KAMPALA — The Uganda Revenue Authority- URA has commissioned a study to gauge the impact of tax exemptions on the economy. The study will influence policy changes in the next financial year.
Government provides tax exemptions especially in areas of Agriculture, manufacturing, construction, information and communication technology , warehousing and logistics among others, in order to attract foreign investments.
However there are concerns of reductions in tax revenue collection despite the sustained growth of the economy. In 2015, the URA reported that it had foregone total revenue of 1.6 Trillion Shillings as a result of tax exemptions in the 2013/2014 financial year.
Milly Isingoma Nalukwago, the Assistant Commissioner Research, Planning and Development URA, the study will seek to assess the impact of tax exemption which will inform policy formulation.
According to Nalukwago, they are developing the concept on the methodology of the study and sampling the companies.
Thomas Tayebwa, the MP Ruhinda North County says that several Ugandans are facing challenges and yet foreign investors are benefiting from the exemptions. He cites foreign rice importers who were exempted at the expense of Ugandan farmers.
Three companies; Gotovate Uganda Limited, Williex commodities and Akhom were exempted from taxes to import rice during this period of COVID-19.
On Wednesday, Parliament approved the tax exemption on COVID-19 medical supplies and materials and inputs used in the manufacture of equipment for the prevention, protection and treatment of COVID-19.