Bujagali gets another yearlong tax waiver despite Auditor-General's warning

Parliament passed the Income Tax Amendment Bill, 2024, further extending Bujagali Energy Limited's tax waiver for another year.

The decision comes despite warning by Auditor General, John Muwanga about the Shs1.417Trn hemorrhage Uganda lost through tax exemptions in 2022/23 alone.

In his December 2023 audit report, Muwanga noted that Uganda’s foregone taxes through tax waivers amounted to Shs1.417 trillion, with Parliament leading the dishing out of tax waivers worth Shs1.293 trillion.

The Ministry of Finance waived taxed amounting to Shs118.5 billion and John Musinguzi, the commissioner general of Uganda Revenue Authority, also caught the exemption craze by exempting taxes worth Shs5.6 billion.

In March 2023, Parliament initially rejected the Bujagali's five-years tax waiver extension request but kept on extending the waiver for a year and the latest approval means the company has earned three years off its initial request.

This is despite Parliament’s own report revealing that Bujagali owes Ugandans $342,198,189 (Shs1.3 trillion) it received in excess power tariffs it charged Ugandans, through fictitious tariffs computation methods Parliament claimed the company used.

The Opposition warned Parliament against extending Bujagali’s tax waiver even for a week, revealing that between 2018-2021, Uganda has foregone revenue worth Shs388.70 billion through tax exemptions.

The foregone revenue translates to 353 health centre IVs each constructed at Shs1.1 billion, 2,950 secondary school classroom blocks each constructed at Shs131.75 million, and 3,070 primary school classroom blocks each constructed at Shs126.60 million as of 2022.

Pakwach District Woman MP Jane Avur rejected argument fronted by the government that the Auditor General had delayed to complete the forensic audit into Bujagali as earlier requested by Parliament.

“We need to provide timeframe within which the Auditor General should report back," she said.

"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 it will go, it is just subjective, they aren’t even being objective from what rate to what rate?”

Muwanga Kivumbi, the Butambala County MP, said 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 which we have built and refuse this extension of Bujagali because what is happening is becoming impunity," he said.

"They take this Parliament for granted, they don’t respect processes, last minute they sneak a letter. Let us refuse and see what is happening in this country.”

However, Henry Musasizi, the State minister for ginance, 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.