Members of Parliament have on Tuesday discussed the The Value Added Tax (Amendement) Bill, 2018 which seeks to among other things exempt bibles, hymn books from tax.
URA revealed recently that the current constitution provides for the taxation of religious books, however, a bill was drafted after calls that the material fosters morality, increase spirituality, and that if excepted from tax, will be readily accessible to the general public.
The bill provides for the due date of payment of tax; to include the African Trade Insurance Agency on the list of public international organizations; to provide tax incentives to investors by exempting certain supplies from Value Added Tax.
It also amends the definition of educational materials and to prescribe the rate of interest chargeable as penalty.
During Parliament Plenary, legislators wonder if government entities that have often failed to remit with holding tax will be able to honor the proposed amendments in the value added tax.
The state Minister for Finance, Bahati David however noted that the fact that some individuals and entities in govt have not been remitting withholding tax as required, shouldn’t stop us from passing the VAT (amendment) bill.
“Not everyone pays withholding tax, it is only govt entities and designated companies that we know have a good reputation that withhold tax, let us make a step of improving compliance to tax collection,” he noted.
Further more, Hon Bahati proposed incentives in strategic sectors that can make a difference in people’s lives, “you can’t exempt radios and TV much as i dont underestimate the power of information,” he said
“We can go a head and charge withholding tax on VAT but only on govt and its agencies, banks, insurance companies and probably NGOs,” Hon Niwagira Wilfred remarked.
“According to the Finance committee report, this tax will be withheld from entities that are VAT registered. I would like to propose withholding of 100% instead of 50% proposed by the Finance minister,” Hon. Henry Musasizi, the Chairman Finance Committee said.
Hon. Anywarach Joshua said, “The 50% of VAT is like a withholding security for the tax payer, such that if there is any computation errors by URA, then the remaining 50% can compensate, you know how hard it is to claim money from URA.”
Hon. Musasizi read the recommendations made on the Value Added Tax (Amendment) Bill, 2018, and by press time, Members had agreed to the 3rd reading of the Bill (passed into an act.)
The third reading is an important stage of any Bill. Often the third reading stage is just a formality with little if any debate because the details have been clarified and agreed at the second reading or Committee stages.