MPs raise concerns over Bujagali tax waiver

KAMPALA, UGANDA | THE INDEPENDENT | The Finance Committee of Parliament has raised concerns over the Bujagali Hydropower Project’s tax waiver, exposing alleged financial miscalculations and possible overcharging of Ugandans. Led by Committee Chairperson Amos Kankunda, the legislators questioned the basis for tariff computation and accused authorities of failing to hold investors accountable for unpaid taxes.

This was during an interface with officials from Bujagali and the Ministry of Finance, led by Minister of State for Finance – General Duties, Henry Musasizi. The officials had appeared about the Income Tax (Amendment) Bill, 2025, where a tax waiver for Bujagali is under consideration. The discussions stemmed from the Auditor General’s report, which revealed discrepancies in tariff computation and uncollected taxes amounting to millions of dollars.

Kashongi County MP Herbert Tayebwa expressed disappointment with the report, citing serious irregularities in how tariffs were computed.”We computed and found that the tariff calculation was based on incorrect figures. The tax of US Dollars 63 million from interest between 2007 and 2012 was never collected by the Uganda Revenue Authority,” Tayebwa noted.

He further questioned why the government had not acted to recover these funds despite clear evidence of miscalculation. MPs also raised concerns about the management of preferential shares by Bujagali Energy Limited, arguing that their redemption led to financial losses for Uganda.

Budadiri West MP Nathan Nandala Mafabi stated that Bujagali Energy Limited had unfairly profited from Ugandans through questionable accounting practices. “You cannot remove money from a balance sheet without making adjustments. It is criminal to redeem shares and continue charging Ugandans the same high tariffs,” Nandala argued.

The legislators further accused Bujagali of double-charging Ugandans, with Nandala emphasizing that the company continues to earn excessive profits at the expense of ordinary citizens. “They are getting a 19 percent return on investment and still making extra profits. This is cheating Ugandans under the guise of investment,” he said.

Ibanda North MP Xavier Kyooma raised concerns over shareholders continuing to receive dividends even after redeeming shares. He questioned whether the funds withdrawn from the project between 2013 and 2015 were properly accounted for in the tariff structure. “If they withdrew US Dollars 169 million during this period, did they keep earning returns as if nothing had changed? This is treacherous,” Kyooma stated. The debate also saw Amolatar Woman MP Agnes Atim Apea questioning the justification for continued tax waivers. She called for a comprehensive review of tariff calculations for consumers.

“The minister must provide a clear analysis of the errors in tariff computation. We cannot approve waivers based on flawed reports,” she said. The Bujagali Hydropower Project, a 250MW facility commissioned in 2012, has long been at the center of controversy over its financial sustainability and cost to consumers. While initially hailed as a solution to Uganda’s power shortages, concerns over its high tariffs and continued tax waivers have sparked criticism from both lawmakers and the public.

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