The latest ‘Commitment to Reducing Inequality Index’ (CRII) Report for the year 2020 has placed Uganda in 17th place in Africa in terms of income inequality.
The report compiled by Oxfam and partners was unveiled in Kampala today.
Speaking at the report launch, Joseph Olwenyi, Coordinator of Finance for Development – Oxfam Uganda, revealed that countries such as Norway (ranking at 5th out of 158 countries) are taking adequate steps to reduce inequality among the population amidst the COVID-19 pandemic.
“Sadly, other countries such as Uganda are ranking poorly overall (130 out of 158), and showing a limited level of commitment to closing the inequality gap.”
He also said that inequality remains high in Uganda despite a drop from 45.2% in 2002 to 41% in 2012 and again a rise to 42.8% in 2017.
The United Nations Sustainable Development Goal (SDG10) is intended reduce inequality and help alleviate poverty.
The report shows among others that 10% of Uganda’s population owns 35.7% of the national income estimated at 97 trillion Shs compared to 10% of Uganda’s poorest population who owned 2.5%(about 2.4 trillion Shs) of the national income.
Susan Achen, the programme head at Uganda Women’s Rights and Access to Justice said there should be legal and policy reforms to address this gap.
“The essence of law and policy is to protect, reduce inequality and mitigate any injury that anybody might face. Currently, we are seeing inequality in the labour and employment sector. There’s need to have a meaningful minimum wage”
She added that currently, the minimum wage is 6,000 Shs, a law which is 40 years old and can’t enable an ordinary Ugandan to acquire basic needs.
Achen said that the gender pay gap needs to be addressed because most women are paid less compared to men.
Grace Namugambe- Financing For Development Officer at SEATINI Uganda blamed the inequality on the increased dependency on indirect taxes like Value Added Tax(VAT), Excise Duty; which are contributing about two thirds of the total tax revenue.
“Indirect taxes are more regressive since they are based more on the value of goods and services rather than people’s ability to pay. This means that for even when the poor are consuming basic items such as sugar and salt, they are subjected to the same tax as the rich.
She added that although the direct taxes like the Personal Income Tax, Pay As You Earn and Corporate Income Tax among others contribute to the country’s income, they are paid by a smaller population of the tax base especially those who are engaged in the formal businesses.