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Highlights of Tanzania Budget 2014-15

Prepared by Tanna Sreekumar & Co. 1 | P a g e

HIGHLIGHTS OF THE BUDGET 2014 – 2015

Actual Revenue collections from July 2013 to June 2014, expected to be 93 % of the estimated budget for the period.

Poor collection due to dismal performance of revenue sources.

2/3rd of the expenditure still on recurrent expenditure and only 1/3rd on development expenditure

Per Capita Income increased to TZS 1,186,200 in 2013 compared to TZS 1,025,038 in 2012.

Life expectancy improved from 51 years in 2002 to 61 years in 2012.

Forex reserves with BOT as of 31st March 2014 were USD 4,647.5 million sufficient to cover 4.6 months of imports against a target of 4 months.

Inflation down to 6.3 % by April 2014, GDP grew by 7%.

Revenue collection for 2014-15 pegged at 11,114.4 Billion and non-revenue collection 859.8 Billion

Substantial amounts set aside for Energy & Minerals, Railways, Agriculture, Education, Water, Health and Good Governance sectors.

Strict financial discipline in Government spending to be introduced.

Income Tax exemption on gaming income revoked

PAYE rate of 13 % reduced to 12 %.

0.15 % excise duty on money transfers abolished, Financial Institutions and telecommunication companies to pay 10 % on fee and levy collected for money transfers.

Excise duty on liquor up by 10 %, cigarettes to cost more

Motor Cycles to have Tz Registration numbers

Cement excluded from the list of deemed capital goods under TIC

Minimum investment by foreigners to qualify for strategic Investor License increased from USD 20 M to USD 50 M.

Assessed tax on petroleum products to be paid immediately and not within 45 days, the current practice.

VAT Act, Cap 148 repealed and new VAT Act 2014 proposed, with sweeping changes in the Act.

New Tax Administration Act, 2014 proposed to be enacted.



INTRODUCTION

The Minister for Finance Hon. Saada Mkuya Salum introduced the estimates of Government revenue and expenditure for the financial year 2014/2015 in the National Assembly on 12th June 2014. Following are the highlights, which essentially are our interpretation extracted from Hon. Minister’s speech and are given without any obligation or liability on our part

REVIEW OF FISCAL POLICY IMPLEMENTATION FOR 2013-2014

2013-2014 Plan was to

Collect from Domestic and External Sources - TZS 18,249 billion

Spent on Recurring Expenditure - TZS 12,604 billion

Spent on Development Expenditure - TZS 5,645 billion

Revenue Policies 2013-2014 aimed at broadening the tax base and enhancing revenue collection by

Reviewing Tax Laws and reducing Tax Exemptions

Establishing One Stop Center at Dar es Salaam Port for Customs Services

Establishing One Stop Border Service

Reviewing Land and Property Tax Collection System

Anticipated Revenue and other collection

Tax and Non Tax Revenue achieved – 75% up to April and expected up to 93% upto June 2014

Non Tax Revenue achieved – 57% up to April and expected up to 65% upto June 2014

Local Govt. Authorities collection – 66% achieved up to April 2014, the poor performance was due to delay in collecting Business License Fee and carrying out mass property evaluation

Commercial Loans upto 30th April 2014

External Grants and Concessional Loans – 63% , Basket Funds – 74% AND Project funds – 55% of the aimed receipts

Domestic Commercial Loans – Financing development projects– 125% of the aimed receipts



Rollover of Discharge of Treasury Bills and Bonds – 157% of the aimed receipts

External Non Concessional Loans – 22.47% of the aimed receipts

Expenditure Policy was to

Align expected revenues with expenditure

Controlling Budget Deficit (including Grants) not to exceed 5% of GDP

Allocate adequate funds for the priority projects

To comply with Public Finance Act and the Public Procurement Act

Expenditure Performance up to April 2014

Total Exchequer – 71% of the annual estimates, Salaries to Government Employees – 79% of the annual estimates, Servicing Public Debit and Other Debts – 87.8% of the annual estimates, Expenditure on Ministries’ Other Charges – 69% of the annual estimates, Development Projects – 55% of the estimates, Local Funds – 52% of the estimates, Foreign Funds – 58% of the annual estimates

