Gov’t Proposal to Write Off UGX 426Bn Tax Arrears Raises Queries

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In short
Officials from the Finance Ministry on Wednesday failed to convince Members of Parliament sitting on the Finance Committee about a proposal for government to write off tax arrears amounting to Shillings 426 billion.

Officials from the Finance Ministry on Wednesday failed to convince Members of Parliament sitting on the Finance Committee about a proposal for government to write off tax arrears amounting to 426 billion shillings. 

The figure is out of the 2.6 trillion shillings tax arrears that have so far documented by Uganda Revenue Authority (URA).

The State Minister for Finance in charge of Planning, David Bahati told the parliamentary finance committee that there was an urgent need for government to write off all its unpaid taxes totaling 426 billion shillings as at 30th June 2019.

Bahati had appeared before the committee together with other officials from the Finance Ministry to present tax amendment bills for the coming financial year 2019/2020.

He explained that the arrears arose out of Governments' commitment to pay taxes (customs duties and domestic taxes) on behalf of entities deemed to be of strategic importance to the country and on behalf of Non-Governmental Organisations (NGOs) which had contractual obligations with Government.

Bahati said that with no funds for payment of the tax arrears budgeted, government is at crossroads hence a need to write them off under the Tax Procedures Code (Amendment) Bill, 2019.

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Budadiri West MP, Nathan Nandala Mafabi questioned the move to write off tax arrears for government yet other Ugandans are paying taxes. Kumi County MP Charles Illukor also queried the tax arrears writing off.

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Mitooma Woman MP Jovah Kamateeka also weighed in saying that government should lead by example by paying all its taxes.

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Bahati told Kamateeka that government had earlier on requested for a supplementary budget to pay off the arrears but this was rejected by parliament as well as a request to waive off the money.

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Tasked by Henry Musasizi, the Finance Committee Chairperson to avail a list of companies for which government seeks to write off taxes, Bahati tabled the list of companies and projects for which government failed to meet counterpart funding and others where it failed to pay taxes to date.

The list accessed by Uganda Radio Network-URN indicates some of the tax holidays for different companies that government has failed to meet is 20.4 billion for Steel and Tube Industries Ltd, 57.5 billion for Cipla Quality Chemical Industries Ltd that manufactures Antiretroviral therapy drugs, 41 billion for Oil Palm Uganda Limited, another 134.7 billion for Oil Palm Uganda Limited, 86.8 billion for Southern Range Nyanza Ltd, 2.5 billion for Fine Spinners Uganda Ltd, 279.1 million for Bugisu Cooperatives Union and others.

Under counterpart funding, government has failed to pay 28.3billion for Mulago Women Hospital  Project undertaken by Arab Contractors Uganda Limited, 10.8 billion for Mulago Renovation Project by Roko Construction Limited, 9.2 billion for Construction of One Stop Border Post Malaba and Busia by Cementers Limited, 2.7 billion for road maintenance contract by Nippon Parts (U) Ltd, 2.1 billion for rehabilitation of community roads by Azu Properties Limited, 8.3 billion for Dott Services Limited, 1.9 billion for Networld (U) Limited, 368 million for Trace Mark, 1.2 billion for consultancy for development of catchment water protection plans by SGI Studio Galli Ingegneria SRL and others.

The other counterpart funding not paid by government include 318 million for Mayuge water supply system by Summit Projekt Limited, 8.4 billion for Sukulu phosphates project by Guangzhou Dongsong energy Group (U) Co. Ltd and 5.06 billion for Mutoni Construction.

Finance Ministry's Director Economic Affairs, Moses Kaggwa said the figures have been assessment by URA and also audited by the Ministry's internal auditor.

Musasizi said that his committee will study the figures and the companies before making a decision on the matter.


About the author

Olive Nakatudde
Olive Nakatudde is a URN journalist based in Kampala. Nakatudde has been a URN staff member since 2013.

Nakatudde started out in journalism in 2009 with Dembe FM radio in Kampala. In 2012, Nakatudde joined Voice of Africa as a political reporter. She has been a photographer since her journalism school days at Makerere University.

Nakatudde is interested in good governance and public policy, which she reports on intensively from the Uganda Parliament. She is a keen follower of cultural affairs in Buganda Kingdom and covers the kingdom's Lukiiko (parliament). Nakatudde also reports on education and health.