Educational materials including those manufactured in any of the East African Community countries will also be exempt from VAT should President Museveni assent to the VAT Bill passed by Parliament.

Clause 5 of the Bill also created an exemption of VAT on Sanitary towels, menstrual cups, tampons and the inputs for the manufacture of sanitary.