Non-Governmental Organisations (NGOs) providing free health care and support services have asked the Government to scrap the recently instituted tax on medical equipment and other health logistics entering the country.
Henry Magala, the AIDS HealthCare Foundation country programme director, said it is quite absurd that most of their equipment that is meant to facilitate free health service delivery is being taxed.
"We purchased a vehicle worth $72,000(about sh187m) and were charged an 18% tax, an equivalent of sh33m in taxes," said Magala.
He said this affects their service delivery as they have to spend a lot of money on taxes other than increasing supplies to reach out to many more people.
He noted that because the Government doesn't provide 100% health financing, support organisation need a good environment to operate in.
"We want these exemptions to be expressly provided so that it doesn't have to be based on negotiating power as the case is right now because due to the bureaucracy, paying the tax is rather time saving," Magala noted.
Joshua Wamboga, the team leader and networking advocacy at the AIDS Support Organisation (TASO), said almost every equipment imported by the organisation is taxed and this has had a devastating impact on service delivery.
He said the current supply chain rationalisation policy has not helped much in taxation issues because as per the policy, the NGOs are supposed to purchase direct medical equipment such as drugs through the National Medical Stores who still have to pay Value Added Tax.
"I know of some organisations that have failed to clear taxes and their vehicles are stuck at the border, which has jeopardized their operations," Wamboga noted.
Wamboga further explained that though there is a provision for tax refund depending on the organisation's line ministry, securing acceptance for this condition is not easy to get.
Paul Kyeyune, the Uganda Revenue Authority public and corporate affairs manager, said the law clearly stipulates what should be taxed and what should be exempted, and in this case, it is only medical supplies and medical equipment.
"Sometimes organisations tend to base on one provision and want to use it to cover up for all the rest. In the case of vehicles, you cannot be sure that these are going to be used for health services,"Kyeyune clarified.