MPs question sh77 billion paid out in Corporate Tax incentives

MPs task government to explain “loss” of tax payers’ money through incentives to specific companies as sh524 billion supplementary budget is tabled

Uganda Parliament’s Budget Committee has tasked the Ministry of Finance to explain to them as soon as possible why government chose to help pay huge taxes for profit making companies.

The committee, while reviewing supplementary budget Schedule-One 2016/2017, realized that government had used sh77 billion to pay corporate taxes for companies like Cipla Quality chemicals, Aya Investments, Bidco, Southern Range Nyanza textiles,Uganda Electricity Generation company and Steel and Tube Industries Ltd.

The supplementary budget tabled in line with Sec­tion 25 of the Public Finance Management Act (2015) for the financial year 2016-2017 is worth sh523.9 billion, and it gives a lion’s share to the Uganda Na­tional Roads Au­thor­ity, the Min­istry of De­fence as well as the Min­istry of Works. They are to take sh155 bil­lion, sh60 bil­lion and sh31 bil­lion respectively.

The act de­mands that the Min­istry of Fi­nance ta­bles any additional resources over and above those ap­proved be­fore they can be used.

In cases where the funds have been used, the law demands that the supplementary estimates show­ing such funds used must be presented to par­lia­ment,  within at least four months.

In the Of­fice of the Prime Min­is­ter, sh15 billion was used to purchase emergency food for people in hunger stricken ar­eas. Min­istry of De­fence justified its sh60 billion ex­pen­di­ture above its orig­i­nal ap­proved sh810 billion as clas­si­fied ex­pen­di­ture and op­er­a­tional short­falls.

Mean­while, ac­cord­ing to the supplementary estimates, sh2.9 bil­lion was spent by State House as clas­si­fied ex­pen­di­ture and an­other sh20m was spent on drinks and spe­cial meals in the Pres­i­den­t’s Of­fice. Sh49m was spent on wel­fare and en­ter­tain­ment while sh22m was spent on books and pe­ri­od­i­cals.

Chairman Budget Committee Amos Lugoloobi took a swipe at government ministries and departments particularly State House and the Ministry of defence for failure to work within the appropriated budgets, hence requesting for supplementary budgets.

“It is unfortunate that the Ministry of Defence and State House are the principle culprits. In almost all the supplementary schedules, we see them appearing,” Lugoloobi said.

“What we have noted in the past is that whereas there are agreed upon regulations, government finds it difficult to comply. They have absolutely failed to pass the test claiming that expenditures are unavoidable and unforeseen,” said Lugoloobi.

Here is a summary break­-down of the sh523.9 billion supplementary budget and the top beneficiaries.