Amidst the Uganda Revenue Authority’s (URA) efforts to broaden its tax base and enhance revenue generation, Speaker Anita Among has put forth a suggestion: impose a tax on cattle.
During a plenary sitting convened to address the grievances of striking city traders, Among criticized URA for focusing solely on taxing formal businesses while neglecting informal sectors.
Drawing from her own experience, Among revealed that she owns over 2,000 cows yet does not pay any taxes on them.
“Are cows taxed? Yes, it’s an informal sector, but if we aim to broaden the tax base, then we should consider taxing cattle. I personally own over 2,000 cows, but I don’t pay any taxes on them. Let’s expand the tax base instead of burdening the traders. Many people own numerous cows,” she asserted.
However, this proposal is likely to stir controversy, particularly because many senior government officials, including President Museveni, possess substantial cattle holdings.
Historically, Museveni has opposed taxing agricultural and animal produce, arguing that Uganda remains a predominantly agrarian society where many livelihoods depend on farming.
The past five days have witnessed traders in Kampala and other towns shutting down their shops in protest against what they perceive as unfair taxes and the implementation of the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS) by URA to collect Value Added Tax (VAT).
Speaker Among’s suggestion to tax cattle presents a potential avenue for expanding the tax base, but it also raises questions and debates about the feasibility and implications of such a measure, particularly within Uganda’s agricultural context.
In 2014 President Museveni, chairing a National Resistance Movement (NRM) Caucus meeting at State House Nakasero, expressed anger over new taxes imposed on agricultural inputs and private schools. During the meeting, attended by NRM members, a decision was made to advocate for the removal of these taxes.
Sources present at the meeting revealed that there was unanimous disapproval of the new taxes, particularly those affecting agriculture. Members of the caucus insisted on the urgent review of these taxes, prompting a call for a Cabinet meeting to discuss the matter as early as Wednesday.
One source, speaking on condition of anonymity, disclosed, “We resolved to highlight the most pressing issue, which is the new taxes, especially those related to agriculture, and present it to the Cabinet for thorough deliberation and, hopefully, their repeal.”
President Museveni expressed surprise and disappointment at the introduction of these taxes, stating that he was unaware of their inclusion in the budget. He emphasized his commitment to fostering rural income growth through agriculture and expressed his frustration at being associated with implementing taxes that contradict this goal.
The controversial taxes, announced by then Finance Minister Maria Kiwanuka during the budget reading on June 12, 2014, aimed to generate revenue by removing tax exemptions on agricultural inputs and introducing an 18% Value Added Tax (VAT) on these items.
The decision to tax agricultural inputs and related equipment sparked varied reactions from both NRM members and opposition politicians. Many vowed to oppose the budget containing these new taxes when it was brought to Parliament for debate.
Farmers were particularly concerned about the increased costs associated with essential agricultural tools and materials, including hoes, pangas, pesticides, seeds, and packaging materials. They feared that these added expenses would negatively impact their livelihoods and agricultural productivity.
