Museveni stands his ground on social media, mobile money tax
Entebbe, Uganda | THE INDEPENDENT | President Yoweri Museveni has responded to feed back to his earlier statement on the newly introduced social media and mobile money taxes. “Museveni stands his ground on social media, mobile money tax”.
Here is his missive in full.
Countrymen and Countrywomen and, especially the Bazukulu.
Countrymen and Countrywomen, and especially the Bazukulu.
Greetings to all of you.
Thank you for responding to my message of 4th July 2018 on the issue of social- media and mobile money taxes. There were many responses. Some, like Brenda Margaret, saying that the ‘pigs’ in Govt are filling their stomachs. Otherwise, people would not mind paying taxes because we all want the country to develop. Others, falsely, claiming that all the ‘massive taxes’ have failed to develop the country. What can 0.5% do? That wrong statement was by Rose. RC@Rhone said that at Sh.200 per day, the tax would bring in Sh.720bn per year yet “all the developments” would still be funded by loans.
Mercy Musinguzi wanted to know why it was the old man with a hat to clarify. Was the tax 1% or 0.5%? Mark Muyobo repeats the point that people would not mind paying the taxes if the tax money was well used. Leonard Lubwama, using luganda, wondered why he should travel to collect money when he can get it on phone. Premaz Kirabo Mayega was for scraping the tax. Tusime Peter wonders what will happen to those who had paid the 1%.
George Mugwanja said tax should be simple and easily collected. Henry Othieno wonders why we do not tax the multinationals. Hackim Niwazy, commends my message but informs me that they are taxing mere deposits. I have been following up all these issues for a long time. Here are my comments on each of the points:
1. Corrupt and unpatriotic pigs in Govt either steal the money or spend it on themselves (ego-centrism). That is certainly true to some extent. However, they steal or misuse the money that is already collected in the form of taxes. They cannot steal or misuse money that is not yet collected. The only pigs that can steal money which is not yet collected in taxes are the officials of URA and the Ministry of Finance who deliberately cover up areas of possible tax collection and share the money with the possible tax payers instead of the money developing our country by having a self- sufficient budget (embalira ya sente eyeggwanga eyemerira). What the broader category of pigs steal or misuse is part of the 14.2% of the tax:GDP ratio that is already collected as Govt revenue. Therefore, while corruption and the ego-centrism of the elite in Govt are problems, the bigger problems are a small GDP in the past and even when the GDP started growing, we still have had the persistent under-collection of taxes as a proportion of GDP. On the issue of expanding the size of the GDP, the NRM has acquitted itself admirably on that front because the average rate of growth of the economy in the last 32 years has been 7% per annum. It is the GDP:tax ratio that has remained low. Since we are developing our country, we need enough money to do so and we must handle all the 3 problems: corruption, selfish use of the money by elements of the elite and the under-collection of taxes compared to the growing size of the GDP. In the previous statement, I gave you the comparative figures. Some countries in Europe go up to 30% of GDP: tax ratio. Our 14.2% is too low even if there was no corruption etc.
