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MPs Quiz URA On Shs7 Trillion Tax Exemptions

Muwanga Kivumbi, the Butambala County MP led the probing

MPs on Parliament’s Finance Committee have questioned officials from Uganda Revenue Authority (URA) on the Shs7 trillion  Tax Exemptions, with demands to have the list of Ugandan individuals and companies that are benefiting from the tax bonanza.

Muwanga Kivumbi, the Butambala County MP, led the probing by criticizing URA for exempting taxpayers on taxes like Value Added Tax that are meant to be borne by consumers of goods and services but instead, manufacturers are let off the hook from paying the VAT despite including it in pricing of goods.

 “You also have exemptions worth Shs7Trn. We want to hear from you because we want to campaign against this thing of tax exemptions,” Muwanga said, adding: “We have a debt refinancing in the budget where we are paying an interest of Shs7Trn, but we exempt Shs7Trn in a financial year yet we can wipe it out. You even exempted people on Value Added Tax worth Shs2Trn.”

Henry Musasizi, State Minister for General Duties at Ministry of Finance admitted that not all exemptions have realized the targeted intentions with some turning out to be good while others are not, but currently, an analysis on the performance of the previous exemptions given out by Government are being reviewed and those that haven’t done well will be terminated.

 “We are doing an analysis on the performance of the exemptions we have given, with a view of maintaining those which have done well and terminating those, which we feel are no longer necessary. The objective here is to create a level of play field in the business environment and also at the same time raise the necessary revenue to finance the ever growing demands of the country,” he explained.

Muwanga also quizzed URA on the skyrocketing tax arrears that URA has failed to collect to the level of accumulating to Shs4Trn but was able to only reclaim Shs700Bn.

“You have given us a nice story, but you have arrears of Shs4Trn but you have been able to collect Shs700Bn. Shs4Trn is able to wipe away all our interest payment but we have it with URA,” said Kivumbi.

In the Shs43.083Trn budget for 2022/2023, Government intends to set aside Shs7.651Trn for domestic refinancing out of the Shs15Trn that is for loan repayment.  

In the coming budget, URA has been allocated 525.33bn and of this, Shs205.50Bn is set aside for payment of wages, while Shs275.59Bn is for non wage and the remaining Shs44.24Bn for development expenditure.

John Musinguzi, Commissioner General, URA informed the Committee that in 2020/2021, the Authority collected taxes to a tune of Shs19.263Trn, recording a shortfall of Shs2.375Trn.

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