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Minister Musasizi, PS Ggoobi Clash Over Shs1Trn Bujagali Tax Exemption

Henry Musasizi (L), Minister of State for Finance (General Duties) appearing before the Ad hoc  Committee

MPs on the Ad hoc Committee investigating the controversial tax exemption to Bujagali Electricity Limited were left in shock when Henry Musasizi, Minister of State for Finance (General Duties) asked the Committee to ignore a letter authored by Ramathan Ggoobi, Secretary to Treasury, highlighting that tax exemption to Bujagali, would cost Uganda Shs1Trn in revenue.

 

It all started when Minister Musasizi cited figures from Uganda Revenue Authority (URA) that highlighted that the tax income foregone between 2018 and 2021 would amount to Shs388.700Bn while the total savings amount to Shs401.28Bn for the 4years which means that Government would save Shs12.58Bn in the four years.

 

Dickson Kateshumbwa (Sheema Municipality) pointed out to the Minister that Ggoobi had also written to the Committee, a revelation that not only shocked but also angered Musasizi who asked the Committee to ignore Musasizi’s letter because he had no powers to write directly to Parliament.

 

“These people are led by me, so take what I submit, if there is an additional, I am going to submit it, the PSST doesn’t have powers to submit directly to you. For now, put that aside, if there is any submission, it must come through me,” said Musasizi.

 

However, calls by Musasizi to have Ggoobi’s letter to be thrown in the bin were rejected by the Committee Chairperson, Kateshumbwa who told Musasizi that the Committee wouldn’t fall prey to the bickering at the Ministry.

 

“For us as the Ministry, we write to the Ministry, not to individuals. There is no communication to the individuals. So what we receive from the Ministry is coming from the Ministry, we don’t know if there has been a discussion, so we are going to receive your statement, but this one is also on record,” Kateshumbwa said.

 

He later revealed that unlike the Minister’s proposal that had indicated Bujagali only needed a tax waiver of 5years, the document from the Secretary to Treasury instead showed that the Company’s tax waiver would run for ten years, and cost Government revenue to a tune of US$260m equivalent to Shs1Trn.

 

“I have looked at the document which the Minister wanted to withdraw, which has the Bijagali Income Tax projection, if I add the amount, it comes to Shs1Trn,” said Kateshumbwa.

 

During the meeting, it was revealed that the Ministry of Finance had asked two lenders of Bijagali to reschedule loans to Bujagali from the 2023 payment debt to 2032.

 

Herbert Tayebwa (Kashongi County) pointed out that the time of refinancing at May 2018, the outstanding loan was Shs423,626,157 and after the lender agreed to another refinanced plan, the loan came to Shs444,306,224 and the refinancing will see Uganda lose Shs934.256BBn, further questioning the relevance of the refinancing.

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