Inside National Social Security Fund Amendment Bill 2019: NSSF Managing Director Richard Byarugaba reacts to the government’s plans to tax benefits
The National Social Security Fund Managing Director Richard Byarugaba has responded to the outrage plan by the government of Uganda to tax NSSF Benefits.
Byarugaba says amendments to the law will make savers achieve a higher benefit than what the existing law gives.
He says there’s no need to draw criticism over the tabled bill because it’s favourable.
“What the Bill will be able to do is to incentivise members and also the companies, the employers, by getting tax exemption at the time of contributions as the NSSF having tax exemptions’ at the time of investment. It means that the member will get a higher benefit at the time of withdrawing,” Byarugaba said.
“The first benefit is the age benefit! That will be taxed if it’s taken at the age of 55. However, if the member waits until they are aged 60 they will be exempted. The next benefit we have is the withdraw benefit! That benefit is for members who are 50 years and are no longer in active employment for at least one year,” he added.
Byarugaba’s remarks came after the State Minister for Youth and Children’s Affairs, Florence Nakiwala Kiyingi tabled the National Social Security Funds Amendment Bill 2019, before parliament.
Byarugaba adds that in case of death or invalidity, taxation shall be at a prevailing rate at a time, and members will be assured of a higher benefit.
“The Government will get more money in taxes, the member will get a bigger benefit and there won’t be any losers,” Byarugaba said.
Also in the Bill, members will get an opportunity both in the former and informer sector to make voluntary contributions to NSSF.
Nonetheless, taxation expert, Francis Kamulegeya welcomed the Bill saying that it’s favours every Ugandan and one is as well assured of safety over his/her money.
“This is the best Act we are going to have, because it’s going to accommodate everybody, it’s to make sure our money is safe, it’s going to make sure whatever we want in the Bill to reduce the years, whether to do what? This is the time we should focus on that,” Kamulegeya said.
While Wilson Owere, Chairman General National Organisation of Trade Unions as well said it’s a good bill.
“If you ask me when would I rather pay tax? Today or 30 years from now? I would say at least now. When do you tell me when would I rather get a tax benefit from the government? Is it today or 30 years from now? I say today,” Owere said.
However, lawmakers in the country say the amendment to the Bill will affect the sector and discourage people from saving with NSSF.
They say the government should sympathise with the person who has worked for this country diligently! Retired at over 50 years and is already tired and many times that’s when diseases set in.
They also said that the government has lost the legitimacy because even those people who would have paid the taxes will run away from doing so, because the government is rushing to tax any amount of money they have to consolidate somewhere.