Uproar as government presents 8 companies for Shs13b tax exemptions – The Kampala Report

The government of Uganda has asked Parliament to exempt 8 companies and individuals from paying taxes worth Shs13.391Bn, citing reasons like effects of Covid-19 pandemic on their businesses and ill health.

This is despite a recent report revealing that Uganda lost over Shs12Trn in 5 years through these tax waivers.

Appearing before Parliament on Tuesday, Henry Musasizi, Minister of State for Finance, listed the beneficiaries of the latest tax waivers as; Nkumba University, J2E Investment Corporation Limited, Nicontra Ltd, Kisiizi Hospital Power Ltd, Busoga University, Makerere Business Institute, Peter Lokwang and businessman Donati Kananura.

However, when Ibrahim Ssemujju (Kira Municipality) demanded details on the owners of some of the companies like J2E Investment Corporation whose tax obligation is to a tune of Shs2.718Bn, and has close ties with the Army, the Minister admitted that he doesn’t know the individuals behind this company.

Ssemujju also raised concerns over the reasons for having businessman Kananura’s tax obligation worth Shs3.776Bn waived off due to ill health.

“They said that this company (J2E Investment Corporation Ltd) is constructing barracks for the Army in Kaweweta, but because Government delayed to pay it. Government wants taxpayers to pay on behalf of this company its taxes because it has interests. What is shocking, UPDF these days has contracts in the construction industry, it is constructing stadia, and roads but when it comes to constructing the Army barracks, there is only one company doing that job,” said Ssemujju.

MPs also raised questions on the criteria used to award these tax waivers to which Minister Musasizi explained that if any taxpayer feels the need to benefit from the waiver, they submit your request to the Commissioner General of Uganda Revenue Authority & section 40(1) of the Tax Procedures Code Act gives the powers to the Commissioner General to recommend taxpayers for tax waivers.

“Where the Commissioner is of the opinion that the whole or any part of the tax payable under the law by the taxpayer can’t be effectively recovered, by reason of hardship, impossibility and due difficulty or excessive cost of recovery, the Commissioner may refer the taxpayer’s case to the Minister. And when the Minister receives the case, the law requires that we submit the case to Parliament and it is on this basis that I submitted a request,” explained Minister Musasizi.