Government continued to implement the Five Year Strategic Plan which aimed at

Ensuring Consolidated Financial Statements are prepared in accordance with International Public Sector Accounting Standards (IPSAS) Accrual Basis

Integrating the accounts of Central, Local Governments, Social Security Funds, Public Institutions and Public Enterprises.

Consolidated Financial Statements for the year ended 30th June 2013 were for the first time prepared in accordance with International Public Sector Accounting Standards (IPSAS) Accrual Basis and submitted to CAG. The Purpose was to - Improve Government transparency, Accountability in Utilization and Management of Public Resources

Tanzania Inter Bank Settlement System

Implemented in 20 regions of Mainland Tanzania

Expected to be implemented in all remaining regions by end of June 2014

Internal Audit of Public Funds - Highlights

Started in July 2013



Guidelines for Audit Committee prepared

Verification of Contractors, Suppliers Claim before effecting payment – resulted in

savings of TZS 58 billion

Financial Sector

The Government launched the National Financial Inclusion Framework in December 2013 with the aim of more people accessing formal financial services.

57.4% of the population has access to formal financial services vide 2013 survey.

Banking Service Agent guidelines prepared which enabled the Bank of Tanzania to issue licenses to CRDB, Postal Bank, Equity Bank and DCB as service agents.

Public-Private Partnership (PPP)

Bill to amend the PPP Act No. 18 of 2010 submitted to Parliament, private sector participations and fast track implementation of PPP projects expected.

National Debt

The national debt stock (Public debt & Private external debt) stood at Tzs 30,563 billion as at March 2014 compared to 23,674 billion as at March 2013.

National Debt is sustainable as per Debt Sustainability analysis.

Ratio of Present Value of external Debt to GDP, ratio of Present Value of external debt to domestic revenue, ratio of Present Value of external debt to export - 24.8%, 121.2% and 3.34% respectively, all within the acceptable levels of Debt Sustainability Analysis.

MDAs receiving subsidies from the Government will not receive Government Guarantees.

The Big Results Now (BRN) Initiative

In 2013/14 the Big Results Now (BRN) initiative introduced as a tool to guide and speed up the implementation, monitoring and evaluation of key strategic projects.



During the current fiscal year, a total of Tzs 1,700 billion was allocated to the NKRA (National Key Results Areas) Ministries for implementing projects under the BRN initiatives.

By April, 2014 BRN Ministries received Tzs 1,566.7 Billion which is equivalent to 92% of the budgeted resources for the 2013/14 financial year. Funds were disbursed to the NKRA Ministries as Rural Water Tzs 226.1 Billion, Education Tzs 48.4 Billion, Energy Tzs 577.5 Billion, Transport including road & rail infrastructures Tzs 663.6 billion and Agriculture Tzs 51.1 Billion.

Economic Indicators

GDP grew by 7 % as per target against 6.9 % in 2012 and 6.4 % in 2011.

Tanzania ranks 8th in economic growth in Sub Saharan Africa and ranks first among East African countries as per international Monetary Fund (IMF).

630,616 new jobs were created up to April 2014 in public and private sector excluding health & education sector.

Inflation rate declined from 9.4 % in April 2013 to 6.3 % in April 2014 due to strong macroeconomic policies, good climatic conditions, subsidies, availability of electricity, etc.

Targeted inflation rate to end of June 2014 is 6%.

Foreign exchange reserves increased to USD 4,647.5 million in April 2014 from USD 4,380.3 million in April 2013.

Reserve as at April 2014 is sufficient for importation of goods and services for 4.6 months as against target of 4 months of imports by end of June 2013.

