Parliament Tasks Finance Minister On Performance Of Tax-Exempt Companies
Lawmakers have tasked the Minister of State for Finance, Planning and Economic Development (General Duties), Hon. Henry Musasizi, to review and make recommendations on the impact of companies that are tax-exempt.
Musasizi, together with the Commissioner General, of Uganda Revenue Authority (URA), John Musinguzi, were appearing before the Committee on Finance, to present the tax body’s ministerial policy statement for the 2023/2024 financial year on Thursday, 06 April 2023.
According to URA, Shs2 trillion will be foregone in the 2022/2023 financial year to tax expenditures in form of exemptions, allowances rate reliefs, credits and deferrals.
Committee Chair, Hon. Kiwanuka Keefa, told the Minister that Parliament is poised to discuss the impact of tax exemptions, and yet the committee does not have information.
“The impact of tax exemptions is not known. We need recommendations from the Ministry of Finance on the performance of companies that are tax exempted,” Kiwanuka Keefa said.
Hon. Karim Masaba (Indep., Industrial Division) said that the Ministry should review the performance of such companies, with a view of utilising the money foregone in tax exemptions to fund government programmes.
“Government is looking for Shs1 trillion to fund the Parish Development Model and yet Shs2 trillion is foregone in tax exemptions. The Ministry of Finance should find a solution,” Masaba said.
Hon. Basil Bataringaya (NRM, Kashari North County) said that the Ministry ought to have done an analysis and reported on the performance of companies to inform this financial year’s budgeting process.
“This should be accelerated so that we can work with you. We can only support you when we know the performance of these companies,” Bataringaya said.
Musasizi pledged to provide the recommendations, adding that the Ministry carries out periodic reviews of companies.
“The Ministry has developed a tax review expenditure framework. Some tax exemptions are terminated while others are maintained, based on performance,” Musasizi said.
The legislators also asked URA to recover tax arrears from gold exporters amounting to Shs43 billion.
The Mining and Minerals law, passed in 2021 imposes a tax of USD$ 200 on each kilogramme of gold.
Otuke County Member of Parliament, Hon. Paul Omara, said that the law is being implemented retrospectively, and therefore all gold exporters should pay the tax arrears.
“Ministry of Energy should give a list of these companies to URA and they pay the arrears. This is not little money since we are looking at widening the tax base,” said Omara.
URA Commissioner General, Musinguzi said that some exporters have made undertakings to pay the arrears.
“Some companies have started paying their arrears. We have their records and we shall keep following up,” he said.
He also reported that overall, taxpayers have increased to 3,067,983, representing a growth of 17.19 per cent against a target of 8.5 per cent.
