MP’s reject govt move to write off Shs 462 tax arrears

By Moses Kyeyune.

Lawmakers on Parliament’s Committee of Finance, Planning and Economic development have once again watered down, a move by the government to write off tax arrears worth Shs 462 billion.

The figure includes unpaid taxes arising out of government commitments to large scale investors while the rest is uncollected tax from contractors on government projects.

The request presented by the minister of State for Planning David Bahati is veiled in the Tax Procedures Code (amendment) Bill 2019 as one of the measures to reduce the government’s tax burden and unpaid arrears.

The first attempt to write off the arrears was in 2017 but was rejected by Parliament.

The bill also intends to [allow the minister, “write off all unpaid taxes by Government as at June 30, 2019.”

Mr. Bahati explained that the arrears arose out of government’s commitments to pay taxes including customs duties and domestic taxes on behalf of entities deemed to be of strategic importance to the country and on behalf of NGO which had contractual obligations with the government.

Some of the beneficiaries include Southern Range Nyanza (Shs 86b)Arab Contractors (shs 28.4b), Roko Construction (Shs 10.8b) CIPLA Quality Chemicals (Shs 57.5b) and Oil Palm Uganda Ltd (shs 175b) among others,

However, MP’s including Kabula County’s James Kakooza (NRM), Nathan Nandala Mafabi (FDC, Budadiri West) and the committee chairperson Mr Henry Musasizi (NRM, Rubanda East) questioned the government motive.

The lawmakers contend that the government, as the biggest consumer of public revenue, must lead by example in meeting tax obligations.