Basis and Objectives

Macroeconomic objectives and targets are to continue growing at an annual average rate of 7.7 % and maintain the inflation rate between 5-6 % during the year.

Revenue Policy

Aim to collect tax and non-tax revenue amounting to 11,974.2 Billion Tzs or equivalent to 18.9 % of GDP. (Tax revenue – 11,114.4 Billion Tzs. and non-tax revenue - 859.8 Billion Tzs.)

Local government authority’s estimated target is 458.5 Billion Tzs.



Grant & Loans

The government expects to receive grants and loans amounting to 2,941 Billion Tzs.

Borrowings

Plan to borrow 2,955.2 Billion Tzs from domestic market for country’s infrastructure development (689.56 Billion Tzs for Development projects and 2,265.67 Billion Tzs. for Rolling over maturing treasury bills and bonds)

Intend to Borrow 1,320 Bn Tzs. (800 Million USD) from external markets on non-concessional terms to finance strategic development projects.

REVIEW AND IMPLEMENTATION OF THE BUDGET FOR 2014-2015.

Budget aims to

o reduce cost of living,

o reduce inflation rate,

o creation of employment opportunities and

o improve social service and infrastructure.

New Value Added Tax Bill and Bill of Tax administration tabled for deliberation and approval with an objective to minimise of VAT exemptions.

Government undertakes two important measures;

o Publishing of quarterly exemption report at Ministry of Finance website,

o Submitting of annual comprehensive exemption report in parliament.



REFORMS OF THE TAX STRUCTURE, FEES, LEVIES AND OTHER REVENUE

MEASURES

Amendments in various Acts

The following amendments have been proposed in the various Acts as under:-

A. Income Tax Act, CAP 332

a) To exempt from taxes all incomes and gains to the holder of the bonds, issued by

African Development Bank in Tanzania Domestic Capital Market.

b) To impose 15% final withholding tax on Board of Directors’ Fees

c) To remove Corporate Tax Exemption to companies on income derived from gaming.

d) To remove exemption of withholding tax on Rental Charges on Aircraft Lease, paid to a non resident, by a person engaged in Air Transportation business.

e) To remove the powers of Minister for Finance to grant exemption for projects relating to expansion and rehabilitation undertaken by investors. Currently this exemption is granted to investors owning TIC certificates.

f) To reduce PAYE rates from 13% to 12% for the first slab ( Tzs 170,000 to 360,000), meaning thereby PAYE will be reduced by Tzs 1,900 per month for employees with taxable salaries of Tzs 360,000 or more.

g) To increase presumptive tax rate from current 2% to 4% for annual turnover between Tzs 4 Million and Tzs 7.5 Million for record keeping business and increase tha flat rate from current Tzs 100,000 to Tzs 200,000 for non record keeping businesses.

The above amendments are expected to increase the Revenue by Tzs 31,504 Million.

B. Excise (Management & Tariff) Act, CAP, 147.

a) To remove the excise duty of 0.15% on money transfer through Banks and

Telecommunication, but to introduce an Excise Duty of 10% to be paid by Banks and Telecommunication companies and various agencies for the fees and levy collected by them on money transfer services.

b) To remove the powers of Minister for Finance to grant exemption on excise duty on petroleum products except the exemption granted through agreements signed between the Government and development partners to finance development projects such as roads and water supply infrastructures.



c) To change the threshold on the age of non-utility motor vehicles that are currently being charged an excise duty of 25% from the current 10 years to 8 years.

d) To continue to impose an excise duty of 5% on non-passenger utility motor vehicles but adjust the limit from 10 years to 8 years. The age limit is also proposed to be reduced from 10 years to 8 years for passenger carrying vehicles that are currently being charged 5%.

e) To impose excise duty rate of 15% on imported furniture under HS code 94.01, in order to promote the local production of furniture using locally available timber.

