The minister of State for Finance in charge of General duties has announced government plans to increase tax on fuel with effect from July 2024/25. This communication was made as the Ministry of Finance officials and Uganda Revenue Authority appeared before the Parliamentary Committee on the National Economy.
Henry Musasizi, Minister of State for Finance, has defended the Fuel Tax levy of Shs1550 per litre, saying Uganda’s economy has recovered from the COVID-19 pandemic & this fuel levy was also backed by MPs who in the past recommended to have tax on fuel products increased every 2 years.
The government is expected to generate additional revenue of Shs200.92Bn from fuel tax.
“You may wish to recall that previously, it was agreed with Parliament that Government would increase Excise duty on fuel products by Shs100 per litre every 2 financial years except the COVID-19 Pandemic period. Since the economy has recovered, we think it is time to make the adjustments. In addition, over the last periods, the Uganda Shilling has depreciated and the price of fuel has increased yet tax has remained the same which implies that the proportion of tax on fuel price has been declining. Therefore, the proposed increase which is equivalent to Shs1.9% average pump price is a modest increase,” said Musasizi.
However some legislators argue that increasing tax on fuel will cause more problems to the economy. The move comes at a time when traders in Kikuubo are having a strike over taxes in regards to EFRIS a system that has been employed by URA for traders to file their returns!
