Uganda Revenue Authority-URA has named 817
companies that have been declaring losses since 2017 to avoid paying taxes.
They include among others Munyonyo Commonwealth
Resort Limited which declared a loss on 48.6 billion Shillings in 2017,
National Water and Sewerage Corporation Shillings 293 billion in 2018, Bank of
Africa Shillings 56.1 billion, Uganda Electricity Transmission Company Limited Shillings
85.9 billion, Rosebud Limited Shillings 14.8 billion, National Social Security
Fund (NSSF) Shillings 889.8 billion, Imperial Group of Hotels Limited Shillings
19.3 billion, United Bank for Africa (Uganda) Limited Shillings 93.8 billion
and Uganda Electricity Generation Company Limited Shillings 137.3 billion among
Cyprian Chillanyana, the Assistant Commissioner
Domestic Taxes and Business Policy in URA named the companies while defending
the proposed 0.5 percent levy on loss making companies.
He explained that many company hide behind declaring loses to
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Government is proposing an amendment to section 38 of the Income Tax Act
to impose a tax to companies that have been declaring losses in consecutive
seven years. URA is suggesting 0.5 percent tax on gross turnover for the period in
for Planning, David Bahati says the amendment will limit revenue
losses in tax avoidance. He says there are profit- making businesses that intentionally declare losses for tax avoidance purposes. Uganda Revenue Authority expects to raise 13billion shillings 2019/2020 financial year if the proposed tax reform is upheld by Parliament.
Bahati told the Finance Committee of parliament chaired by Rubanda East MP, Henry Musasizi that there is need to amend
Section 38 of the Income Tax Act that provides for capital allowances as an
incentive to investors, and allows investors to deduct amounts invested in
capital equipment or industrial buildings from taxable income and carry forward
His submission led to a furious debate by legislators.
The Ntenjeru North MP, Amos Lugoloobi said URA should be strengthened to audit and ascertain
whether the exemptions are genuine instead of taxing losses.
Lugoloobi, also Parliament's Budget Committee Chairperson said Uganda Revenue Authority can to
assess and find people or companies misrepresenting their incomes. He said the
proposed amendment will discourage new investors.
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His submission attracted a sharp rebuttal from
the Kabula County MP, James Kakooza who argued that companies could be using
the capital allowance incentive to hide profits. Kakooza argued that there is no company
that can stay in business just to make losses year in year out.
Finance Committee Chairperson, Henry Musasizi agreed with Kakooza's argument that people
invest to make profits and that it is questionable for one to declare losses
year in year out.
Musasizi said his committee was to make a decision on the new
tax measure in an internal meeting.
Roofings Rolling Mills Limited declared a loss
of Shillings 209.2 billion in 2017, Hotel Africana Limited Shillings 527.9
million, Peacock Paints Limited Shillings 737.4 million, Microfinance Support
Centre Limited Shillings 5.3 billion, Sports View Hotel Ltd Shillings 1.1
billion, Abacus Parenteral Drugs Limited Shillings 30.1 billion, Kasese Cobalt
Company Limited Shillings 97 billion, Mweya Safari Lodge Ltd Shillings 6.5
billion, Uganda Wildlife Authority Shillings 14.9 billion, Cementers Limited Shillings
824.4 billion, Barclays Bank (U) Ltd Shillings 17 billion, Airtel Uganda
Limited Shillings 28.2 billion, DFCU Limited Shillings 4.7 billion, Oscar
Industries Shillings 7.4 billion and Watoto Childcare Ministries Shillings 51.1
Others are Liquid Telecommunications (U) Ltd Shillings
39.9 billion loss, Lake Victoria Hotel Limited Shillings 8.7 billion, AVSI
Foundation Shillings 38.9 billion, Kampala Aeroclub Training Centre 30.6
billion, The New Forest Company Limited Shillings 76.1 billion, Kalangala
Infrastructure Services Limited Shillings 34.8 billion, EcoBank Uganda Limited Shillings
75.8 billion, Guaranty Trust Bank (Uganda) Limited Shillings 46.2 billion,
Bugoye Hydro Limited Shillings 137.7 billion, Sure Telecom Uganda Limited Shillings
209 .9 billion, Libya Oil Uganda Limited Shillings 30.9 billion, Smile
Communications Uganda Limited Shillings 191.4 billion and Hydromax Limited Shillings