MPs Amend Law To Exempt Their Allowances From Tax

Government is to lose over Shs40b after MPs used their power to amend the law to protect their allowances.

The legislators amended the Income Tax (Amendments) Bill, 2016 last evening to exempt their emoluments from taxes.

The amendment was moved by Rubanda East MP, Henry Musasizi at about 8pm and attempts by State health Minister, Sarah Opendi to question the move by parliament hit a dead end after Kabula MP James Kakooza with the backing of other legislators put her on order.

In what looked like a premeditated move to circumvent the Commercial Court ruling on the MPs allowances, all members in the House, including those in the opposition clapped after passing the bill.

The decision by MPs to exempt themselves from PAYE, is however expected to create a hole in revenue collection of more than Shs40 billion, impeding service delivery in the process.

In February this year, the Commercial Court, ordered the Parliamentary Commission to deduct tax from MPs’ emoluments. The Parliamentary Commission filed an appeal against the judgment on February 22.

However before the appeal is heard, the MPs moved to protect their allowances.

Some MPs complained to the Committee on Legal and Parliamentary Affairs that URA wanted Shs9m from each legislator in 9th Parliament and Shs10m for the MPs in the 10th Parliament.

The decision by MPs is expected to cause uproar in the public at a time when the government is encouraging Ugandans to pay taxes.

The move also comes after the civil society watchdogs and other commentators argued that the MPs emoluments should be taxed in public interest.

Story By Yasin Mugerwa