The NSSF Amendment Bill 2019 raises important questions about social security coverage and taxation in Uganda.
Constitutional Foundation
Uganda's 1995 Constitution mandates the state to make reasonable provisions for the welfare and maintenance of the aged, referencing international standards from ILO Convention 102.
Key Provisions
- Expanded membership: The Bill enables informal sector workers and self-employed individuals to voluntarily contribute, whereas the current Act limits coverage to formal employees in companies with five or more staff.
- Tax treatment: Contributions up to 30% of income become tax-exempt, reversing current practice. Benefits are taxed upon withdrawal, but this isn't double taxation since contributions will be tax-exempt—which isn't the case today.
- Board governance: A stakeholder board composition including worker and employer representatives replaces ministerial appointments.
- Enforcement: Penalties increase from 200,000 to 10 million shillings to improve compliance.
The Bill represents a significant step toward broader social security coverage while maintaining fair taxation principles.