f) To adjust by 10% the specific rate of excise duty on non-petroleum products, which includes soft drinks, alcohol, spirits etc. to charge 25% excise duty on cigarettes, which will affect as under:-

ITEM Current Rate (Tzs)

Proposed Rate (Tzs)

Increase by (Tzs)

Soft Drinks 91 per Litre 100 Per Litre 9 Per Litre Locally produced Fruit Juice 9 per Litre 10 Per Litre 1 Per Litre Imported Fruit Juice 110 per Litre 121 Per Litre 11 Per Litre Beers made from local un-malted cereals

341 per Litre 375 Per Litre 34 Per Litre

Other Beers 578 per Litre 635 Per Litre 57 Per Litre Wine produced with domestic grapes contents exceeding 75%

160 per Litre 176 Per Litre 16 Per Litre

Wine produced with more than 25% imported grapes

1,775 per Litre 1,953 Per Litre 178 Per Litre

Spirits 2,631 per Litre 2,894 Per Litre 263 Per Litre

g) To amend the excise duty rates on cigarettes as under:- TYPE of Cigarette Current

Rate (Tzs) Proposed Rate (Tzs)

Increase by (Tzs)

Without filter tip and containing domestic tobacco more than 75%

9,031 per thousand

11,289 per thousand

2,258 Per Thousand

With filter tip and containing tobacco more than 75%

21,351 per thousand

26,689 per thousand

5,338 Per Thousand

Other cigarettes 38,628 per thousand

48,285 per thousand

9,657 per thousand

Cut rag or cut filler 19,510 per Kg

24,388 per Kg 4,878 per Kg

Cigar 30% 30% No Change The above amendments are expected to increase the Revenue by Tzs 124,292 Million.



C. Road and Fuel Tolls Act, CAP 220

To remove powers of the Minister for Finance to grant fuel exemption except the exemption granted through agreements signed between the Government and development partners to finance development projects such as roads and water supply infrastructures.

D. The Motor Vehicle Registration and Transfer Tax Act, CAP 124

To differentiate the registration system of Motor Cycles from Motor Vehicles by changing the prefix from T to TZ.

E. The Export levy Act, CAP 196

To reduce the export levy on raw hides and skins from 90% or Tzs 900 Per Kg to 60 % or Tzs 600 Per Kg, whichever is higher The above amendments is expected to increase the Revenue by Tzs 5,778.7 Million as it is expected that reducing will result into reducing the illegal exportation of raw hides and skins.

F. The Tanzania Investment Act, CAP 38

a) To remove Cement from the list of deemed capital goods which enjoys tax

exemptions under the TIC.

b) To remove all tax exemptions on investments granted to telecommunication operators under the TIC for deemed capital goods such as telecommunication towers and their accessories, generators, tower fences, vehicles, base station accessories, earthing, surge and lightning protection system etc.

c) To introduce a new definition for strategic investor by changing the lower threshold capital for foreign investors from USD 20 Million to USD 50 Million. However for Tanzanian Citizen the lower threshold remains same as USD 20 Million.

The above amendments are expected to increase the Revenue by Tzs 43,703.4 Million

G. The Vocational Education and Training Act, CAP 82

The Exemption from levy which was retained in 2013 Finance Act for Government Departments, Parastatal organizations and institutions that receive 100% subventions from the government, will be extended to the following organizations:-

- The diplomatic missions

- The United Nations and its organizations, international and other foreign

institutions dealing with technical assistance but which do not undertake any business activities



- Religious institutions whose employees are solely employed to administer places

of worship, to give instructions or administer religious activities only

- Charitable organizations which do not perform any business activities

- Local Government Authorities, and

- Education and training institutions that offer free services. However this does not apply for institutions that provide business oriented services.

H. The Business Licensing Act, No 25 of 1972

To make amendment to the Business Licensing Act, No 25 of 1972 to enable the government impose the Business Licensing Fee proposed by the Ministry of industries and trade.

