June 19, 2013

Tax on Kerosene Will Raise Quality and Protect Consumers

 Finance Minister Maria Kiwanuka defending the 2014-2014 budget

Finance Minister Maria Kiwanuka defending the 2014-2014 budget

A few days after reading the National Budget for Financial Year 2013-2014, the Minister of Finance Maria Kiwanuka has defended government’s priorities and taxes in the budget to the media in a question and answer press briefing about the budget.

On the increased levy of 200 shillings on Kerosene, Kiwanuka said that it was in existence until two years ago when she lifted it as one of her first actions in the ministries and the public reactions were strong that it would not have effect and that the price will continue to go upwards and the poor would not benefit.

She noted that surely the prices of Kerosene continued going upwards despite the tax lift and at the same time was used to adulterate diesel with severe consequences to motor vehicles, industrial machinery and human life.

She added that with consultation with oil companies, the ministry was advised that as long as the two prices are different there would be adulteration by unscrupulous people and that is the reason why it was taken as a consultative measure to bring back the excise duty that was in existence two years ago.

Kiwanuka pledged that the ministry of Finance will do a lot in monitoring the monies collected in taxes and praised the Uganda Revenue Authority for performing well in the past years saying that the collections increased by about 17% and that this should grow the country economically on a sustainable inclusive basis.

She attacked the media for labeling her 2013-2014 budget a tax heavy budget saying that the ministry is not increasing the tax base as such and that if the tax proposals in the budget are passed by parliament it will only be 3% of the tax base.

About government priorities in the budget, Kiwanuka said that the budget is a window and time frame of one year within the national development plan and that is why in this budget there are focuses on some issues of National Importance while other priorities have had to wait.

She said that the overall objective of the government is to increase job creation, household income across the country through stimulating growth. She added that for the case of Uganda where there is agricultural potential is to do agricultural productivity, production and through value added exports and diversification of employment since there is only a certain amount of land and not everyone can work on.

She explained that this year the tools being used are infrastructure saying that it is visible citing roads, power stations, irrigation dams, she also said that infrastructure supports the productive sectors and that it is inclusive since it is used by everybody.

Here she attacked particular groups that complain that the budget left them out saying that what about the roads they used to lodge the complaint and electricity used to process the petition.

Kiwanuka noted that this year’s budget is basing more on infrastructures saying that that is the reason why there are delays on roads due to constructions.

About the skilling in the budget in terms of technical skills, she said that the media in this area is important to change the mind set of young people saying that the real opportunities are in agriculture and manufacturing saying that education to the youth is not an end in its self but a tool along the way.

Kiwanuka said that on this particular priority the Ministry of Finance intends to work together with ministries responsible for labour, education, foreign affairs and the Diaspora to come up by this time next year with a strategy for multiplying the employment opportunities across the country.

She explained that government is focusing on these productive sectors because they do not want to redistribute poverty saying that the infrastructural sector in particular has been proven to help the productive sectors to work. She said that government does not earn money, and does not create wealth but it is in this 2013-2014 budget trying to make sure that transfers made from the tax payers to tax recipient are for wealth creation.

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