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When you travel across the world, you wonder whether we have leaders or jokers governing the country. Look at Indonesia here, a country of only islands but very beautifully developed.
Back home in Africa, the government of Ghana under the leadership of the NPP has abolished almost all taxes on services. Their argument is that they want to enable the private sector players to make money so that they pay taxes.
In Uganda, it is the opposite. On Tuesday 2nd October 2018, our NRM colleagues as usual ganged up against the voice of reason and logic and passed the 0.5 tax on Mobile Money transactions.
This tax in not just illegal but extremely unreasonable. In passing MM tax to recipients, you are mostly taxing the poor who are not bankable and you are taxing capital not profits.
Secondly, taxation calls for fairness and so, if there is taxation on withdraws, then there should be a tax for those who go to withdraw money in the banks.
MM tax is a very unprogressive tax; it is not tax on production but on capital. A progressive tax is one made on profits. What profit does one make by receiving money for medical bills from a relative? If government wants money from Internet users, they should be taxing on-line businesses like Uber, Taxi5 and others who by the way are making profits and repatriating them to America rather than targeting poor Ugandans.
Yet, if government worked on plugging leakages, there would be enough money to run the country. Every financial year, Uganda loses up to $1bn in corruption and wastage. Take an example where the Entebbe Express highway of four lanes cost Ugandan tax payer $500m when the Kenyan government constructed a high way with eight lanes at $270m!
Secondly, Uganda has lost a lot of money in tax exemptions. While exemptions are good in encouraging production like our Ghanaian colleagues have done, in Uganda, tax exemption is another avenue for leakage of the tax payers money.
This is because exemptions are given to a selective group. These camouflage as investors, make money and run away when the grace period for exemption expires or they change the name of the company. In the process, the country has lost a lot of money to these quacks that collude with the government mafias.
Some of the so called investors come without a penny, they are given all the support by the government and just run away as soon as they get what they want. For example, the Chinese who took over lira spinning mill was given $7m as soon as he got it, he ran to China. The proprietor of Yamato factory in Bugolobi took off with $8m and Kanathan went with $20m.
These are leakages that a serious government should work on to avoid hemorrhage rather than running to tax a poor old woman in a village who has received some little money for treatment from a son or daughter.