Former Finance Minister and MP for Karaga, Dr. Mohammed Amin Adam, has challenged the notion that cutting the tax refund allocation from 6% to 4% will create savings for the government.
Declaring his support for the passage of the Income Tax (Amendment) Bill which seeks to abolish betting, lottery, and gaming taxes in Parliament on Wednesday, March 26, Dr. Amin Adam argued that the 2% reduction in tax refunds is already part of government revenue and does not constitute fresh savings.
He explained that, according to the Revenue Administration Act, Section 63(3) any unspent tax refunds at the end of the calendar year are automatically transferred to the Consolidated Fund.
“So if based on that the minister has reduced the percentage of what should constitute the tax refund from 6% to 4%, the 2% which is resulting into what the minister cakks savings is already supposed to go to the Consolidated Fund, is already part of government revenue,” he said.
Dr. Amin Adam pointed out that impact analysis in the committee’s report indicates that between 43% to 49% of expected revenue is typically spent on tax refunds.
As such, he cautioned against portraying the reduction as a major fiscal breakthrough.
