Non-Governmental Organizations (NGOs) have urged the government to consider granting them tax exemptions on the income generated from their small-scale projects, which are essential for supporting their operational activities.
They are also calling on Parliament to review existing legislation and establish a dedicated fund for NGOs to address the financial shortfall.
This appeal was articulated by Dr. Livingstone Ssewanyana, the Executive Director of the Foundation for Human Rights Initiatives (FHRI), during an exclusive interview at their headquarters in Nsambya.
He discussed the ongoing conflict with the government regarding taxation and the overall working conditions for NGOs in the country.
Ssewanyana highlighted that Section 46 of the NGOs Amendment Act 2024 encourages these organizations to pursue economic activities, especially in light of the decreasing donor funding.
This approach aims to enable NGOs to operate independently and mitigate the challenges associated with reliance on donor support.
He noted that when they chose to comply with the law by establishing strategic income-generating activities, including the construction of commercial buildings and investments in the real estate sector, they were met with aggressive tax enforcement.
The tax authorities relentlessly descended upon their operations, demanding taxes that have significantly complicated their ability to carry out their work.
“We are disappointed that the same government which urged NGOs to invest in economic activities to locally raise resources for the continuous running of our programs in light of dwindling donor funding opportunities has turned around to tax the very projects we have set up,” lamented Ssewanyana.
He urged all stakeholders to collaborate in actively advocating to the government, especially Parliament, to reconsider their longstanding request for a review of the law, to stimulate discussion and facilitate the establishment of the proposed NGO fund, which would guarantee that legitimate NGOs receive financial support to fulfill their objectives, thereby intentionally enhancing the government’s community economic empowerment program.
“We collectively urge all stakeholders to join our civic society spaces in lobbying government but in particular the parliament such that they can review, debate and cause the enactment of the law setting up the NGO fund which would go a long way in securing and extending funds to genuine and legitimate NGOs in their constitutionally guaranteed mandate of supplementing government efforts of service delivery to remote communities,” noted Ssewanyana.
He criticized the relentless pressure exerted by both the Uganda Revenue Authority (URA) and the majority of district local government authorities, compelling individuals to settle property, ground rent, and income taxes, among other obligations.
He recounted a personal experience in which he is currently in dispute with URA over the covert imposition of taxes on their Human Rights House project in Nsambya, a facility they intentionally built to help generate funds for their operations without relying solely on donor support.
“The law seems to be getting very hard on NGOs and we are worried if some NGOs wont close shop due to this taxman’s high handed and unfortunate actions against NGOs which are constitutionally mandated to supplement the government service delivery agenda using the civic spaces,” he observed.
He explained that across the developed world, most governments have set up such a fund for NGOs with a deliberate mandate of ensuring that they support their governments in taking crucial and critical social services to the remote or far to reach communities.
“We are still in a dilemma over how we are going to run our projects in light of the dwindling funding spaces yet the government on whose behalf we serve has clandestinely ignored or accidentally forgotten to play its role of empowering NGOs to ensure that citizens human, civil rights and other demands of which it can’t deliver timely are effectively delivered by NGOs,” he said.
