Finance ministry on the spot over equity in bailing out companies

Finance ministry on the spot over equity in bailing out companies

Legislators on the Committee on Commissions, Statutory Authorities and State Enterprises have tasked the finance ministry to present documentation on the criteria used in granting bailouts to companies in financial crises.

According to the committee chairperson, Hon. Medard Sseggona, companies belonging to foreign investors have mostly benefited from bailouts compared to companies belonging to Ugandan investors.

“What is the legal and policy framework on which you base to determine who should benefit from your bailouts and who should not? You are helping AYA but you are not helping Sembule who has invested in development of your technology and skills,” said Sseggona.

He raised the concern in a meeting between committee members and officials from the ministry on Friday, 28 June 2024.

The delegation appearing before the committee was led by finance minister, Hon. Matia Kasaija.

Ssegona also tasked the minister to present a schedule of all companies in which the government has bought shares, and appraise the committee with details by Friday, 06 July 2024.

He cited companies including Atiak Sugar Factory, the Munyonyo Commonwealth Resort and ROKO Construction Limited.

“We want to know what we have injected, what the worth of our investment is in terms of shareholding, and our level of participation in managing these companies. We must be able to reap back our money,” Sseggona added.

Hon. Timothy Batuwa (FDC, Jinja South Division West) also tasked the minister to appraise the committee on the status of companies that receive tax waivers from government.

“On that list, let us have Bujagali Energy Limited. Year after year, they seek tax waivers and we want to know what benefit government has derived from this move,” Batuwa said.

Sseggona added that the ministry ought to show the monetary contribution of companies receiving tax waivers, to the economy over the last three years.

Hon. Nathan Itungo (Indep., Kashari South County) raised concern over selective release of funds, citing that some universities receive 100 per cent release of funds whereas others receive only 60 per cent by the close of the financial year.

“If you are releasing, release 70 per cent across the board. But if you give Makerere University 100 per cent and then you give Bunyoro University or Kabale University 55 per cent, that is not good,” Itungo said.

Kasaija told the committee that money for approved budgets is released on a timely basis, adding that the releases are based on the cash available.

On queries by the committee about URA’s inability to assess and collect taxes on gold exports, Kasaija clarified that in May 2024, the Minister for Energy and Mineral Development issued a statutory instrument imposing a levy US$200 per kilogramme of processed gold exported.

He added that the level of purity of gold exported was specified to be at 99.9 per cent.

“URA started the assessment and collection accordingly. From 01 July 2021 to 30 June 2023, a total of 65,135 kilogrammes of processed gold were exported and total tax assessed was Shs47.28 billion. Of this, Shs2.17 billion was paid, leaving Shs45.1 billion in outstanding tax arrears,” Kasaija said.

He added that for the period between 24 May 2024 and 27 June 2024, a total of 4,006 kilogrammes of refined gold was exported and taxes amounting to Shs3.114 billion were collected.

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