The government has abandoned the re-introduction of road license which would cost motorists sh200,000 per car per year, and instead slapped an additional sh100 per litre on fuel.
With the country’s fuel consumption between 5 and 6million litres per day, the state will earn an additional sh200 billion from fuel in the coming financial year that starts on July 1st 2021 and ends on June 30th 2022.
When the finance ministry officials proposed sh200,000 annual levy per car and sh50,000 per motorcycle, it raised eyebrows beacuse the road license was abolished over a decade and a half ago on account of its being unfair, among other reasons, as cars using the roads at different rates were paying the same. Road licence is in effect a direct tax imposed against ownership of a vehicle.
Several fuel companies have already increased pump prices over the past two weeks in anticipation of the new tax, meaning they won’t have to raise it when the budget is read or the financial year starts on July first.For the past two months or so, all stations in Greater Kampala were selling petrol below sh4,000 a litre but many have now raised to sh4,100 or more, blaming it on high global prices.
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