I. The East African Community Customs Management Act, 2004

The following changes have been proposed

ITEM HS Code Current

rate Proposed

rate Buses for transportation of more than 25 persons (for the period of 1 year)

8702.10.99 25 Percent 10 Percent

Whet Grain (for the period of 1 year) 1001.90.10 & 1001.99.90

35 Percent 10 Percent

LABSA used by shop manufacturers (for the period of 1 year)

3402.11.00, 3402.12.00 & 3402.19.00


Chemical based (petroleum) aerosol spray

3808.91.39 10 Percent 25 Percent

Papers 4805.11.00, 4805,12.00 & 4805.30.00


Other amendments in the EAC Customs Management Act, 2004:-

a) To grant import duty exemption on Electronic Fiscal Devices for a period of 1 year.

b) To amend the 5th Schedule of the EAC-CMA 2004 o to remove exemption of import duty granted on splints used in the

manufacturing of matches. o to provide import duty exemption on inputs used for manufacturing of Gas

Cylinders o to provide import duty exemption on machinery spares and inputs used for

the development and generation of wind and solar energy.



c) To continue to grant exemption of import duty to Armed Forces Canteen

Organization for a period of one year. The above amendments are expected to decrease the Revenue by Tzs 1,456.1 Million

J. Amendment of various East African Community Customs Management Act, 2004

To amend the rates of fees and various levies charged by Ministries, Regions and Independent Departments in order to rationalize with the current level of economic growth. (No rates indicated)

K. Administration of taxes on imported petroleum products

The current procedure used in the taxation of petroleum products which require that tax assessment is done and payment is effected within 45 days. The new proposal is that payment of taxes be effected immediately after assessment, in line with the other East African countries.



The Value Added Tax Act 2014,

It is proposed to repeal The Value Added Tax Act, CAP 148 and enact the new Value Added Tax Act 2014. The highlights of the proposed Act are as follows:-

a. VAT rate to remain at 18 %

b. A registered person can apply to the Commissioner General for approval to defer

payment of VAT on imported capital goods provided:

i. The person is carrying on an economic activity

ii. The person makes taxable supply

iii. The person keeps proper records and files VAT returns

iv. The person has provided a bank guarantee.

c. Gross profit from gaming business to be Vatable, however no tax invoice to be issued for gaming supply.

d. Benefit in kind to employees to be Vatable at fair market value.

e. Creditors (mainly Financial Institutions) selling properties/assets to recover their debt to operate VAT on the sale consideration.

f. All persons supplying professional services in Mainland Tanzania to be VAT registered irrespective of their turnover.

g. The net VAT payable (Output minus input) shall be adjusted for “increasing adjustment” and “decreasing adjustments” to arrive at the VAT payable for each month.

h. Reverse VAT on imported Services has to be operated in two months, the output in the same month and the input in the immediately following month.

i. Input VAT can be claimed within a period of 6 months from the date of tax invoice.

j. There will be only one method of VAT apportionment for partially exempt traders and the formula to be used is:

Total input VAT (I) * value of all Vatable supplies (T) / value of all supplies (A)



k. If T / A is greater than 0.90, the taxable person shall be allowed credit for the full input tax paid and if it is less than 0.10 the taxable person shall not be allowed any credit for input tax paid. If it is between 0.90 and 0.10, the apportionment shall come into force.

l. First Schedule, dealing with zero rated supplies abolished, meaning only goods and services exported to enjoy zero rating.

m. Exempt supplies, in most cases linked to HS code. Agricultural implements, agricultural inputs, fisheries implements, bee-keeping implements, medicines or pharmaceutical products , medical equipment, articles designed for people with special needs, health care items Petroleum products to be exempted, provided it comes within the HS Code mentioned against each item.

n. In addition, the following items shall be exempt

i. Education: provided the institution is approved by the responsible Minister.

ii. Financial Services, except the specific fee charged for the services.

iii. Sale of land, and all residential buildings which are more than 2 years old.

iv. Lease of residential buildings

v. Supply made in the course of a non-commercial activity carried on by a non-profit organisation.

vi. Supply of water other than bottled, canned or similarly preserved water.

vii. Transportation of person, other than air-charters, taxi cabs, rental cars, boats and boat charters.

o. Schedule 3, under the previous Act, dealing in special reliefs abolished.

