Uganda losing Shs8 trillion in tax exemptions – MP Muwanga Kivumbi

Uganda could be losing well up to Shs8 trillion in tax exemptions, Butambala County MP, Muwanga Kivumbi has said. Muwanga’s worry emanates from the majority report on tax exemptions.

Muwanga, speaking during Parliament plenary on Wednesday, said this makes no sense in light of budgeting constraints occasioned by pressures on the national resource envelope.

“We have almost Shs8 trillion in tax exemptions; we have just highlighted a few. Others are getting corporation tax holidays, which are taxes on the profit. They come here, they get free electricity and land, and then they do not pay tax,” he said.

The shadow minister listed some entities against the proposed exemptions they are to get, totalling Shs588 billion, a figure he said should be collected to finance the budget.

“If we can recover only Shs4 trillion from the tax exemptions, we can balance our budget and implement it; it is about time we launched an inquiry into tax exemptions in Uganda,” said Muwanga.

On account of this, Deputy Speaker Tayebwa said since Parliament establishes a committee to look into the tax exemptions for Bujagali Hydropower Project, the same committee can look into all exemptions.

“We have a committee to look into the tax exemptions of Bujagali; we should not go into the budget cycle without the report; if you have done a good job, we shall give you the other entities to also look at expeditiously in two weeks,” said Tayebwa.

The majority committee report called for a go-slow on the nearly Shs50 trillion projected budget for Financial Year 2023/24.

In its report on the National Budget Framework Paper presented, committee deputy chairperson, Ignatius Wamakuyu Mudimi, said the resource envelope may not be sufficient to cover planned expenditures.

“…it will be necessary to put planning and budgeting on a more fiscally realistic path due to the current global economic challenges,” said Wamakuyu.

Whereas the committee noted a projected Shs1.8 trillion increase in domestic revenue mobilisation efforts, it worries that a big chunk of the budget will go to debt and statutory payments, further leaving near to nothing for actual development work.

Of the Shs49.9 trillion that will be on the table for distribution, already 64.1 per cent of that is likely to be channelled to debt and recurrent expenditure, leaving only 35.9 per cent for development expenditure, which has the potential of positively impacting economic growth.