Africa-Press – Uganda. Gas manufacturer have said government should consider waiving taxes on medical and other gases.
The calls comes in the wake of a tax waiver on liquefied petroleum gas, which is mostly used a cooking aide.Government in June last year waived Value Added Tax on liquefied petroleum gas, which in effect saw prices reduce by at least 10 per cent.
The waiver of the 17 per cent tax sought to encourage dealers of liquefied petroleum gas to reduce the cost to end-user, which in turn would increase demand for cooking gas, especially among homesteads.
However, local manufacturers are now saying, it is time government considered waiving taxes on other important gases such as medical oxygen and industrial gas in order to mitigate shortages and build local manufacturing capacity. At the height of the Covid-19 pandemic last year, government grappled with a shortage of medical oxygen, which resulted in a number of fatalities.
Speaking in an interview, Mr Rajesh Kumar, the Oxygas Limited executive director, said the tax policy on such gases has placed a heavy burden, increasing the costs of production for both producers and end-user.
The taxes, he said, are too high, noting that Oxygas was in final stages of setting up a plant to manufacture argon that is expected to boost local production and capacity as well as reduce prices.
“If the taxes are reduced and we are able to set up a factory here, the prices of heavy gases will reduce by at least 40 per cent,” he said, observing that waiving Value Added Tax on liquefied petroleum should be extended to other important gasses such as medical and industrial.
Some of these gases include medical oxygen, medical air, industrial oxygen, acetylene, carbon dioxide and nitrogen. Others are argon, ammonia, hydrogen and helium.
Regulation
According to Mr Kumar, during Covid-19, manufacture of gas helped government to mitigate a crisis by putting on hold the manufacture of gases to only manufacture medical oxygen.
Therefore, he said government must realise the importance of such gases and boost local capacity through incentives such as tax waivers.
Kumar also asked government to take regulation of gas manufacturing seriously to protect local producers against imports and unscrupulous manufacturers.
