The Minister of State for Finance has listed 14 companies that government has resolved to exempt from tax so as to attract more investors in the country.
While appearing before Parliamentary Committee on Budget on Tuesday, State Minister for Finance David Bahati, revealed that government will spend Ugx. 77bn to pay taxes for Bidco Oil Refineries Ltd, Aya Investments Ltd, Steel and Tube, Cipla Quality Chemicals, Uganda Electricity Generation Company Ltd, and Uganda Electricity Transmission Company Ltd.
The other companies to benefit from government tax relief are; NYTIL, Vinci Coffee Industry, Roofings and Rolling Mills, Avsi Foundation, Bujagali Energy Company, Guanghou Dongsong Energy Group, National Cement Company, Fine Spinners and All Nation Christian Care
According to the auditor general’s 2015/16, government has been settling tax obligations for Bidco since 2003, when the company launched operations in Uganda. Last year, government paid Ugx.12.4bn in corporate tax for the same company.
Bahati told the budget committee that tax relief is expected to boost foreign direct investment by through attracting foreign investments that will in turn create jobs and add value to local produce, promote export, generate foreign exchange.
Bahati also revealed that government is planning a 50% percent tax reduction for investors who will start investments in a radius of 50 km outside Kampala. Most companies are concentrated in and around Kampala given the economies of scale.