30 July - 5 August 2012 - orsam

Ugandan Parliament Members Vow to Block Reinstatement of Water Tax
KAMPALA, Uganda — An influential committee in Uganda‘s parliament last week rejected a move
by Finance Minister Maria Kiwanuka to reinstate an 18 percent tax on piped water to raise additional
funds in the 2012-2013 national budget.
The MPs, who are members of the parliamentary committee on finance, also opposed another
proposal by Kiwanuka to increase taxes by 18 percent on mobile toilets through the Uganda Revenue
Authority.
The lawmakers, led by Kamwenge MP Frank Tumwebaze, told the revenue authority to find an
alternative means of raising additional funding to close the deficit in this year‘s budget, estimated at
4.1 percent of gross domestic product, instead of ―taxing water and toilets.‖
The tax, which was scrapped in 2011, could generate an additional $9 million USD to support
Uganda‘s $4.6 billion USD national budget. The water sector has been allocated $142 million USD,
up from $109 million USD last year.
Kiwanuka had opposed waiving the tax on piped water, on the grounds that it would lead to a loss of
revenue for the government.
"If the supply of water is zero-rated, the government is foregoing ($5.6 million USD) a year in terms
of revenue," she was quoted saying.
But the MPs warned that reinstating the tax could lead to water shortages and disease outbreaks.
Piped water would become unaffordable for poor people throughout the country, they said.
Estimates from Uganda‘s National Water and Sewerage Corporation show that on average, a 20-liter
jerrican of water costs between $0.06 USD and $0.08 USD.
The parliamentary committee has instead proposed taxing commercial water consumers including
hotels.
Page 75