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Every Car Owner to pay UGX 2 Million for Being on the Road

By Rogers Wanambwa 

KIU, Main Campus - This week, the Ministry of Finance proposed an annual license fee of UGX 200,000 for all car owners as part of the revenue sources to fund the FY 2021/2022 budget.

According to State Minister of Finance, Hon. David Bahati, the move is aimed at streamlining the transport sector by getting rid of illegitimate cars and raising money for the maintenance of roads across the country.

In the breakdown, car owners will pay UGX 200,000 while motorcycle owners will pay UGX 50,000 annually.

This implies that to use the vehicles on the road, one will need a road license, issued differently from the driver's license. Anyone who fails to pay for the road license could be jailed for two years, pay a fine of UGX 2 million, or suffer both imprisonment and fine. Bahati told the committee that if this license is introduced, the country will have roadworthy vehicles and at the same time, the government will get funds to maintain the roads.

“It further proposes to provide for an annual fee to be paid by every person who owns or possess a motor vehicle, trailer, or engineering plant or uses it on the road on or before the 31st of January of every year as may be prescribed by the minister…We think if we introduce this, we shall have roadworthy vehicles on the road and at the same time try to generate revenue to maintain our roads,” said Bahati.

Budadiri West MP, Nandala Mafabi, questioned why the government backtracked from its previous plans of imposing taxes on fuel yet the car license fees was earlier scrapped because it was hard to implement. He indicates that this could increase the rate of corruption where motorists would be paying less money to the officers to obtain the licenses.

Committee Chairperson Musasizi asked why the government insists on imposing direct taxes that are hard to implement and also questioned how owners of vehicles parked at home will be charged yet their cars are not on road.

As it stands, the government has forecasted to raise revenue to a tune of UGX 22.408 trillion with tax measures alone raising UGX 400.93 billion for the financial year 2020/21.

Besides, last week, the Minister of Finance, Matia Kasaija tabled tax measures aiming to make amendments to several bills including, Excise Duty Act, External Trade Act, Fish Act, Income Tax Act, Mining Act, Stamp Duty Act, Tax Appeals Tribunal Act, and Tax Procedures Code Act. The others are; Tobacco Control Act, Traffic and Road Safety Act, and Value Added Tax Act.

If passed, the proposal will come into effect on July 1, 2021. It is embedded in the Traffic and Road Safety Act (Amendment) Bill, 2021 which seeks to impose a license to permit ownership of a motor vehicle, trailer or engineering plant.