President Museveni has explained the rationale behind not taxing cows as had been suggested by the Speaker of Parliament, Anita Among.
In a write up about taxes on Tuesday, President Museveni admitted cows, just like many other items are not taxed but for a reason.
“Is it true that all sectors are taxed? The answer is “not at all”. When you buy bananas, live cattle, milk, coffee beans, etc., from the South West of Uganda and bring them to Kampala, do you pay tax? The answer is “no”, other than the fees for the license to trade,” Museveni said.
“When you buy maize from Mubende, sweet potatoes from Teso, Irish potatoes from Sebei, Sim Sim from Kitgum, Oranges from Teso, etc., do you pay tax? The answer is “no”. There are, therefore, no taxes on buying produce and selling it.”
Museveni further explained that also among other items not taxed are the exports, both processed and unprocessed.
“We long ago abolished the export tax on coffee. Therefore, there is no tax on exports of any type. When you import machinery, medicine or rawmaterials, do you pay tax? The answer is “no”. Why are all these activities not taxed? It is because, we want to kweziimba (build ourselves). We encourage all that bitambuza omusayi gwaffe (blood circulation) e.g. produce buying and selling of Ugandan products or ebituzamu omusaayi (blood transfusion – machinery for production, raw materials, etc.).”
The president explained that the rational behind not taxing some of the items is to ensure the country builds a strong manufacturing sector.
While presiding over parliament last week, Among suggested that government widens the tax base, other than taxing the same sources every time.
“I own more than 2,000 cows and I am not charged any taxes, nor does anyone ask how much income I generate from them. We should broaden the tax base rather than cause the traders to struggle. Many people have numerous cows. The government should begin taxing them,” Among suggested.
The issue of taxing cows has since generated a lot of debate, especially online.
The entire debate arose from the recent protest by traders over the implementation of the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS) system.
