Government has warned Parliament that if Bujagali Electricity Limited (BEL) isn’t granted another 5year income tax waiver, on top of the 16years the company has enjoyed, Ugandans will suffer with high electricity charges both at domestic and commercial level.
The warning was issued by Vianney Mutyaba, Manager Pricing at the Electricity Regulatory Authority (ERA) while appearing before the Ad Hoc Committee on Bujagali, that is scrutunising a proposal by Ministry of Finance to grant the power company another income tax waiver.
This followed a question posed by Muwanga Kivumbi (Butambala County) who tasked Government to explain the impact of not granting another tax waiver will have on charges Ugandans will pay for their electricity, saying that throughout the hearing into the probe, Government has threatened that refusal to grant another tax waiver would likely impact on electricity pricing, yet for all the past 15years the waivers have been on yet the price of electricity has remained high.
He said, “The blackmail that they wave is that if we don’t remove the tax waiver, the tariff will go high. We want you to demonstrate to us the impact in terms of the actual user tariff, the peasant because that is the one we are blackmailing because the decision we are going to take as Parliament is to remove a waiver.”
Mutyaba replied saying, “The first impact will be the increase of the tariff of Bujagali which feeds into of the end user tariff. The current domestic tariff is Shs747.5 per KWH if the waiver isn’t granted, domestic tariff will increase to Shs800.4 which is a 7% increase.”
Minister of Finance, Matia Kasaija who recently admitted that the Bujagali deal was a bad deal during this meeting asked the Committee to unearth all individuals behind this bad deal remarking, “We need to get to the bottom of who made this kind of transaction. This Committee needs to help us unearth these people and what was she or he looking for.”
