News / Economy

Economists: Uganda’s New Taxes Target Poor

FILE - A Ugandan man cleans his clothes at the Makerere Kivulu slums in Kampala.
FILE - A Ugandan man cleans his clothes at the Makerere Kivulu slums in Kampala.

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Uganda's government has been struggling to find new sources of income since Western donors cut funding over the anti-homosexuality bill passed late last year. Economists say a raft of proposed new taxes unfairly target the poor, particularly farmers.  

Uganda’s proposed new budget, unveiled by the finance minister last week, aims to fill at least part of the shortfall left when some Western donors withdrew millions of dollars in aid earlier this year.  

But Ugandan economists pointed out Tuesday that many of the proposed new taxes would hurt the most vulnerable members of society.

Speaking at a conference of economists in Kampala, they described these taxes as “regressive.”  Items like salt and kerosene, which are subject to new taxes under the budget, are disproportionately used by the poor, they said.

A tax on agricultural inputs also came under attack. Civil Society Budget Advocacy Group coordinator Julius Mukunda says taxing such basic supplies as garden hoes unfairly targets subsistence farmers, a sizeable percentage of Uganda’s population.

He says this could have broader consequences.

“You tax a hoe - that is how desperate we can be," he said. "All these ones are going to make everyone who is deriving his livelihood from agriculture to suffer. If we have been fearing food insecurity, if we have been fearing drought, be rest assured [that] it is going to be at our door come next financial year if these proposals are put in place.”

The Ugandan government has argued that in order to increase public spending in the coming year, as it plans to do, it has to raise revenue through taxes. New taxes are also being proposed on fuel, sugar and mobile money transactions.

The Ugandan parliament still has to vote on the budget before it becomes law. The vote is expected in September.

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by: 1worldnow from: Earth
June 26, 2014 11:36 PM
Eusebio, what the heck did you say??? Good grief, man, Axial is in Uganda and the English in that comment is fine! Taxing the poor! Where are all the filthy-rich African-American entertainers screaming injustice for their brothers and sisters? Oh, my bad, they claim their African heritage, but could care less about Africa. Oh how naive of me! No government should ever ask anything from the poor, ever! The government should always be asking the poor "What can we do for you?" The government should be asking the wealthy "Why are you rich when we have so many poor?" Yeah, our poor here in the US do get taxed, but they do get it back at the end of the year, most of them also qualify for extra tax credit, which means they get more back than what they gave. If your government was offering that type of tax relief to your poor, then I would say it sucks, but at least they will get it back.

What is going on in Uganda? Taking money from the poor?

by: Axial College Uganda from: Ugand
June 23, 2014 5:42 AM
The tax is unfair. There are other things which could be taxed - corporations should be taxed instead of small scale farmers and communities - who also don't have access to alternative sources of machinery other than hoes. The tax will have a negative impact on Uganda's poverty reduction policies. Food insecurity is a real possibility. Increasing revenue is necessary, as there has been an over-reliance on foreign aid - however, the biggest concern should be with what the Govt. spends the new revenue on anyway.

by: eusebio manuel pecurto from: Portugal
June 19, 2014 12:39 PM
stop state of Uganda the peoples poor not of injustice the state of welfare the peoples poor should come state

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