Kampala, Uganda | THE INDEPENDENT | The House Finance, Planning and Economic Development Committee has begun reviewing new tax bills for the 2022/23 financial year.
Minister of State for Finance for General Duties, Henry Musasizi, who on Friday, April 29, 2022, presented nine tax bills to the committee, said the government would not introduce new taxes during the next practice.
“Therefore, the proposed amendments on the various tax laws mainly provide clarifications on ambiguous provisions, close loopholes in tax laws and simplify tax laws with a view to supporting tax administration and promoting voluntary compliance by taxpayers, which will ultimately improve revenue mobilization and collection,” Musasizi said.
The Ministry of Finance proposes adjustments to the Income Tax Act, Stamp Duty Act, Tax Appeal Tribunal Act, Excise Duty Act, Value Tax added, the Tax Procedures Code Act, the Tax Appeal Tribunal Act, the Traffic and Road Safety Act and the Uganda Revenue Act.
Among the contentious issues that raised dust during the meeting of the committee chaired by Keefa Kiwanuka was the proposal to amend the Income Tax Act to extend Bujagali Power Generation Company’s income tax exemption. from July 1, 2022 to June 30, 2027.
Bujagali Power Generation Company, which owns and operates the Bujagali Power Station, first enjoyed a 10-year tax exemption in 2007 and then another five-year exemption in 2017, which expires this year.
According to Musasizi, another five-year income tax holiday would reduce the average electricity tariff for the Bujagali hydropower project by 4.7%, from 10.62 US cents per kWh to around 7 US cents per kWh. .
“Our economy is much better when the cost of doing business is low in terms of energy, transport and money, among others. Thus, the Bujagali electricity project aims to reduce the cost of doing business for Ugandans Bujagali has not recovered yet and if we deny them this exemption, the cost of electricity is likely to increase,” Musasizi said.
However, MPs rejected the proposal saying that the 15-year tax holiday that Bujagali has enjoyed is enough for the project to find its economic muscle and perform optimally without such incentives.
“In 2017, this committee was persuaded to renew this exemption for the last time with the expectation that the rates would be reduced to seven cents US per kWh, but they are still at 10 cents. I am not one of those who will exempt Bujagali again. An ordinary Ugandan pays for the land, pays all taxes, but Bujagali is exempt and walks away with all the benefits,” said Muhammad Nsereko (Central Kampala Division).
SOURCE: PARLIAMENTARY MEDIA