Bujagali Energy ltd tax waiver extended despite Auditor General warning

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In a recent development, Parliament has passed the Income Tax Amendment Bill 2024, further extending Bujagali Energy Limited tax waiver for another year, despite a warning by Auditor General John Muwanga about the Shs1.417 trillion that Uganda lost through tax exemptions in 2022/23 alone.

In March 2023, Parliament initially rejected the Bujagali 5-year tax waiver extension but kept on extending the waiver for a year, and the latest approval means the company has earned 3 years off its initial request, despite Parliament’s own report revealing that Bujagali owes Ugandans US$342,198,189 in excess power tariffs it charged Ugandans through fictitious tariff computation methods Parliament claimed the company used.

Additionally, In his December 2023 audit report, Muwanga noted that Uganda’s foregone taxes through tax waivers amounted to Shs1.417Trn, with Parliament leading the dishing out of tax waivers worth Shs1.293Trn, while the Ministry of Finance waived taxed amounting to Shs118.5Bn and John Musinguzi, Commissioner General of URA also caught the exemption craze by exempting taxes worth Shs5.575Bn.

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However, the opposition warned Parliament against extending Bujagali’s tax waiver even for a week, revealing that between 2018 and 2021, Uganda has foregone revenue worth Shs388.70 billion through these tax exemptions, and the foregone revenue translates to 353 Health Centre IVs each constructed at Shs1.1 billion, 2950 secondary school classroom blocks each constructed at Shs131.75 million, and 3070 primary school classroom blocks each constructed at Shs126.60 million as of 2022.

Jane Avur (Pakwach DWR) rejected an argument fronted by the government that the Auditor General had delayed completing the forensic audit into Bujagali as earlier requested by Parliament, stating, “We need to provide a timeframe within which the Auditor General should report back. The public is looking at us like we are playing games. Every year we come up with extensions, and the excuse is that tariffs will go up without any proof of how high they will go; it is just subjective; they aren’t even being objective from what rate to what rate.”

Muwanga Kivumbi (Butambala County) noted, “I think enough is enough; let tariffs go high; after all, we have a lot of power on our grid; let us take leverage of the dams that we have built and refuse this extension of Bujagali because what is happening is becoming impunity, they take this Parliament for granted, they don’t respect processes, last minute they sneak a ka letter. Let us refuse and see what is happening in this country.”

In conclusion, Henry Musasizi, Minister of State for Finance who had earlier brought Bujagali request through a letter as opposed to having it included in the tax bills, asked to have the waiver extended for a year and assured MPs that the anticipated audit would be complete within six months.

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