Highlights of Kenyan Budget 2014-2015


Economy growth forecasted by 5.8 percent and 6.4 percent in 2014 and 2015, respectively translating to a growth of 6.1 percent for the fiscal year 2014/15, up from 5.3 percent in fiscal year 2013/14;

Total expenditures of KSh 1,581.0 billion (exclusive of domestic redemptions),

and total expected revenues of KSh 1,238.6 billion (including and grants). Overall budget deficit (including grants) in 2014/15 projected to be about KSh 342.4 billion;

GDP growth rate is 18.7 % in 2014/15 against 20.4 % in FY 2013/14;

Gross ministerial development expenditures, including net lending for 2014/15 estimated at KSh 481.9 billion comprising KSh 289.2 billion to be funded from domestic resources and KSh 187.2 billion funded from project loans and grants from external sources and KSh 2.1 billion of net lending;

Revenue collection projected to increase by 15.5 percent to KSh1,180.8 billion, equivalent to 25.5 percent of GDP. Revenue collection effort to be strengthened by bringing into the tax net all potential taxpayers;

Increase in duty rates on a wide range of iron and steel products, which are available locally, from 0% and 10% to 10% and 25%, respectively in order to cushion our local industries from cheap imports;

Current withholding tax to be replaced with income tax on assignment of rights,

(farmouts) based on net gain in line with international practice;

Tax Procedures Bill to be introduced across three tax legislations – Value Added Tax, Excise Duty and Income Tax. The Bill is aimed at making tax administration easier, while at the same time, reducing the cost of compliance;

Import duty on machinery, spares and inputs for direct and exclusive use in the development and generation of Solar and Wind energy removed;

Requirement for customs bonds by the importers of refined industrial sugar and wheat to be stopped with immediate effect;

All imported inputs used in the processing and preservation of seeds for planting are exempted;

Period for remittance of contributions from 30 to 10 days and preparation of fund

accounts from six to three months in line with the provisions under the RBA Act proposed;

All Government procurement to be done electronically to rationalize expenditures

and assure efficiency and value for money;

Highlights of Kenyan Budget 2014-2015


Competition Act proposed to be amended to create predictability and

transparency in its enforcement.

Policyholders Compensation Funds to operate separate funds for long term and for general business. New Insurance Bill will be tabled in the National Assembly shortly;

NSSF act proposed to be amended to exempt civil servants from the new

requirement to contribute to the Fund; Definition of Permanent establishment for tax purposes to be enhanced to ensure

that transactions between related parties and their local establishment are transacted at an arm’s length.

Deduction of expenditure paid by the employers on vacation trips made within Kenya for a period of 12 months to be allowed;

Allocation of Ksh. 66.2 billion for policing services, Ksh 71.3 billion for Kenya Defence Forces and Ksh 17.4 for the National Security Intelligence;

Implementation of Digital Government Payment Gateway to efficiently link Government payments and service delivery;

Ksh 43.6 billion allocated for further expansion of energy production and lower

energy prices for industries and households;

Model farm covering 10,000 acres rolled out, as part of the one million acre Irrigation Agriculture and Food Security Project at Galana Ranch.;

Burden of affected private sector for VAT refund recognized. Government intends to develop a long lasting solution within the next few months.

