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The "True Love" yesterday took to social media to warn the government of the likely destruction of business with its every rising appetite for taxes.
Lyto Boss's message on social media aligns with the concerns expressed by trade associations representing various sectors in Uganda.
These associations have petitioned the government to reconsider some aspects of the new tax legislation.
“Raising taxes in Uganda might seem like a quick fix, but it's actually making matters worse,” Lyto Boss posted.
“As taxes go up, businesses struggle or shut down altogether, leading to lower tax revenues. It becomes a vicious cycle: more taxes lead to fewer businesses, which means even less tax income. When will they realize that continually hiking taxes only drives more people away from businesses?”
The musician's message comes amidst anxieties within the business community regarding the potential negative impacts of the new tax measures on businesses and customers. T
he Kampala City Traders Association (KACITA), led by chairman Dr. Musoke Thadeus Nagenda, recently presented a petition to Parliament, urging a reevaluation of the government's stance on the tax bills.
The specific legislation causing concern is the proposed Income Tax (Amendment) Bill, 2024.
This bill proposes a new tax on the disposal of non-business assets, with a particular focus on land and shares of private companies. The government seeks to impose a 5% tax on the profit or gain made from such disposals. Notably, the tax applies to shares of private companies, urban land excluding principal residences, and rental properties.
While acknowledging the potential for the new tax to generate significant government revenue, Dr. Musoke also cautioned about its potential drawbacks. He highlighted the possibility of the tax hindering economic growth by discouraging property transactions and investments in non-business assets.
This could lead to stagnation in the real estate sector and have broader negative consequences for the economy.
Dr. Musoke also raised concerns about the administrative challenges that both taxpayers and government agencies might face in complying with the new tax regulations. The additional bureaucracy and compliance costs associated with the tax could pose a significant burden.