A government-pushed proposal to levy an extra tax of Shs 50,000 on motorcycles has touched off a fierce debate and protest among members of Kwania Boda Boda Savings and Credit Cooperative Society (Sacco).
In the new proposal, the government suggests that all owners of motorcycles including Boda Boda operators will be subjected to an annual tax of Shs 50,000 effective July 2021.
The levy, which is currently being scrutinized by the finance committee of Parliament, is among a string of new taxes government intends to introduce to raise at least Shs200b in annual revenue.
However, the over 200 Boda Boda Sacco members, under their umbrella group; Kwania Boda Boda Association (KBBA), have asked the government to back down on the proposal.
Speaking during the annual general meeting on April 15, the Boda operators argued that levying an extra tax on their operations would diminish their earnings.
Jimmy Obaro, a Sacco member, said an extra tax would push them out of business.
“Currently, motorcycle owners pay an annual Public Service Van (PSV) license of Shs 60,000 and Shs50, 000 for motor third party, leave alone the local service tax, if the government goes ahead to levy another tax then many would be left with no option but to quit Boda Boda business, this will affect our Sacco, which entirely depends on the Boda Boda job,” he said in an interview.
Another Boda Boda rider, Robert Abal, who operates at Aduku mayor’s garden, said from about Shs 40,000 to Shs 50,000 he makes weekly, he saves Shs 100,000 monthly. He is worried that the new tax will affect his savings and render him bankrupt.
Walter Opyene, the Kwania Boda Boda Sacco chairperson, said 80 percent of his members got motorcycles on loans and are saddled with the burden of repaying the money. He wants the government to back down on the proposal.
In an exclusive interview with the Cooperator last Wednesday, Bageya Waiswa, the permanent secretary in the Ministry of Works, said an extra tax on the Boda Boda sector will help the government to ascertain whether a motorcycle meets required standards.
“Regulating the motorcycle or the Boda Boda industry will in the first place, reduce rampant motorcycle thefts, control accidents and all in all raise revenue to improve service delivery,” he said, noting that the government had restarted the process to ensure SGS resumes inspecting motorcycles and motor vehicles.
According to Bageya, the government is seeking to at least raise Shs7b from motorcycle license.
So far 63,878 motorcycles have already been cleared to enter the country during the first and second quarter of the 2022/21 financial year. However, the current trends indicate the figure will grow by the end of this financial year, giving the government an opportunity to increase revenue projections.
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