Finance Ministry never scrutinized tax exemption impact

By Francis Lubega

1^st Dec 2022

The Ministry of Finance, Planning and Economic Development has admitted not having an assessment actualizing the impact on the benefits that Shs11.7 trillion tax exemptions has had on Uganda’s economy in the past three years.

The admission was made by Ramathan Ggoobi, the Secretary to the Treasury while appearing before Parliament’s Finance Committee where the Finance Ministry had been summoned to explain how far it had gone to rationalize the criteria upon which tax exemptions are awarded in Uganda.

In his response, Ggoobi tried to justify the contribution of tax waivers and exemptions to the growth facilitated by foreign investors in various sectors but failed to put a concrete figure to this growth and evidence.

However, the committee Chairperson Keefa Kiwanuka criticized the Ministry of Finance for dishing out these tax waivers without bothering to carry out a review of their impact on the economy.

It was from this point that the Minister of State for Planning, Amos Lugolobi informed the Committee that the government has decided to focus on the implementation of the Fiscal Governance Framework for Tax Expenditures that will stipulate the criteria for approval of new tax waivers, institute minimum requirements for initiating new ones and clarifying roles and responsibilities of the entities involved in the governance of tax waivers.