John R. Musinguzi, the URA Commissioner General
Uganda Revenue Authority (URA) has revealed that tax exemptions are likely to cost the Authority Shs2.88 trillion in revenue in the Financial 2022/2023.
The revelation was made by John R. Musinguzi, the URA Commissioner General, while appearing before Parliament’s Finance Committee where the Authority had been summoned over the 2023/2024 National Budget Framework Paper.
“Tax exemption in form of exemptions, allowance rate relief credits and deferrals has overtime led to increased revenue being foregone. Potential revenue to be foregone for this FY2022/2023 is Shs2.881Trn,” said Musinguzi.
The Authority also presented a list of 1,810 categories of sectors enjoying tax exemptions among which include; Agro processing 11, charitable organization 188, Deemed VAT188, SACCO 1289 among other sectors.
To make matters worse, Government has recommended a list of other taxpayers for tax exemptions some of which include; UGACOF worth Shs33.942Bn, Uganda Broadcasting Corporation Shs10.8Bn, Konoike Construction Company Limited Shs4.909Bn, St Mary’s Hospital Lacor Shs282,021,493 among others.
Xavier Kyooma (Ibanda North) wondered why government is continuing to dish out tax exemptions yet they are causing the nation revenue.
According to the Ministry of Finance’s Tax Expenditure report 2020/2021, revenue foregone on account of tax expenditures increased from Shs2.167Trn equivalent to (US$568,730,288) in FY2016/17 to Shs7.722Trn about (US$2,026,305,585) in FY 2020/21.
The report further cites the top beneficiaries of the tax waivers to include; Bujagali Hydro Power Project whose tax waiver is to a tune of Shs92Bn, Uganda People’s Defence Forces (UPDF) the Army has cost Shs95.13Bn in unpaid employment income tax due to their exemption, while MPs have cost Shs126.64Bn in exemptions on their allowances, and exemptions to Business and investment income tax for SACCOs is Shs25.45Bn as part of the beneficiaries of the tax exemptions.
Meanwhile, URA is seeking for Shs162Bn for the enhancement of salaries of its staff, with the Commissioner General saying the low payment has seen many people resign for greener pastures.
He said, “There is need to review the staff welfare and we have looked at the minimal wages enhancement for all the staff and that will require Shs162.095Bn.”
