MPs halt Bujagali tax exemption

By Francis Lubega

7^th May 2024

A section of Members of Parliament have rejected the proposal by the government to exempt the Bujagali Hydro Power project from income tax and instead demanded for a report of the Auditor General on the project.

The decision was reached during the plenary sitting on Monday, 06 June 2024 as the House considered the Income Tax (Amendment) Bill, 2024.

Speaker Anita Among who presided over the meeting read a letter from the Minister of Finance, Planning and Economic Development, Matia Kasaijja seeking an insertion of a clause in the Bill to give Bujagali Hydro Power, a one-year income tax exemption up to 30 June 2025.

This proposal was however, rejected at committee stage, where there was a general consensus from MPs who tasked the minister to give a timeframe within which the Auditor General’s report would be presented.

Abdu Katuntu, the MP for Bugweri County said that whereas Parliament commissioned the Auditor General to perform an audit of Bujagali, lawmakers do not know the status of the audit.

He pointed out that the government has foregone up to Shs380 billion in revenue since 2012 when the tax waivers started.

Pakwach District Woman MP, Jane Pacuto raised concern over the recurrent requests to exempt the power generator from income tax without a report from the Auditor General.

The Leader of the Opposition, Joel Ssenyonyi underscored the danger of granting Bujagali another exemption without the Auditor General’s report, saying that such a decision would not be well informed.

The Minister of State for Finance, Henry Musasizi committed that he will expeditiously handle the processing of the Auditor General’s report, saying that it will be ready in six months.

Speaker Among, then guided that the minister re-introduces the proposal through an amendment.

According to the Auditor General, Uganda loses 1,200 billion shillings in tax exemptions every year, yet the country relies on borrowing to finance its budget.

END