Highlights of Uganda Budget 2014‐15


Economy continued to grow through Financial Year 2013/14 albeit more modestly than the 6.2% that was projected year ago;

Net URA revenues for FY2013/14 were projected at Shs. 8,578 billion, but collections

are estimated at Shs. 8,104 billion. URA revenue collection increased by 13.4% in comparison to last financial year;

GDP growth projected at 6.1 per cent;

Annual core inflation declined to 3.3% as of end-May 2014;

Value of exports of goods and services projected to be US$ 5.4 billion;

Total expenditure projected to amount to 19.7 percent of GDP, compared to 18.8 percent

in the previous financial year; Uganda ranks among the top 10 recipients of foreign direct investment (FDI) in sub-

Saharan Africa;

Uganda Investment Authority and the Uganda Registration Services Bureau will to be transformed into one-stop centers to efficiently facilitate investors and quicken business registration. Company Registration online to be launched to speed-up registration;

Limits on cash withdrawals enforced to a maximum of Ushs 20 million per day to reduce the amount of public funds exposed to abuse;

Initial Allowance of 50% or 75% on all eligible property placed into service for the first time in a business revoked;

Presumptive tax threshold increased from 1% to 3% to raise revenue; Imposition of 15% tax on Sports and Pool Betting winnings and Designation of Gambling

Houses to withhold the tax;

Introduce capital gains tax on the sale of commercial property to raise revenue; Termination of exemption on Interest Income on Agricultural Loans;

Limit deductions for interest paid to non-associated persons not to exceed 50 percent of

earnings before interest and depreciation;

Exemption on income derived by a person from managing or running an educational institution for commercial gain to be terminated;

Total resource inflows are projected to amount to Shs 15,054 billion. Domestic sources will

contribute Shs 12,321 billion representing 81.8% of the total budget resource for the year;



Oil Refinery to be developed as a Public-Private Partnership (PPP) with the selected Lead

Investor holding a 60% shareholding; and Government and participating East African Community partners states holding upto 40% of the Oil Refinery shares;

Allocation of ted Shs 1,675.7 billion to the Energy and Minerals Sector to undertake mineral development;

Government spending on Health, Education and Water sectors in the forthcoming year will

amount to over Shs 3,550 billon, which is approximately 25% of the total budget; Budgeting and payment of Gratuity to be decentralized from the Ministry of Public Service to

the individual institutions where the Public Officers retire from w.e.f 1st July 2014;

Allocation of Shs 450 billion to enhance the salary of all Public Servants. Excise Duty

Reinstate excise duty on kerosene at 200 shillings per litre to raise revenue;

Increase of Excise Duty of 50 shilling on Petrol and Diesel;

Increase Excise Duty on Sugar from 25 shillings to 50 shillings;

Introduction of 10% Excise Duty on Mobile Money Withdraw Fees;

propose to introduce excise duty of 10 percent on bank charges and money transfer fees to generate revenue.

Value Added Tax

The following amendments have been proposed to the VAT Act:

The under listed Exempt Supplies will become taxable supplies i.e. VAT chargeable at 18% - Supply of New Computers, Desktop Printers, Computer Parts & Accessories and Computer

Software Licenses;

Supply of hotel accommodation in tourist lodges and hotels outside Kampala District;

Supply of Liquefied Petroleum Gas;

Supply of Feeds for Poultry and Livestock;



Supply of Agriculture and Diary Machinery;

Supply of Packaging Materials to the Diary and Milling Industries;

Supply of Salt;

Supply of Insurance Services except medical and life;

Supply of Specialized Vehicles, Plant and Machinery, services and civil works related to roads and bridges construction, Agriculture, Water, Education and Health.

The under listed Zero-rated supplies will become taxable supplies and attract VAT at 18%

Supply of Printing Services for Educational Materials; Supply of cereals, grown, milled or produced in Uganda; Supply of processed milk and milk products; Supply of Machinery and Tools for Agriculture; Supply of Seeds, Fertilizers, Pesticides and Hoes.

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