August 6, 2013

Water Tax To Affect the Rich – Kamuntu

The Ministry of Water and Environment has defended the recent tax that was reinstated on water saying it will not directly hurt the poor as alleged.

This followed a recommendation by the Parliamentary committee on Natural resources chaired by MP Michael Werikhe urging government to drop the proposal  of reintroducing  VAT on water on grounds that it will reduce access to safe water especially to the poor citing women.

Minister for Water and Environment Ephraim Kamuntu
Minister for Water and Environment Ephraim Kamuntu

In the 2013-2014 Financial Year budget proposals that were presented to Parliament by the Minister of Finance Maria Kiwanuka, the Finance Ministry proposed a 18% VAT on water.

Appearing before the committee, the Minister for Water and Environment Ephraim Kamuntu revealed that the tax will only affect those who use water for business, recreation and wastefully such as those involved in washing cars, watering flowers and compounds among others.

He noted that the tax is beneficial since it seeks to redistribute from the wealthy that use more water to generate revenue that government will use to finance extension of water to the urban poor as well as rural areas.

Kamuntu also clarified that that tax is not applicable to point water sources in the rural areas such as springs, boreholes and gravity flow schemes among others, but will only apply to piped water supply systems.

He further revealed that the Ministry of water has embarked on a program of rolling out the supply of rain water tanks to public institutions and training of village level means for construction of the tanks at household level in a bid to enhance rain water harvest.

However committee members have maintained that they will not approve the Ministry budget that amounts to 411.1 billion shillings, if the proposed VAT on water is not dropped.

The committee also recommended that government draws a plan on how the provision of water to various parts of the country is lined up.

MP John Ken Lukyamuzi, the shadow Minister for Water and also a member of the Natural Resources, noted that the tax on water is to increase the problem of water inaccessibility. He said that many areas have in the past months had a problem of water due to climate changes and showed worry that with the introduction of a tax the problem might worsen especially among the rural poor.

Lukyamuzi also revealed that he is reluctant to approve the budget proposal of the Water Ministry saying that he has not yet received a convincing answer from the Finance Ministry.

MP Namayanja Florence also a member of the Committee said that most of the wells in Kampala from which people draw water are contaminated and wondered whether the water tax will improve the lot of the urban poor.

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