The Speaker of Uganda’s Parliament has questioned the country’s policy on tax incentives, wondering why the same company should be given tax holidays for six consecutive years.
She made the remarks on Tuesday during a session to debate the Tax Procedures Code (Amendment) Bill, 2018.
“If you notice the Minister has been laying papers, there are particular companies that have repeatedly got exemptions for over 5-6years. I have attempted to request exemptions for some organizations, but I have always failed,” Kadaga said.
Also Read: Aya, 14 Other Top Companies Get Tax Holidays
This followed the State Minister of Finance David Bahati’s presentation defending tax incentives to investors.
“It is important that we encourage investment and where we have we have exempted companies, [it has worked]. I want to invite colleagues to visit the Kalangala Palm Oil project; you will be amazed and proud that you took a decision to exempt them for all this time. The Communities have transformed,” Bahati said.
However, Kadaga challenged him, noting that “it isn’t only this project, during Finance debate; there was information that there are companies making profits that have never declared dividends.”
Cecilia Ogwal, the Dokolo Woman MP supported Kadaga, saying: “It is true that the palm oil project in Kalangala was given free land by the Government, but up to now, Government hasn’t declared how many shares we have in that company. We donated land, and so the land was valued, there must be some balance sheet, so how much has the Government paid, how much has the investor paid and therefore, what is the share of the people of Uganda in that oil company?”
James Kakooza, the Kabula County MP said tax exemptions lead to loss of revenue.
“Even if Government issue of granting tax exemption is informed by the investment code, Corporation tax is calculated after making profit, if you don’t make profit, we don’t charge you,” he said.
The Leader of Opposition, Winfred Kiiza said: “We are exempting other businesses from paying corporation tax and here, we are telling other businesses that when we assess and see you are making money, we should tax you. Don’t you think we are missing a point there?
The others we are exempting corporation tax, but the others, we are telling them to hurry to pay.”
Government wants Finance Minister to have powers on who to get tax exemptions or not.
However, Paul Mwiru, the Jinja Municipality East MP said: “I want to oppose that clause that seeks to take away the powers of Parliament and give it to the Minister. When you read the auditor general’s report, in relation to Treasury Memorandum, you realize that we have been suffering with these types of exemptions.”
He added: “You have seen that the Minister has been exempting some companies even without first coming to Parliament and actually, they just want to use this as a window of clearing what they have been doing.
The power to exempt and not exempt lies within this House. If we try to give our powers to the Minister, there will be many exemptions and they will affect the economy.”
