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Lawmakers approve tax on diapers

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Lawmakers approve tax on diapers

Legislators have passed the Value Added Tax (Amendment) Bill, 2023, which includes a tax on diapers and rejects an exemption for adult diapers.

The Deputy Chairperson of the Committee on Finance, Planning and Economic Development, Hon. Jane Pacutho, argued that the exemption was based on medical reasons.

However, the Minister of State for Finance, Hon. Amos Lugoloobi, stated that the tax on all diapers, including adult diapers, would bring in UGX2.6 billion annually in revenue.

“The committee observed that diapers are not bio-degradable which makes them an environmental hazard. The proposed change in the law aims to clarify that, it is adult diapers that are treated as medical goods but not all diapers,” she said.

Shadow Minister of Finance, Hon. Muwanga Kivumbi presented a minority report stating that all diapers should be exempt from VAT.

“It defeats the logic that only adult diapers are treated as medical goods and not children’s diapers. All diapers should qualify for tax exemption,” said Muwanga Kivumbi.

Hon. Muhammad Nsereko (Indep., Kampala Central) suggested that if a tax is to be applied, it should be applied equally to everyone.

“If we are to tax, let us tax everyone; if we are to exempt, let us exempt everyone,” he said.

The MPs also introduced a tax on non-resident producers of electronic services, including Amazon, Netflix, Facebook, and Google, who offer services to non-taxable persons in Uganda.

Hon. Dicksons Kateshumwa (NRM, Sheema Municipality) raised concerns about how the tax on non-resident producers of electronic services would be enforced since these companies are not physically present in Uganda.

“Who will issue the invoice and who will ultimately bear the burden of this tax?” he asked.

In response, Hon. Amos Lugoloobi, the Minister of State for Finance, explained that as more businesses move online, the government needs to adapt its tax policies to reflect this trend.

“We need to migrate our tax system online to capture revenue from e-commerce transactions and increase our tax-to-Gross Domestic Product ratios from the current 13 percent,” Lugoloobi said.

Sarah K. Biryomumaisho is a seasoned multimedia Award Winning journalist with 11 years of experience in broadcast and writing. She is recognized for her expertise in the field and holds a Diploma in Business Administration from Makerere Business Institute, which has equipped her with a strong foundation in business principles. Sarah's commitment to professional development is evident through her continuous pursuit of knowledge and skills. She has obtained a Certificate in Media Management from Women in News, an esteemed organization dedicated to empowering women in the media industry. In 2020, she successfully completed a Course in Wikimedia, demonstrating her proficiency as one of the few Wikipedia Editors in the country. To further enhance her reporting capabilities, Sarah has also acquired a certificate in Gender Justice Reporting from The International Women's Media Foundation (IWMF). This specialized training has equipped her with a deeper understanding of gender-related issues and their portrayal in the media. Throughout her career, Sarah has contributed her talent to various media houses, including six radio stations, where she has showcased her versatility and adaptability. Her most recent engagements include Galaxy FM 100.2 and Radio 4. Additionally, she has served as a writer for Andariya Magazine, further demonstrating her ability to excel in different mediums. Sarah's expertise extends beyond journalism. She has worked as a Digital Communications consultant for the revitalized Uganda Airlines, leveraging her skills to effectively communicate the airline's message in the digital sphere. Her passion for digital media and technology makes her a valuable asset in the evolving landscape of communication. In her entrepreneurial pursuits, Sarah is the proud owner of TheUgPost, a renowned media organization with a strong presence in Uganda and a global reach. Through this platform, she continues to make a significant impact by providing reliable and engaging content to a wide audience. Sarah won the Top Environmental Journalist Award 2023 from Uganda Biodiversity Fund. Twitter; https://twitter.com/BiryomumaishoB

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