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Parliament okays writing off UGX500b taxes for private companies

Hon. David Bahati, the State Minister for Planning appears before the Parliamentary Committee on Finance. (PHOTO/FILE)

KAMPALA – Following back to back the debate on the proposal by Government to write off tax arrears among private companies, MPs have finally agreed to allow the Executive to write off taxes.

The Ministry of Finance tabled 2019/2020 tax policy measures and among the policies tabled before the Committee of Finance was the Bill seeking to amend the Tax Procedures Code Act, 20l4, to write off all unpaid taxes by the government as at 30th June 2019.

The Amendment also sought to empower the Commissioner-General to compound offences and to provide for a list of returns filed with the Commissioner-General and the taxes were to a tune of Shs499Bn.

While introducing the Bill before the Committee, David Bahati, State Minister for Planning informed Parliament that the arrears arose out of Governments’ commitment to pay taxes (customs duties and domestic taxes) on behalf of entities deemed to be of strategic importance to the country and on behalf of NGOs which had contractual obligations with Government.

The Minister also said that in most donor projects, the obligation to pay taxes rests with the Government and some of the tax arrears arising out of government’s commitment to pay tax component for a contract under counterpart funding arrangements and in some cases, government has not met this obligation and as such, arrears have accrued.

Some of the companies whose taxes are to be written off are; Arab Contractors Limited Shs14,331,383,184, Roko Construction Limited Shs5,849,308,853, Cementer Limited Shs4,618,910,996, Dott Services Limited Shs8,321,105,315, Steel and Tubes Industries Ltd Shs20,486,170,070, Cipla Quality Chemical Industries Limited Shs57,515,270,856, Southern Range Nyanza Ltd to Shs86,881,370,337Bn and Aya Investment Uganda Shs3,941,276,884 among others.

Earlier on, some MPs had called to have Steel and Tubes, as well as Cipla, be struck off the list but when the question was put across for the August House to vote on the matter, MPs voted unanimously to have the taxes written off.

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