URA Slaps  18% VAT On CAA Fire Fighting Machines

URA Slaps 18% VAT On CAA Fire Fighting Machines

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By Gad Masereka

The Uganda Revenue Authority (URA) has added an 18% Value Added Tax (VAT) levy on fire-fighting and safety equipment at Entebbe International Airport that is being acquired by the Civil Aviation Authority (CAA).

However, the officials of the CAA have since urged URA to be fair when imposing taxes on company has just started operating, saying y lead to the backslide of the CAA.

Vianney Luggya, the Public Relations Officer (PRO) at CAA said that “I don’t know why URA charges VAT on fire-fighting equipment because, like ambulances that don’t pay taxes, safety equipment don’t make profits.”

Earlier on the URA had been charging a VAT on CAA’s earnings on airport service including a charge per international ticket issued.
CAA charges USD50 on every ticket a passenger buys for international travel. There is a lesser fee for domestic travel tickets.

It should be noted that the CAA has also come out to oppose taxes that single out aviation supplies to raise revenue. The authority also added that it is only in Uganda where you find a travel ticket being taxed.

CAA has since raised this concern to its supervisor, the ministry of Works and Transport, to ensure that URA reviews the two taxes.

“Putting the 18% Vat on tickets is not acceptable. It raises the price of a ticket, which means some travellers may not be able to afford tickets. All over the world, it is only Uganda doing that. The industry believes that taxing fire equipment gives a negative impact and compromises safety at Entebbe,” Luggya said.

Fred Bamwesigye, the CAA deputy managing director, said that “We want the taxes to be waived. We are already in dialogue with the ministry of Finance and URA and hope there will be rethinking on the taxes.”

Uganda has continued its impressive growth in passenger traffic and aircraft movement, with new 190, 264 arrivals recorded in 2018.

“For the first time ever, the number of international passenger arrivals hit 1.84 million, a 10.2% growth compared to 1.65 million visitors in 2017,” added Bamwesigye.

“This growth could partly be attributed to the increased number of Ugandans travelling for external employment to the Middle East and improved tourism promotion of Uganda’s tourist attractions which have attracted a number of visitors in the recent past,” he noted.

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