By our reporter
According to a document tabled before the parliamentary budget committee last month, government will spend Ugx. 77bn to pay taxes for six companies including Bidco Oil Refineries Ltd, Aya Investments Ltd, Steel and Tube, Cipla Quality Chemicals among others.
According to the Observer, government has consistently been meeting the tax obligations of some of the above companies ever since they set up in Uganda.
For instance, the auditor general observed in the 2015/16 report that government had been settling tax obligations for Bidco since 2003, the year the firm set foot in the country.
Last year, government paid a whopping Ugx. 12.4bn in corporate tax for it, while this year, taxpayers will fork out at least Ugx.5.8bn.
For AYA Investments, government has paid its taxes since 2013, when it signed a memorandum of understanding with the ministry of finance to have its taxes paid by government as one of the incentives for the company to operate in the country.
This year, government is paying Ugx 3.7bn in import tax for the firm. The auditor general said there was no indication of when this was supposed to stop. Government paid import taxes for the firm on the construction materials for the Aya hotel project [recently renamed Pearl of Africa hotel. The project was officially launched by President Museveni in two years ago.
Speaking recently at Imperial Royale Hotel in Kampala, at a forum organized by Economic Association of Uganda under the theme: Budgeting for employment, Prof. Julius Kizza who teaches Political Economy of Development and Public Policy Analysis in the Department of Political Science at Makerere University, wondered why government continues wasting scare resources to pay taxes for private foreign companies some of which are already making profits.
He continued: In whose interest is government these taxes? Who are the beneficiaries of these tax holiday?’ Why do we continue using tax payer’s / Wanachi money to subsidize for the rich people to stay in business?
‘‘We continue to give these private companies subsidizes, for we don’t ask them for value addition, no performance targets etc. Which country is this?’’ He said.
He noted that while the country has registered some growth over the years; it has been jobless growth. Adding that government of Uganda has instead created political jobs through creation of new districts, expansion of ministries and presidential advisors.