24 May 2009
editorial
Kampala — The parliamentary committee on trade is currently considering a petition filed by Kampala City Traders Association against the increase of trade license fees.
The association, through the Central Division MP, Erias Lukwago, petitioned Parliament against Kampala City Council's (KCC) move to increase the fees. They are questioning the legality of the increment.
City traders were paying between sh100,000 and sh200,000 annually for the licences, but last year, city authorities increased the fees to between sh360,000 and sh950,000. KCC last reviewed the licence fees 11 years ago.
Appearing before the committee, trade minister Maj. Gen. Kahinda Otafiire, argued that the fees increase was realistic in view of the prevailing economic situation. He argued that people working or running businesses in the city should be prepared to pay taxes if they are to get services from the city authorities.
Otafiire is right on the issue and the traders are not justified to resist the increment. Over the past 11 years, the economic situation has remarkably changed. Prices of most goods and services have more than doubled. The cost of service delivery has equally increased. Under the circumstances, KCC is also justified to review the taxes.
MPs on the trade committee must avoid the temptation of acting in a populist manner. They must consider the issue objectively. One of the serious problems the country is experiencing is the high rate of tax evasion. Companies owned by tycoons have been named among notorious tax defaulters, yet salaried employees are subjected to a big tax burden. Some business tycoons are granted generous and undeserved tax waivers. This is unfair.
Politicians should stop meddling in tax administration. Instead, they should sensitise citizens about paying taxes and then demand accountability in terms of services. All Ugandans should equitably share the tax burden.
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