By Mulengera Reporters
MPs Question Auditor General’s Report on Bujagali Tax Waivers
Auditor General Edward Akol’s tenure is facing scrutiny from Members of Parliament (MPs) over concerns about the quality of reports his office is producing. The latest controversy surrounds his forensic audit of Bujagali Electricity Limited’s tax waivers, with MPs criticizing the findings as weak and raising suspicions of corruption within his office.
The call to summon the Auditor General was led by MPs Herbert Tayebwa (Kashongi County), Nandala Mafabi (Budadiri West), and Geoffrey Ekanya (Tororo North) during a meeting between Parliament’s Finance Committee and the Ministry of Finance. The meeting was convened to scrutinize two tax bills, including Bujagali’s request for yet another income tax waiver—one of several the company has benefited from over the years.
Findings
Tayebwa questioned why the Auditor General ignored findings from Parliament’s Ad Hoc Committee on Bujagali, which had recommended recovering unpaid taxes due to incorrect computations.
“I am disappointed in the Auditor General’s report. We had computed and found that the tariff calculation was based on total equity—equity plus interest—which at the time stood at US$179 million. However, Uganda Electricity Transmission Company Limited (UETCL) had used US$176 million, which was an error,” Tayebwa said.
He further explained that interest on the investment was taxable, yet Bujagali never paid the required 30% tax on US$210 million, amounting to US$63 million, which should have been collected between 2007 and 2012. “Whereas the Auditor General disagrees that this tax is payable, the Uganda Revenue Authority (URA) must recover it,” he emphasized.
Tayebwa also criticized the Auditor General’s recommendation to extend Bujagali’s tax waiver, pointing out that the company had paid dividends of US$475.7 million to shareholders between 2013 and 2022, despite its initial investment being US$179 million, of which US$69 million had already been recouped within two years.
Disciplinary Action
Nandala Mafabi called on the Finance Committee to refer both the Auditor General and Grant Thornton—the auditing firm contracted to review Bujagali’s finances—to the Institute of Professional Auditors for disciplinary action.
“We have professional accounting standards to uphold. If you see a glaring financial irregularity and fail to highlight it, you must be held accountable. The Auditor General is too timid, which is dangerous for someone in his position. How do you remove money from a balance sheet without making any adjustments? I don’t understand which school of accounting he attended,” Nandala said.
Ekanya supported the disciplinary calls and urged the Committee to escalate the matter to the World Bank and the Organisation for Economic Co-operation and Development (OECD) to investigate Grant Thornton’s role in the Bujagali report.
“We need to uphold ethical and professional auditing standards. These firms often violate global standards when operating in Uganda. We should raise this issue with the World Bank’s independent panel of investigations to ensure accountability,” Ekanya argued.
Summon to Auditor General
Finance Committee Chairperson Amos Kankunda agreed to summon the Auditor General but said the meeting would be held behind closed doors.
“We shall have an internal discussion with him because he is part of Parliament. We will also invite the Uganda Revenue Authority to participate,” Kankunda stated.
Minister of State for Finance Henry Musasizi supported the summons, acknowledging that his team lacked the expertise to defend the Auditor General’s findings.
“The issues raised must be addressed, but I do not have anyone from the Auditor General’s office here. I request that we be given time to return with him so that he can respond directly,” Musasizi said.
Tax Waiver
Minister Musasizi urged the Committee to approve an amendment to Section 21(1) of the Income Tax Act to exempt Bujagali Hydropower’s income from taxation until June 2025. He warned that failure to grant the waiver would increase Bujagali’s power generation tariff by 15.5%, from 8.31 US cents per unit to 9.60 US cents, pushing the electricity end-user tariff from UGX 459.8 per unit to UGX 881.7 per unit.
“Not extending the tax waiver will not hurt Bujagali Energy Limited financially because the income tax is recoverable through electricity tariffs charged by UETCL. However, if the Bill is not passed, power prices will rise, affecting the competitiveness of locally manufactured products,” Musasizi argued.
However, Nandala opposed the waiver, questioning why a company making profits should be exempted from paying taxes.
“This is corporate tax—it is paid after making profits, and what remains is distributed to shareholders. Why should the government grant a waiver on corporate tax when Bujagali has already recovered its investment? This is outright exploitation of Ugandans,” Nandala said.
He further suggested that President Museveni may not be fully informed about the situation and called for a meeting with him to present their concerns.
“If the Finance Minister cannot explain this to the President, we shall do it ourselves,” he
Unresolved Issues
Lee Oguzu (Maracha County) pressed the Ministry of Finance to explain what actions had been taken on previous recommendations in the Ad Hoc Committee report on Bujagali. These included the recovery of US$342 million from the company and investigations by the Inspectorate of Government (IGG) into officials at UETCL and the Ministry of Finance.
“There was supposed to be an investigation by the IGG, and the Minister must update us on its progress. The IGG was to probe a US$5 million expense by UETCL, yet we have no feedback. The Ministry of Finance was also required to account for US$2.8 million, but this report says nothing about it. These details must be included in the next report,” Oguzu said.
The Finance Committee is expected to convene another meeting with the Auditor General, URA, and the Ministry of Finance to address these concerns-Parliament Watch. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
