President Yoweri Museveni has requested that Parliament reexamine the Income Tax (Amendment) Bill, 2023 and add a provision extending the tax exemption for the Bujagali hydroelectric plant’s one-year period.
The President claims that the waiver will enable the Auditor General and the business to address the issues brought up in the report by the Parliament’s ad hoc committee on Bujagali.
President Museveni stated in a letter to Speaker of Parliament Anita Among, “A clause should be added to provide for an extension of one year of corporation tax waiver for Bujagali hydroelectric development.
The President issued a warning that the price of electricity in Uganda would likely rise if the company’s tax break was abruptly ended.
In response to a question on whether Parliament should review the Act, Museveni stated: “I am aware of an ad hoc committee which Parliament set up to investigate on Bujagali tax waiver. In order to lower the generation of tariffs payable by Bujagali and therefore lower the end user’s prices for energy, the government implemented a corporate income tax waiver.
Parliament recently rejected a request from the finance ministry to extend Bujagali’s tax exemption by another five years while it waits to refund $342 billion (sh1.2 trillion) in excess power tariffs that were allegedly paid by Ugandan taxpayers using fictitious traffic computation methods, according to the company.
The President also requests that Parliament review the proposal to levy a 5% withholding tax on digital enterprises that generate money in Uganda as part of the amendment.
Museveni claims that the claim that digital firms will impose the tax on Ugandan citizens is untrue because the corporations themselves will be responsible for paying the levy.
“This policy was intended to address the taxes of digital economies like Twitter, Amazon, Netflix, and others. Incorrectly stated in the minority report, the clause relating to Ugandan residents and non-residents should be reintroduced, Museveni said.
It should be mentioned that the finance ministry asked for additional time to perform a research on the impact on Uganda’s economy and abandoned plans to impose a 5% withholding tax on the gross revenue that digital enterprises were producing in Uganda in May of this year.
The bill has been forwarded to the House’s committee on finance planning and economic development for reconsideration in the form that the President returned it in.
