The Ministry of Finance has sought Parliament’s approval to have the UGX1,313,376,467 Value Added Tax owed by Uganda Cooperative Alliance to be waived on grounds of financial difficulties, following the fraudulent sale of the body’s prime properties.
The proposal was tabled before Parliament on 29th October 2025 by Henry Musasizi, Minister of State for Finance, in which he argued that the proposal is in pursuant to Section 43(1) of the Tax Procedures Code Act Cap 343, that gives the Minister of Finance to waive taxes of any taxpayer, subject to Parliamentary approval.
“Section 43(2) of the Tax Procedures Code Act Cap 343 provides that where a taxpayer’s case is referred to the Minister by URA and the Minister is satisfied that the tax due cannot be effectively recovered, the Minister shall with the approval of Parliament, remit in whole or part the submission that the tax due as highlighted above, cannot be effectively recovered,” noted Minister Musasizi.
The Ministry of Finance defended its proposal citing an 18th July 2025 letter written by John Musinguzi, Commissioner General, Uganda Revenue Authority who recommended waiver of VAT arrears owed by Uganda Cooperative Alliance.
“As at 16th July 2025, UCA’s tax obligation stood at the principal VAT is UGX672,527,403, which attracted an interest to a tune of UGX640,849,064 thus leading to a total tax obligation of UGX 1,313,376,467. In light of our earlier communication, we recommend a waiver of Uganda Cooperative Alliance’s VAT arrears amounting to UGX1,313,376,467 in accordance with Section 43(1) and (2) of the Tax Procedures Code Act 2014, as amended on grounds of financial hardship,” wrote Musinguzi.
According to URA, the financial statements of Uganda Cooperative Alliance indicated a drop in the revenue from the rentals and subscriptions from UGX1,814,492,569 in 2021 to UGX1,260,549,645 which represents a 31% drop in revenue from local sources. The decline is attributed to the fraudulent sale of the entity’s prime properties by former UCA leaders.
The Alliance’s short-term loans also increased from UGX48,326,199 in 2021 to UGX405,674,667 IN 2023 while the long-term loans dropped from UGX1,557,948,720 in 2021 to UGX1,123,616,270. The loans obtained from Housing Finance Bank indicated the entity’s indebtedness.
