Government has abandoned the proposal to impose a 200,000 shillings license on vehicles and instead introduced a 100 shillings tax per litre of fuel to raise revenue.
This was revealed by Finance Minister in charge of planning David Bahati who was appearing before the Finance committee chaired by Henry Musasizi.
Government had introduced the proposal including a 50,000 shillings annual license fee for motorbikes under Traffic and Road Safety Amendment bill 2021.
According to Bahati, although Government has critical expenditure pressures, it is constrained to generate resources through borrowing, yet Government needs to maintain the current level revenues being generated.
He says that it is in this regard that they have opted to compensate for the loss of revenue earlier projected from the proposals on motor vehicle and motorbike annual licensing of 200,000 shillings and 50,000 shillings respectively by putting a modest increase in excise duty by 100 shillings per liter in diesel and petrol.
This measure is expected to generate 196 billion shillings.
Bahati on fuel Speaking;……
He says this proposal is based on the decision of the committee not to impose another direct tax on ownership of motor vehicles to avoid compliance and challenges. End.