Uganda's Tax Reforms Spark Debate on Gender Equity and Economic Impact

Uganda’s government is aiming to raise an additional Shs4.8 trillion through tax reforms in the upcoming financial year, but the proposed changes are reigniting a national conversation about who will bear the brunt of these new fiscal measures.

While the government champions these reforms as crucial for boosting domestic revenue, gender rights organizations are raising concerns. A report by the Forum for Women in Democracy (Fowade) suggests that some of the tax amendments, particularly a continued reliance on indirect taxation, could disproportionately affect women.

Indirect taxes, such as proposed fuel levies, are expected to increase the cost of daily economic activities. This is a significant issue for women, who constitute a large part of Uganda’s informal economy. Many women are involved in small-scale trading, rely on public transport, and use mobile money services, all of which could become more expensive with rising fuel costs.

The report highlights that increased fuel prices will likely inflate transport costs for market vendors and impact women’s access to essential services like healthcare and education. Furthermore, the burden of unpaid care work, predominantly shouldered by women, could become heavier as fuel and commodity prices rise, without corresponding support for services like affordable childcare or improved water infrastructure.

Fowade also points to tax incentives for large corporations, arguing that these reduce potential government revenue that could fund vital public services. The extension of tax holidays for entities like Bujagali Power is cited as an example where funds might be better allocated to healthcare, education, or social protection.

However, not all reforms have drawn criticism. An increase in the Pay As You Earn (PAYE) threshold and a higher Value Added Tax (VAT) registration threshold have been welcomed. These changes are expected to leave more disposable income for lower-income earners and reduce compliance burdens for small businesses.

Despite these positive adjustments, broader questions about gender-responsive budgeting and public service delivery persist. Advocates emphasize that the effectiveness of any budget hinges on the quality and accessibility of public services, an area where persistent shortcomings remain.

Issues such as the lack of dedicated funding for sanitary pads for schoolgirls, which affects educational outcomes, and unresolved pay disparities among teachers, continue to be highlighted by civil society leaders.

This discussion on tax reforms underscores the intricate relationship between fiscal policy, gender equality, and equitable economic development in Uganda.

Source: Daily Monitor (Uganda)