The Ministry of Finance, Planning and Economic Development is yet to agree to waive taxes on cars that the Health Ministry procured for the fight against COVID-19, leaving many confused as to why a fight between sister institutions should delay service delivery.
The ministry procured 283 pickup trucks using the money that individual and corporate Ugandans donated to the government which had appealed for help on the onset of the pandemic last year.
So far, 121 vehicles are held by the Uganda Revenue Authority in Custom-Bonded Warehouses, until they are cleared. The trucks are supposed to be distributed to local governments, to improve surveillance on COVID-19 and other future pandemics.
The Minister of Health, Dr Jane Ruth Aceng says the ministry has no money to pay the required 9 billion Shillings, while the Finance Ministry insists that it must be paid. To some Ugandans, it comes as a surprise that ministries, departments and agencies actually pay taxes to the government, through Uganda Revenue Authority.
Ian Rumanyika, the URA Acting Assistant Commissioner for Public and Corporate Affairs says that the government pays import duty, Value Added Tax-VAT and Pay-as-You-Earn-PAYE like any other Taxpayer, except where it is explicitly exempted like the case is for income tax. He adds that the government is also exempt from Stamp Duty by the Stamp Duty Act.
Although Ambulances cost about a third, the cost of other cars before they are cleared, the Uganda Revenue Authority says that the government vehicles under contention are being imported as ordinary cars and not ambulances. The tax-free registration of such vehicles can only be done when the Minister of Finance receives and accepts their application.
“The Health ministry always gets exemptions from such consignments, the procedure is to apply for the same through the Ministry of Finance,” Rumanyika says.
But the Ministry of Finance argues that donations are supposed to be taxed, according to the laws, and therefore the ministry of health must pay. The two ministries have also failed to agree on whether to define the procurement as a donation or not, with health minister Aceng arguing that these were not physical items donated, but purchased by the ministry using donated money.
In a meeting with the Ministry of Health officials last week, parliament’s COVID-19 taskforce committee chairperson Abdu Katuntu condemned the Finance Ministry’s view, saying that since the money was not provided for in the health budget, it should either clear the cars or find the money for the health ministry.
The URA recently listed types of medical equipment that is tax-exempt, as a way of encouraging their importation to tame their scarcity and high cost, especially during the pandemic period. They include heating, ventilating and air conditioning equipment for pharmaceutical manufacturers, which are exempted from all taxes. Others are face masks, face shields, sanitisers, aprons or coverall suits, Medical boots, Infra-red thermometers, Motorized fumigation pump, Oxygen cylinders, Body bags, Biohazard bags, Medical plastic or rubber gloves.
These were described as “enablers in the war against COVID-19.” Inputs to manufacture these essential medical products and supplies for treatment and management of epidemics like COVID-19 are granted duty remission to 0 per cent for one year, under the same law. These provisions refer to both public and private importers, with the aim being the promotion of the health sector and specifically in the fight against the pandemic.