Parliament approved the Income Tax Amendment Bill 2024, effectively prolonging the tax waiver granted to Bujagali Energy Limited for another year in a recent session.
The Auditor General, John Muwanga, highlighted concerns regarding Uganda’s substantial loss of revenue due to tax exemptions, amounting to 1.417 trillion Ugandan shillings during the fiscal year 2022/23 alone.
In his audit report from December 2023, Muwanga underscored the significant impact of tax waivers on the country’s finances. Notably, Parliament accounted for tax waivers totaling 1.293 trillion shillings, while the Ministry of Finance and the Commissioner General of URA waived taxes amounting to 118.5 billion shillings and 5.575 billion shillings, respectively.
Henry Musasizi, the Minister of State for Finance, advocated for the extension of Bujagali’s tax waiver for another year. Although initially conveyed through a letter rather than included in tax Bills, Musasizi assured Members of Parliament (MPs) that the anticipated audit would be completed within six months.
During the parliamentary session, Muwanga Kivumbi, representing Butambala County, expressed reservations about the continued extension of tax waivers. Kivumbi emphasized the need to consider alternative approaches, suggesting that tariff adjustments could offset revenue losses. He raised concerns about perceived disrespect for parliamentary processes and urged MPs to scrutinize such requests more thoroughly.
