Government asked to lower VAT on Yaka by 50%

The Gateway Research Centre, a non-profit organisation has called for the Value Added Tax on electricity to be reduced to lower the cost of doing business.

The organization led by Susanie Nannozi Ggoobi, noted that the Parliament and cabinet should discuss with the Electricity Regulatory Authority (ERA) to lower the monthly Yaka service by 50 per cent from Shs3,360 to Shs1,680.

While appearing before the Committee on Finance chaired by Keefa Kiwanuka this week, the team asked Parliament to review the electricity and water tariffs saying it is greatly affecting the growth of businesses.

Geoffrey Lukyamuzi, a policy analyst at the organisation said that the costs of servicing and electricity units are very high and crippling businesses.

"The Parliament of Uganda and cabinet should dialogue with Uganda Revenue Authority, Electricity Regulatory Authority and the Ministry of Finance to lower VAT on electricity from 18 per cent to at most 10 per cent in order to lower the cost of living,” he said.

He called on the MPs to urge Umeme, the energy distributor, to increase the quantity of the first monthly domestic electricity units chargeable and reduce the current average electricity connection charges for both domestic and commercial consumers.

The team said that if such charges are revised, there will be a reduction in illegal power connections, power theft, increased new connections and high revenues.

They called for revision of the water and sewerage charges, adding that monthly water charges should be lowered and that when meters are not in use, Ugandans should not be charged.

Research Gate Centre has also called for the reduction of internet tax of 12 per cent which has led to citizens purchasing low data volumes at high costs.

The MPs who received the petition said that although the concerns raised by the organisation were key, they needed to make it evidence-based and not simply a narration.

Kiwanuka tasked the team to provide adequate information in regards to their concerns.

"You talk about public dissatisfaction, which is a sweeping statement, you can give us some evidence relating to this. You mention 12 per cent internet data tax and that it has crippled social economic wellbeing of citizens, but you have not shown the effects on statistical terms," he said.