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Members of Parliament have questioned the proposal by Government
to write off close to 500 billion shillings in tax arrears.
The MPs were on Tuesday debating the Tax Procedures Code
(Amendment) Bill, 2019 which seeks to amend the Tax Procedures Code Act, 2014,
to write off all unpaid taxes by government as of 30th June 2019.
It also seeks to empower the Commissioner-General to compound offences and to
provide for a list of returns filed with the Commissioner General.
In its report, the Finance committee of Parliament that was
scrutinizing the bill recommended that Parliament approves the proposal to
write off the billions of shillings in tax arrears.
The tax arrears according to the committee arose out of
Government's commitment to pay taxes (customs duties and domestic taxes) on
behalf of entities deemed to be of strategic importance to the country and NGOs
that had contractual obligations with Government.
However MPs have questioned the decision by Parliament to write
off these taxes, but also questioned why Government has to pay tax for private
According to the Minister of Finance in charge of planning, David
Bahati, Government committed to pay taxes for the companies, but do not have
He says they have updated the list of the taxpayers which
Parliament requested, with documents supporting the companies like the Memorandum
of understanding. He asked parliament to support the proposal.
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Muhammad Nsereko, the Kampala Central MP says it is agreeable that
Government must honour commitment, but questioned why companies have been
exempted from income tax and cooperation tax.
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Jacob Oulanyah, the Deputy Speaker of Parliament questioned why Government
agreed to pay tax on behalf of the investors.
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Wilfred Niwagaba the Ndorwa East MP questioned why Government committed itself
to pay the taxes to individuals who are earning income.
He says the matter should be thoroughly looked at as some people
may be benefiting from this.
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According to Bahati, Government committed to pay for the companies, since by
then the law did not allow for tax exemption. He says Parliament rejected to
budget for the tax arrears.
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The debate, however, was deferred by the Speaker of Parliament Jacob Oulanyah
now for the second time as members failed to agree.
The list of some of the companies that were meant to pay taxes are, Steel and
Tube Industries Ltd, which has accumulated tax arrears worth Shillings 20.4
billion, Cipla Quality Chemical Industries Ltd Shillings 57.5 billion, Oil Palm
Uganda Limited Shillings 41 billion and Shillings 134.7 billion, Southern Range
Nyanza Ltd Shillings 86.8 billion, Fine Spinners Uganda Ltd Shillings 2.5
billion and Bugisu Cooperatives Union Shillings 279.1 million.
Those under counterpart funding include Mulago Women Hospital Project
undertaken by Arab Contractors Uganda Limited Shillings 28.3billion, Mulago
Renovation Project by Roko Construction Limited Shillings 10.8 billion,
Construction of One Stop Border Post Malaba and Busia by Cementers Limited
Shillings 9.2 billion, road maintenance contract by Nippon Parts (U) Ltd Shillings
2.7 billion and rehabilitation of community roads by Azu Properties Limited
Shillings 2.1 billion among others.