By Charity Naiga
Parliament has, in a plenary session chaired by Speaker Rt Hon Anita Among, passed the final part of the draft of legislation meant to formally operationalize Islamic Banking in Uganda.
Rt. Hon. Anita Among presiding over Parliament while passing the Islamic banking bill in Uganda
Most important among other things, The Income Tax (Amendment) No. 2 Bill, 2023, is intended to provide for tax measures through which Islamic Banking will operate in Uganda, which heavily runs a conventional banking system.
The Income Tax Amendment Bill, No. 2, unlike the other five Bills meant to operationalize Islamic Banking in the country, was deferred to Thursday after a section of lawmakers failed to harmonize on Clause 1 of the Bill.
In this, legislators, including the shadow Finance Minister, Muwanga Kivumbi, raised fears that clause 1 of the Income Tax Amendment Bill No. 1 would contravene Sharia law, a basis upon which Islamic Banking operates.
This was, however, resolved on Tuesday after Speaker Among directed the opposition-leaning legislators and Attorney General Kiryowa Kiwanuka to hold a private session and agree on the final position.
“Honorable Members, I don’t have any problems with that clause,” Speaker Among said, asking the Hon. Asuman Basalirwa to furnish the House with the humanized position agreed upon.
In the aftermath of the meeting, Basalirwa revealed that “We have had a very fruitful discussion. The learned Attorney General and his side are of the opinion that the wording of the Bill, where business is conducted under Islamic Banking, the provision of interest and taxes will not apply.”
He further indicated that the Attorney General, Kiwanuka, had assured them that their fears had been catered for in the same clause of the bill.
It is against this background that the legislators passed the Income Tax Amendment Bill, No. 2, to form part of the other Bills that, after assent by President Museveni, will operationalize Islamic Banking in the country. The other Bills include The Excise Duty Amendment Bill No. 2 2023, The Financial Institutions Amendment Bill, The Stamp Duty Amendment Bill 2023, and The Value Added Tax Amendment Bill No. 2 2023.
Minutes after the Bill had been passed, the Shadow Minister for Finance, Kivumbi, lauded the government for enacting the said legislation that will now allow Islamic banking in Uganda.
“Islamic banking is not for Muslims; it is for the poorest of the poor in our community, and it will help people irrespective of their religious background,” Kivumbi said.
He added, “We would like to thank the government for considering this product. In our humble way, it has been long overdue.”
The final versions of these Bills as passed by Parliament will now be prepared and sent to President Museveni for assent before they can become law.