Government is being told to widen its tax base to strengthen its fight against poverty.
Tax base refers to the sum of taxable activities, collective values of real estate,and assets subject to tax in a country.
Like many developing countries, Uganda's government budget is currently facing serious challenges, aggravated by heavy capital spending commitments on education, roads and the reliance on few sources of revenue.
Dr Evariste Tumwijuke, a Senior Research fellow at the Economic Policy Research Centre, says the current tax base is too narrow to support the rising expenditures for many Ugandans.
Tumwijuke argues that tax collection has been thwarted by several irregularities and discrepancies. He wonders the criteria used to exempt a farmer who owns 200 heads of cattle from taxation, while at the same time imposing 30% taxation on a teacher who earns 200,000 shillings.
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Tumwijuke is unhappy about government's failure to strengthen its tax regimes. He maintains that the tax base must be widened beyond the revenues earned from Pay as You Earn, and Value added tax.
Syda Bumba, the finance minister agrees that the tax base needs to be widened. In order to widen the tax base, government plans to widen taxation to other sectors. According to the minister, government will introduce taxation on incomes and estates.
The minister however says this could not be spelt out in this year's budget, owing to the global economic meltdown.
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Government collects only 14 % of the Gross Domestic Product from taxes compared to the sub Saharan level of 19 percent.
Oduman Charles , the Bukedea County MP , also opposition Shadow Finance Minister says the tax base would have been widened by now if government had pursued the idea of issuing all Ugandans with Tax Identification numbers.
He argues that the local services tax which was introduced during the last financial year, has failed to hold ground, because it is hard to identify the potential tax payers even at local level.
