Smell of fuel price hike fills air after govt bumps up taxes

Smell of fuel price hike fills air after govt bumps up taxes
Fuel tankers with petroleum products | Courtesy

Tax on petrol is proposed for Shs1,550 per litre, kerosene at Shs500 per litre and diesel at Shs1,230 per litre

A fresh proposal to tax petroleum appears not to be adding anything fresh for consumers as smell of fuel price hike is instead renting the air.

The government has proposed an increase in taxes on petroleum products, among which include petrol, diesel, and kerosene.

The proposal, if approved, will see tax on every litre of petrol increase from Shs1,450 to Shs1,550, while tax on diesel will increase from Shs1,130 to Shs1,230 per litre.

Tax on kerosene will increase to Shs500 per litre from Shs200.

If passed in its current form, fuel prices in Uganda are expected to rise.

The proposal is contained in the Excise Duty Amendment Bill, 2024, one of the tax bills that Minister of State for Finance, Henry Musasizi, presented to Parliament along with the Stamp Duty Amendment Bill, 2024, and the Income Tax Amendment Bill, 2024.

Land deals to taxed

The government is also proposing to impose a 5-percent withholding tax on gains earned from the sale of land in cities and municipalities, sale of rental property and sale of shares of a private company in the Income Tax Amendment Bill 2024.

“The taxpayers are required to remit this money to URA within 15 days after disposal of the assets or pay fines for failure to remit the tax within the stipulated period,’ reads the Bill.

According to reliable sources, there have been previous attempts by the government to impose a withholding tax on land transactions; however, the plan has always been met with resistance by Members of Parliament who argue that the tax would push up land prices beyond the going rate.

The supply and manufacture of electric cars made in Uganda as well as the assembly of electric vehicle charging equipment in Uganda are both suggested to be exempt from taxation by the Ministry of Finance.

A tax exemption on products such as ethanol-using cooking stoves, hoes, fertilisers, pesticides, and seedlings has also been proposed, with a deadline of June 30, 2028.

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