The Ugandan government has petitioned Parliament to exempt eight companies and individuals from paying taxes amounting to Shs13.391 billion, citing challenges such as the impact of the Covid-19 pandemic and issues related to ill health.
However, a recent report disclosed that Uganda has lost over Shs12 trillion in the past five years through similar tax waivers.
Henry Musasizi, the minister of state for finance, identified the beneficiaries of these proposed 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.
Ibrahim Ssemujju, the Member of Parliament for Kira Municipality, raised concerns about the specifics of certain companies, particularly J2E Investment Corporation, which has a tax liability of Shs2.718 billion.
The company reportedly has close connections with the Army, yet Musasizi admitted to being unaware of the individuals behind J2E Investment Corporation.
Ssemujju also questioned the waiver of businessman Kananura’s Shs3.776 billion tax obligation on the grounds of ill health.
“They claim that J2E Investment Corporation Ltd is constructing barracks for the Army in Kaweweta. The government delayed payments, so it now wants taxpayers to shoulder the company’s tax burden due to its interests. It’s concerning that only one company is awarded Army contracts for such projects,” said Ssemujju.
“When we inquired about the company’s ownership and background, no information was forthcoming. The Minister could not justify why J2E is the sole company with Army contracts,” Ssemujju added.
Members of Parliament have also questioned the criteria used for awarding these tax waivers.
Musasizi explained that taxpayers seeking waivers must submit a request to the Commissioner General of the Uganda Revenue Authority. Under section 40(1) of the Tax Procedures Code Act, the Commissioner can recommend tax waivers if recovery is considered impossible or excessively costly. The Minister then presents the case to Parliament.
“When the Commissioner determines that a tax cannot be effectively recovered due to hardship or difficulty, the case is referred to the Minister. I submitted this request to Parliament based on that recommendation,” Musasizi clarified.
