Museveni Declines to Assent to Tax Procedures Bill Citing Possible Leakages

President Yoweri Museveni has declined to assent to the recently passed Tax Procedures (Amendment) Bill, 2018 and subsequently returned it to Parliament for reconsideration.

While chairing the House on Tuesday, Deputy Speaker Jacob Oulanyah read out Museveni’s letter returning the Bill to the House for further review.

The objective of the Tax Procedures (Amendment) Bill, 2018 that was passed in May this year is to amend the Tax Procedures Code Act, 2014, Act No. 14 of 2014 to provide for due dates for filing returns under the Lotteries and Gaming Act, 2016.

It sought to provide for the Minister to pay taxes on behalf of a person, to waive all unpaid taxes due and unpaid by government as at 30th June 2018, to provide for electronic receipting and invoicing and to provide for penal tax relating to electronic receipting and invoicing.

According to Oulanyah, the President says that the Bill in its current form will lead to evasion of tax by some persons or organizations.

“In accordance with Article 91(3b) of the Constitution, I hereby return the Tax Procedural Amendment Bill 2018 to Parliament. Section 20(6) should be re-considered and deleted. Incorporating it in the Act will encourage non-compliance by the tax payers as regard to filing the annual tax,” the President said in his letter to Parliament.

“The current tax system that compels taxpayers to pay taxes through self-assessment has been effective. Therefore, the proposed amendment will further deter URA from charging interest on tax arrears hence creating revenue leakages,” Museveni’s letter reads.

Section 20(6) of the Tax Procedures (Amendment) Bill, 2018 states that, “Where a tax payer files returns with the Authority and an assessment is done by the Authority within a year, interest on the monies due from the period of assessment shall accrue from the date on which the assessment was conducted.”

The Tax Procedures (Amendment) Bill, 2018 was read for the first time on the 3 April 2018 and referred to the Committee on Finance, Planning and Economic Development in accordance with Rule 118 of the Rules of Procedure of Parliament.

The Bill will be returned to the House for debate after reconsideration by Parliament’s Committee on Finance.