By Our Reporters
URA Assistant Commissioner in charge of Domestic Taxes & Business Policy, Cyprian Chillanyana has named close to 1000 companies and business firms that declared exaggerated losses in order to diminish their tax liability.
He appeared before Parliamentary Finance Committee with a sole aim of defending the new 0.5% new tax government is proposing as a counter measure to overcome companies that over state their losses to pay less taxes.
The 0.5% is being proposed as a tax on losses declared by a company should that happen consecutively for 7 years. Chillanyana corroborated Finance Minister David Bahati’s earlier claims in Parliament last week that most companies deliberately lie about their losses to evade taxes.
The GoU is proposing amending S38 of the Income Tax Act so that such companies can be penalized. The 0.5% is to strictly be determined basing on the company’s gross turnover for the period under review.
Bahati says besides halting tax avoidance, the new tax measure will instantly give government an additional Shs13bn in the new FY2019/20 alone.
Parliament is however reluctant to pass the proposed changes in S38 with influential figures like Ntenjeru North MP Amos Lugoloobi suggesting that URA uses its auditing function and be able to expose those that declare fictitious losses because the new tax will scare off would-be investors if they are going to be punished for loss-making.
Lugoloobi (who chairs Budget Committee) says MPs should vote for more funding for URA to do better in assessing to catch companies falsifying their incomes rather than slapping such a tax on even companies that might genuinely be loss-making.
Lugoloobi views were sharply rebutted by Kabula County MP James Kakooza and Rubanda’s Henry Musasizi who say the tax is okay. This divergence of opinions didn’t prevent URA’s Chillanyana from disclosing companies whose loss-making declarations have since been subjected to suspicion and are to be subjected to thorough auditing scrutiny.
TARGETED COMPANIES
They include Sudhir’s Munyonyo Commonwealth Resort Limited (last year curiously declared loss of Shs48.6bn, Silver Mugisha’s NWSC (Shs293bn in 2018), Bank of Africa (Shs56.1bn); Uganda Electricity Transmission Company Limited (Shs85.9bn), Sudhir’s Rosebud Limited (Shs14.8bn); Karim Hirji’s Imperial Group of Hotels Limited (Shs19.3bn), United Bank for Africa (Shs93.8bn) and UEGCL (Shs137.3bn).
Yet that isn’t all. Others are Roofings Rolling Mills Limited (Shs 209.2bn); BMK’s Hotel Africana Limited (Shs527.9m); Peacock Paints Limited (Shs737.4m); Microfinance Support Centre Limited (Shs5.3bn); Sports View Hotel Ltd (Shs1.1bn), Abacus Parenteral Drugs Limited (Shs30.1bn); Kasese Cobalt Company Limited (Shs97bn); Mweya Safari Lodge Ltd (Shs6.5bn); UWA (Shs14.9bn); Cementers Limited (Shs824.4bn); Barclays Bank (U) Ltd (Shs17bn); Airtel Uganda Limited (Shs28.2bn); DFCU Limited (Shs4.7bn); Oscar Industries (Shs7.4bn) and Watoto Childcare Ministries (Shs51.1bn); Liquid Telecommunications (Shs39.9bn); Lake Victoria Hotel Limited (Shs8.7bn); AVSI Foundation (Shs38.9bn); Kampala Aeroclub Training Centre (Shs30.6bn); The New Forest Company Limited (Shs76.1bn); Kalangala Infrastructure Services Limited (Shs 34.8bn); Eco Bank Uganda Limited (Shs75.8bn); Guaranty Trust Bank (Shs46.2bn); Bugoye Hydro Limited (Shs137.7bn); Sure Telecom Uganda (Shs209 .9bn); Libya Oil Uganda (Shs30.9bn); Smile Communications Uganda Limited (Shs191.4bn) and Hydromax Ltd (Shs56.8bn). (For comments, email us at mulengera2040@gmail.com).
