Legislators from the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) have pressed Finance Minister Matia Kasaija to provide a detailed list and criteria of companies that have received tax waivers and financial bailouts from the government. They are also seeking to understand the revenue implications of these gestures.
Medard Sseggona, the Chairperson of COSASE and MP for Busiro East, emphasized the need for transparency. “Let us have a list of those companies that have got tax waivers and give us their monetary contribution to the economy over the last three years. This will allow us to compare the amount of tax we would have collected and the number of jobs created, even including lower-tier jobs,” Sseggona stated.
The demand for clarity came during a meeting with officials from the Ministry of Finance and the Uganda Revenue Authority. MPs expressed concern over the secrecy surrounding the award of tax waivers and bailouts, highlighting the lack of clear criteria for qualification.
Sseggona questioned the selection process, citing cases where local companies like Sembule, which manufactured electronics, were not supported, while others like Aya Investments Uganda Ltd received bailouts. “Under what law and policy framework do you determine who benefits? What criteria are used?” he asked.
Elijah Okupa, MP for Kasilo County, raised concerns about the bailout for Pearl of Africa Hotel, questioning the urgency and rationale behind such decisions. He argued that the hotel would continue operating locally even if sold.
These concerns follow a letter from President Museveni to Mmarks Advocates on May 1, 2024, halting the sale of Pearl of Africa Hotel, owned by Aya Investments (U) Ltd, due to a UGX 647 billion debt. The President argued that the hotel was a strategic investment supported by the government and thus should not be auctioned.
Sseggona further pointed out the inconsistent support for struggling businesses, noting the lack of assistance for Skyz Hotel while Pearl of Africa Hotel received intervention. He also inquired about the returns on government investments in Munyonyo Commonwealth Resort, asking for details on dividends, the amount invested, and the government’s involvement in managing these investments.
Additionally, the committee requested details on the conditions attached to bailouts. Sseggona emphasized the need to understand the government’s level of involvement and prospects of recovering the funds. “Do you have prospects of getting back that money? What conditions are you pegging? Are you ensuring that these entities include Ugandans to learn the skills?”
Equally, Timothy Batuwa, the MP for Jinja South Constituency, sought information on the tax waivers granted to Bujagali Energy Limited, questioning the benefits derived from these waivers.
The Tax Expenditure Report for FY 2021/22 by the Ministry of Finance projected a revenue foregone from tax expenditures at UGX 2.881 trillion for FY 2022/23, higher than the UGX 2.478 trillion foregone in 2021/22. The report highlighted significant tax exemptions for projects like the Bujagali Hydro Power Project, which resulted in UGX 399.18 billion in foregone revenue over three years.
The committee’s inquiries aim to shed light on the financial implications of these policies and ensure accountability in the management of public funds.
Source: Parliament Watch