Hon. Nakiwala Florence (Minister of State for Youth and Children Affairs) on Tuesday moved the National Social Security Fund (Amendment) Bill, 2019 for its first reading.
The National Social Security Fund (amendment) bill, 2019 seeks to expand social security coverage by making contributions to the NSSF mandatory for all workers in the formal sector.
The bill further seeks to allow workers in the formal and informal sectors to make voluntary contributions to the NSSF, enhance the spectrum of benefits available to workers and to improve management of the NSSF.
The bill also seeks to empower the fund to directly lend money to government.
NSSF backs the bill
On Wednesday, the fund issued a statement saying the proposed tax regime within the amendment benefits savers.
“In principle, the fund welcomes and supports the bill,” the statement said.
“NSSF also welcomed the decision by government to retain NSSF as the basic national scheme, entrusted with management of mandatory social security contributions for the entire country.”
In March 2018, cabinet approved expanding social security coverage, enhancing efficiency and effectiveness in investment, providing for introduction of new benefits, improving government and streaming appointment of staff to key positions of the Fund
NSSF says Uganda’s tax regime with respect to pensions and retirement befits a TTE. This means that a members’ contribution is taxed at deduction of payroll, NSSF income is taxed when earned and the member’s benefits are exempted from tax.
“So all member accrued benefits will have been taxed by the time they are paid.”
NSSF claims under the new tax regime, a member will have more money compared to the current tax regime.
Government too will have earned more tax revenues under the new tax regime than it would have collected under the current one.