President Yoweri Museveni has returned the Excise Duties (Amendment) Bill 2022 to Parliament for reconsideration.
The President has written to the Speaker of Parliament, Anita Among, expressing concern over the proposal to impose an excise duty of 40% or Shs 4,000 on every kilogram of bags and sachets of polymers and other plastics, which was rejected.
He also challenged the reintroduction of a 20% excise duty on sweets. Vice President Thomas Tayebwa read out the President’s letter to MPs on Thursday.
“On May 18, 2022, this House passed the Excise Duties (Amendment) Bill, 2022. The Bill was duly forwarded for Presidential Assent in accordance with Section 91 of the Constitution. His Excellency, in a letter dated July 05, 2022, returned the bill for reconsideration of the House,” Tayebwa said.
In the letter, President Museveni said that the Excise Duties (Amendment) Bill 2022 submitted by the government proposes to impose excise duty at a rate of 40% or Shs 4,000 per kilogram. , whichever is greater, on bags and pouches of ethylene polymers and other plastics.
The only exception in the government’s proposal was for packaging bags for food, juice, tea and coffee and bags for direct use in the manufacture of sanitary napkins.
“Parliament rejected the previous provision and it is therefore not included in the bill. Parliament’s decision to reject the proposal jeopardizes the objectives the government intended to achieve through the Excise Duty Amendment,” the president’s letter read in part.
He said one of the government’s aims was to streamline the provisions relating to the taxation of plastic products as provided for in the Excise Duties (Amendment) Act 2021 with a view to ensuring that the targeting of excise duties excise be refocused on the sensitive sectors which use plastic elements.
Museveni also noted that it is also to address tax administration challenges related to its implementation and to urge owners of plastic recycling plants to step up their efforts to clean up the environment.
The president also questioned the reintroduction of a new clause in the bill that provides for a 20% excise duty on sweets.
“The excise duty on sweets was first introduced in the financial year 2014/2015 at 10% and was later increased to 20% in 2018/2019. However, the government removed it in the 2019/2020 financial year following complaints from manufacturers that their products were competing with cheaper smuggled imports,” Museveni noted.
He said Parliament’s decision to reintroduce the tax has implications as it runs counter to the government’s decision not to raise taxes in the current financial year 2022/2023, which was intended to support a rapid economic recovery, especially given the general increase in the prices of goods and services.
The President asked Parliament to remove the clause introducing the tax on sweets and also to approve a government proposal to impose an excise duty of 40% or Shs 4,000 on each kilogram of bags and sachets of polymers and other plastics.
However, the Leader of the Opposition, the Hon. Mathias Mpuuga, said the bill was meant to serve the intentions of the budget for the current fiscal year which started on July 1, 2022. He said it has been more than a month since parliament passed the bill. law and called on ministers concerned with tax bills to always ensure that such delays of bills do not occur as it disrupts sector budgets.
Distributed by APO Group on behalf of the Parliament of the Republic of Uganda.
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