“Stop annual exemptions” – ICPAU pushes for final decision on Bujagali tax waivers

The Institute of Certified Public Accountants of Uganda has criticised the continued renewal of tax exemptions for Bujagali Electricity Company, urging Parliament to adopt a lasting solution instead of repeatedly legislating on the same matter.

Presenting submissions to Parliament’s Finance Committee on tax bills linked to the 2026/27 national budget, Silajji Kanyesigye Baguma, Chairperson of the Institute’s Taxation and Economic Policy Panel, expressed frustration over what he described as a recurring cycle of exemptions.

“The Bujagali hydropower project’s exemption case has been renewed more than three times already. There needs to be a lasting solution to ensure that by 2032, they either start paying or government finds an alternative,” Baguma said.

MPs question ICPAU stance

Lawmakers on the committee pressed the Institute to clarify its position on the proposed extension of the tax waiver to 2032.

Maximus Ochai, the MP for West Budama North, said the Institute’s earlier submission appeared conflicted.

“You indicated as if you were coerced on Bujagali… you sounded frustrated,” Ochai said, asking the Institute to outline clear conditions it would support for any further extension.

In response, Baguma reiterated that Parliament should avoid revisiting the same exemptions annually and instead pursue structural reforms.

Proposal for local ownership

The Institute proposed that any extension of the tax waiver be tied to conditions that promote local participation and long-term benefits for Ugandans.

Baguma suggested that government could require the company to offload shares to local investors or communities, drawing parallels with reforms in the telecommunications sector where local ownership was made a condition for licence renewal.

“We shouldn’t be doing legislation every year on the same issue. If the exemption is granted, it should come with conditions—such as offloading shares—so that dividends remain in the country and Ugandans gain ownership and business opportunities,” he said.

Backing broader tax measures

In the same submission, the Institute reaffirmed its support for new tax measures targeting emerging sectors, including withholding tax on public entertainers, insurance agents, mobile money agents, and winnings from gaming and sports betting.

However, it emphasised the need for clear definitions—particularly on what constitutes public entertainment—to avoid confusion and unintended taxation of private functions such as weddings and family events.

The proposals come as Parliament reviews tax policy changes aimed at boosting domestic revenue mobilisation while balancing incentives for investment and economic growth.