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Gov’t Seeks To Extend Tax Exemption To Bujagali

Government has requested Parliament to extend another income tax exemption to Bujagali Hydro Power Project up to 30th June, 2025 even when the same company has seen Uganda lose out revenue worth Shs388.70Bn through similar exemptions it benefitted from between 2018 to 202l.

In March 2023, Parliament rejected the request by Government to award Bujagali another 5years tax waiver, until the Company refunds US$342,198,189 (Shs1.254Trn) the Company received in excess power tariffs from Ugandan taxpayers, through the fictitious tariffs computation methods it gave to Government, upon which payment was made, but MPs later rescinded on their decision after President Museveni declined to sign the Income Tax Amendment Bill 2023 to law.

At the time, the Opposition warned Parliament against extending Bujagali’s tax waiver even for a week, revealing that between 2018-202l, Uganda has foregone revenue Bujagali Energy Limited amounting to Shs388.70Bn and the foregone revenue translates to foregone 353 Health Centre IVs each estimated at Shs1.1Bn, 2950 secondary school classroom blocks each estimated at Shs131.75 million, and 3070 primary school classroom blocks each estimated at Shs126.60M as of 2022.

The latest request was tabled by Henry Musasizi, Minister of State for Finance during Tuesday’s plenary sitting in which he sought to amend section 21 of the Income Tax Amendment Bill 2025, to grant Bujagali a one year extension and he also expressed the need for Parliament to expeditiously handle the matter within two weeks.

During the same sitting, Musasizi also sought an amendment to the Excise Duty Amendment Bill in which Government is seeking to impose a levy of Shs1500 per litre on Un-denatured spirits of alcoholic strength by volume of 80% or more made from locally produced raw materials; while a levy of 60% or Shs1700 per litre has been proposed on locally produced of alcoholic strength by volume of less than 80%, a move that will likely increase the cost of alcoholic drinks on the market.

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