Parliament rejects proposal to exempt tax on wheat, old computers

Parliament on Tuesday rejected a proposal by Kampala Central Member of Parliament, Muhammad Nsereko to exempt bread wheat and five-year-old computers from paying Value Added Tax.

This was during a debate in which MPs were considering the Value Added Tax (Amendment) Bill, 2022.

Nsereko argued that bread or its inputs like wheat should be exempted from the tax to enable affordability. 

He argued that instead of exempting hotels and lodges from paying VAT, the exemption should be put on wheat.

Nsereko added that people going to hotels are more capable of paying than people having bread.

However, Dickson Kateshumbwa the Sheema Municipality MP said that his proposal is not possible since it will not automatically result in a reduction in prices.

Nsereko defended his proposal saying that the proposed exemptions should include inputs.

Anita Among, the Speaker of Parliament wondered why Nsereko thought bread was the most important item to benefit from exemption yet the majority of people in rural areas have priorities.

Nsereko’s proposal to also exempt computers and computer accessories five years old was also rejected. 

He argued that this will enable affordability and aid learning.

Among said that parliament should not encourage the importation of older computers because Uganda was not a dumping ground. 

Meanwhile, parliament exempted oxygen cylinders and oxygen for medical use from VAT. 

According to Henry Musasizi, the Minister of State for Finance- General Duties, the Value Added Tax Act currently only exempts cylinders but not oxygen, and the exemption is in a bid to make it affordable.

The Bill also exempted devices used by Persons with Disabilities (PWDs), educational materials, sanitary towels, menstrual cups, tampons, and the inputs for the manufacture of sanitary ware.

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