Regressive taxes impacting many women in the informal sector

By Anna Adeke Ebaju

The Ugandan economy is largely comprised of the informal sector, including small businesses supported by knowledge of basic entrepreneurship, running on measly capital. In the face of an aggressive and uncompromising wave of unemployment in the country, many Uganda’s youth spawn daily income from such businesses. The majority, 60 per cent youth, is women. Owing to the looming social and economic injustices attached to their being women, they struggle to improve their livelihood from the small scale businesses. They feed their children and fund their basic needs from the sale of airtime and working as mobile money transaction agents, etc.
These efforts are to enable them fill the gap created by the paucities stemming from the dysfunction of government systems. Majority of them in the informal sector, economic policies with a bearing on the informal sector grossly impact on them. When done wantonly, economic policies such as regressive taxes have the ability to subdue the prosperity of small businesses, stifling women’s economic progress.
On July 22, government approved a controversial tax law in the Excise Duty (Amendment) Act 2018. As per the law, a tax of 1 per cent is meant to apply to all Mobile Money transactions. Drawing an inference from the 1 million credit loan of a young mother from a money lender, the impact of this tax is far reaching. If she opts to receive it through Mobile Money, government takes Shs10,000 off it. This leaves her with 990,000. When she pays fees of her two children at 300,000, government will take another 1 per cent (Shs3,000).
If she chooses to pay Umeme Bill, another 1 per cent of the value will be removed. This cycle must continue for all her expenses until her pocket is emptied.
The State is telling this woman that her fault is to operate a Mobile Money stall, therefore, she must pay heavily for it! The uncertain future of Mobile Money makes the future of appurtenant innovations such as “wewole” equally unpredictable. It is amusing how the executive didn’t foresee the regressive nature of the tax, whose indiscriminate implementation, even with a benefit of doubt as to the motive, impugns the survival of the young woman’s enterprise.
Does the tax melt the income of this young mother? Yes, it deters the progress of her enterprise and seizes every slight streak of life in it. As such, it is hasty and imprudent. And because it ignores the gender aspect of how it will brunt and crash her prosperity, it illumines the laxity in our government’s fight for women and citizens’ rights.
Overly taxing of citizens is counter productive. Not until government performs to the affirmations that maternity wards and cheap maternity care are priorities of our generation. That solutions to the endless, crimes meted out against them for being women are priorities whose solutions are resident in overly taxing their source of livelihood. With the taxes they pay, women in Uganda continue to hustle to access amenities for the full realisation of their maternal functions.
It is bizarre to regurgitate the song from majority of staunch Musevenists on how our country desperately needs $70 billion to achieve its MDG goals when we lose 16 in tax revenue because of multifarious forms of capital flight! Instead of hurrying to tax women and citizens, the government should start with doing a reassessment of exemptions and waivers on taxes resulting from lost revenue?
Clearly, this gap is a fine alternative. Taxation should be a means to ensure that revenues sought are raised in an equitable manner. Tax policy should accord a gender approach to taxation, with taxes envisaging the burdens they thrust on women. Especially when there is a failure to provide urgent attendance to needs of women.
Women today face many threats, including insecurity and deprivations arising from regressive economic policies. The Mobile Money tax is just one of the regressive taxes impacting majority of young women in the informal sector.

Ms Adeke is National Female Youth MP.
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