Henry Musasizi, the Minister of State for Finance, has defended the Fuel Tax levy of Shs1550 per litre, saying Uganda’s economy has recovered from the COVID-19 pandemic.

The minister told Parliament’s Finance Committee that this fuel levy was also backed by MPs who in the past recommended to have tax on fuel products increased every two years.

Gov’t is expected to generate additional revenue of Shs200.92Bn from fuel tax.

“You may wish to recall that previously, it was agreed with Parliament that the government would increase Excise duty on fuel products by Shs100 per litre every 2 financial years except during the COVID-19 Pandemic period.

Since the economy has recovered, we think it is time to make the adjustments. In addition, over the last periods, the Uganda Shilling has depreciated and the price of fuel has increased yet tax has remained the same which implies that the proportion of tax on fuel price has been declining.

Therefore, the proposed increase which is equivalent to Shs1.9% average pump price is a modest increase,” said Musasizi.

Dicksons C Kateshumbwa (Sheema Municipality MP) called on the Minister to move away from imposing taxes and rather find measures leading to economic growth by proposing incentives to sectors that have the potential to generate more revenue.