2. Ugandans have been massively taxed but where is the development? Come on, friends. Be serious. Only the other day we were at Kololo reminding ourselves that infectious diseases (polio, measles, T.B, small-pox etc), water-borne diseases and vector-borne diseases have greatly declined. Why? It is because of : immunization, more accessing safe water and controlling the vectors (mosquitoes, tse-tse flies, etc). On the contrary, 40% of the deaths are due to non-infectious diseases (the so called non- communicable diseases – heart, kidney, diabetes, cancers, hypertension etc). These are due to eating too much and not doing physical work (collecting firewood, collecting water, cultivating, walk to and from work, etc etc). That is on health. You can go to Education. 2 million children in the Primary Schools in 1986; now 9million. 190,000 students in the Secondary Schools; now 1.8million. 5000 students in the university now 200,000. Electricity – 60mgws in 1986; now 2000 mgws. Telephones- 23,000 in 1986; now 23million. Roads, Roads, Roads: 1000km of potholed tarmac roads; now approaching 6000kms of tarmac plus 1000pieces of brand new Road equipment for the murram roads. Piped water systems up to small Trading centres such as Kasambira in Kamuli; big irrigation schemes like Mubuku and Doho. The brand new ICT backbone that enabled the internet cost to go down fromUSD1200 in 2013 to USD 300 in 2014 to the current USD 70 per Mbps; then the under sea cable in which UTL has shares. Here, I have been talking about Govt projects. How about private units of wealth? How many new permanent buildings in the Kampala- Entebbe- Mukono- Nansana area? Do you have eyes to see? How about the factories? How about the hotels? How about the cars, the buses, the boda bodas etc? How about the Kgs of tea produced, the bags of coffee produced etc per annum? Tea -3million kgs in 1986; now 60milion kgs. Coffee-2million 60kgs bags ; today, 5million 60kgs bags- mainly on account of OWC in the last 3 years. How about the cattle? 3million in1986; now 14 million. How about scientific research in Agriculture, engineering, food science, medicine etc? How many patents do our scientists have? How about the petroleum and gas that was discovered by our Scientists? How about the other minerals? The 200m metric tonnes of iron ore (obutare), the 230million metric tonnes of phosphates, the 300million metric tonnes of Lime for cement, the 3billion metric tonnes of aluminium clays etc. The envy and malice of the enemies cannot diminish the achievements of Uganda and the NRM. Sorry for all the traitors.
3. Since we are collecting more and more taxes, why is everything in the form of development paid for by loans? Not true. The long Olwiyo- Anaka- Koch – Goma – Gulu- Acholibur- Kitgum – Musingo Rd ( 235.1 kms) has been paid for, 100%, by the Uganda Govt. The Sh.440bn Kampala-Masaka Rd was paid, 100%, by Uganda Govt. Kampala- Mityana; Mbarara- Kikagate – Murongo ferry; Ishaka- Kagaamba; Jinja- Kamuli; Mukono- Kayunga – Njeru; Iganga- Kaliro; Musita-Namayingo- Busia; Kampala- Kafu- Karuma- Gulu; Soroti- Katakwi- Moroto; Moroto- Nakapiripirit-Muyembe; Mubende- Kakumiro – Kibaale – Kagadi- Ndaiga; Matugga- Semuto-Kapeeka; Lira- Kamudini; Mityana- Mubende- Fort-Portal; Mbale- Tirinyi- Nakalama; Tororo-Mbale- Soroti; Mukono-Katosi-Nyenga roads; etc etc have all been paid for or are being paid for, 100%, by the Uganda Govt. No loan., No grant. Even the ones paid for by loans such as Fortportal – Kamwenge partially; Ntungamo- Mirama Hills ; Atiak- Nimule etc; in the end, are funded by the Uganda Govt because we pay back those loans. Each year, we spend US$ 821 million paying back those old loans. If we did not pay back the old loans, they would not give us new ones. Therefore, all the projects either directly paid for by the Uganda Govt or through loans are, in reality, all funded by Uganda Govt. The only exceptions are the grants which in this year’s budget only account for Sh. 0.28trillion out of a budget of Ug .Sh. 32trillion. This is not of great significance. Many of the expenditures are paid for by the Govt tax revenue of Ug.Sh. 17.5trillion and the Ug. Sh. 15.3trillion borrowing from outside and from inside (8.3trillion from outside and 7 trillion from inside). Who lends to the Govt from within the country? NSSF, Banks etc through buying treasury bills and bonds of the Govt. Treasury bills of the Govt and bonds are pledges, in the form of documents ,where the Govt undertakes to pay back, without failure, with interest, the money lent to the Govt when the agreed period expires. The problem of funding Govt programmes with loans is that those loans have interest on them. Indeed, each year the Govt pays Ug. Shs 2599bn as interest for the old loans not to mention the paying back of the principal, the amount of the original money that was borrowed. This could construct six (6) Masaka- Kampala roads because, remember, earlier on, I told you that we spent Sh. 440bn on that road. This is why it is important to raise enough Gov’t revenue in taxes to stop wasting our money paying interest instead of undertaking more projects.
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