A recent proposal to increase taxes on petroleum products, including petrol, diesel, and kerosene, is causing apprehension among consumers as the specter of fuel price hikes looms large.
The government’s proposal, outlined in the Excise Duty Amendment Bill, 2024, aims to raise taxes on petrol from Shs1,450 to Shs1,550 per litre, diesel from Shs1,130 to Shs1,230 per litre, and kerosene from Shs200 to Shs500 per litre if approved.
If passed, this move is expected to lead to a surge in fuel prices across Uganda, further burdening consumers.
In addition to the proposed petroleum tax hike, the government also plans to introduce a 5-percent withholding tax on gains from land sales in cities and municipalities, rental property sales, and shares of private companies, as outlined in the Income Tax Amendment Bill 2024. Taxpayers would be required to remit this tax to URA within 15 days of asset disposal, or face fines for non-compliance.
While previous attempts to impose withholding tax on land transactions faced resistance from Members of Parliament, concerns persist that such a tax could inflate land prices beyond the current market rate.
On the bright side, the Ministry of Finance has proposed tax exemptions for locally manufactured electric cars and electric vehicle charging equipment, aiming to promote their production and use in Uganda.
Additionally, the proposal includes tax exemptions for products such as ethanol-using cooking stoves, agricultural implements, fertilizers, pesticides, and seedlings until June 30, 2028.
The proposed tax changes reflect ongoing efforts by the government to reform the tax system and incentivize certain industries while generating revenue, but they also raise concerns about their potential impact on consumers and the overall economy.
