Sunday, February 28, 2021
Home > Featured > URA Reveals Top 817 Companies Declaring Losses

URA Reveals Top 817 Companies Declaring Losses

Uganda Revenue Authority (URA) has named 817 companies that have been declaring losses since 2017 to avoid paying taxes, URN reports.

 They include among others Munyonyo Commonwealth Resort Limited which declared a loss on 48.6 billion Shillings in 2017, National Water and Sewerage Corporation Shillings 293 billion in 2018, Bank of Africa Shillings 56.1 billion, Uganda Electricity Transmission Company Limited Shillings 85.9 billion, Rosebud Limited Shillings 14.8 billion, National Social Security Fund (NSSF) Shillings 889.8 billion, Imperial Group of Hotels Limited Shillings 19.3 billion, United Bank for Africa (Uganda) Limited Shillings 93.8 billion and Uganda Electricity Generation Company Limited Shillings 137.3 billion among others.  

Cyprian Chillanyana, the Assistant Commissioner Domestic Taxes and Business Policy in URA named the companies while defending the proposed 0.5 percent levy on loss making companies.

He explained that many company hide behind declaring loses to evade taxes.

Government seeks to amend Section 38 of the Income Tax Act and insert a subsection requiring taxpayers who have been declaring losses for consecutive seven years to pay 0.5 percent tax on gross turnover for the period in question.  

The Amendment according to the State Minister for Finance in charge of Planning, David Bahati is intended to limit revenue loss that occurs when a business that is making profit takes advantage of an assessed loss to avoid paying revenue for years.

  The proposal, which aims at raising Shillings 13billion, is one of the proposed tax reforms for the coming financial year 2019/2020.

    He told the Finance Committee of parliament chaired by Rubanda East MP, Henry Musasizi that there is need to amend Section 38 of the Income Tax Act that provides for capital allowances as an incentive to investors, and allows investors to deduct amounts invested in capital equipment or industrial buildings from taxable income and carry forward losses.

His submission led to a furious debate by legislators.

The Ntenjeru North MP, Amos Lugoloobi said there is need to strengthen the tax body to do thorough audits to ascertain whether the exemptions are genuine instead of taxing losses.     He says such a proposal would discourage investment in the country. The Budget Committee Chairperson cited the need for URA to assess and find people or companies misrepresenting their incomes, saying the proposed amendment will throughout investors.

His submission attracted a sharp rebuttal from the Kabula County MP, James Kakooza who argued that companies could be using the capital allowance incentive to hide profits. He said there is no company that can stay in business just to make losses year in year out.

His line of argument riled Lugoloobi who told him off, saying that this is how investment works.

The Committee Chairperson, Henry Musasizi argued that people invest to make profits and that it is questionable for one to declare losses year in year out. He noted that his committee was to make a decision on the new tax measure in an internal meeting.  Other affected companies.    

Roofings Rolling Mills Limited declared a loss of Shillings 209.2 billion in 2017, Hotel Africana Limited Shillings 527.9 million, Peacock Paints Limited Shillings 737.4 million, Microfinance Support Centre Limited Shillings 5.3 billion, Sports View Hotel Ltd Shillings 1.1 billion, Abacus Parenteral Drugs Limited Shillings 30.1 billion, Kasese Cobalt Company Limited Shillings 97 billion, Mweya Safari Lodge Ltd Shillings 6.5 billion, Uganda Wildlife Authority Shillings 14.9 billion, Cementers Limited Shillings 824.4 billion, Barclays Bank (U) Ltd Shillings 17 billion, Airtel Uganda Limited Shillings 28.2 billion, DFCU Limited Shillings 4.7 billion, Oscar Industries Shillings 7.4 billion and Watoto Childcare Ministries Shillings 51.1 billion.  

Others are Liquid Telecommunications (U) Ltd Shillings 39.9 billion loss, Lake Victoria Hotel Limited Shillings 8.7 billion, AVSI Foundation Shillings 38.9 billion, Kampala Aeroclub Training Centre 30.6 billion, The New Forest Company Limited Shillings 76.1 billion, Kalangala Infrastructure Services Limited Shillings 34.8 billion, EcoBank Uganda Limited Shillings 75.8 billion, Guaranty Trust Bank (Uganda) Limited Shillings 46.2 billion, Bugoye Hydro Limited Shillings 137.7 billion, Sure Telecom Uganda Limited Shillings 209 .9 billion, Libya Oil Uganda Limited Shillings 30.9 billion, Smile Communications Uganda Limited Shillings 191.4 billion and Hydromax Limited Shillings 56.8 billion.


Leave a Reply

Your email address will not be published. Required fields are marked *