A government request to write off over16.85 billion shillings in tax arrears for three entities has revived Parliament’s long-running debate over the country’s tax waiver regime.
Members of Parliament on Tuesday questioned whether the process is transparent, equitable and compatible with the country’s drive to increase domestic revenue.
Finance Minister Henry Musasizi on Tuesday tabled three motions seeking parliamentary approval to waive outstanding tax arrears owed by Ankole Western University, Uganda Printing and Publishing Corporation (UPPC) and K-Roma Limited.
If approved, Ankole Western University will receive a waiver of over one billion shillings in Pay As You Earn (PAYE) arrears, while Uganda Printing and Publishing Company (UPPC) will have tax arrears worth over 13.9 billion shillings written off. K-Roma Limited will receive relief amounting to over 1.864 billion shillings written off.
Under Section 40(1) of the Tax Procedures Code Act, significant tax waivers require parliamentary approval following recommendations by the Uganda Revenue Authority (URA) and the Ministry of Finance. Such waivers are typically justified on grounds of public interest, financial hardship, economic viability or developmental impact.
However, the latest requests quickly shifted attention from the beneficiaries themselves to the broader question of who qualifies for tax relief and whether the process is sufficiently open to all taxpayers.
Kassanda North MP Patrick Nsamba said Parliament regularly receives requests for tax waivers, but the public has little understanding of how beneficiaries are identified.
“We need to have a discussion on matters of tax waivers so that the public may know who qualifies and what procedures are followed,” Nsamba said.
Kalungu West MP Joseph Ssewungu echoed the concern, saying many businesses and institutions struggle with tax arrears, but only a few ever appear before Parliament seeking similar relief.
“Those who are seeking tax waivers are so many, so we would like to know what procedure is used to determine those who qualify,” Ssewungu said.
Deputy Speaker Thomas Tayebwa urged the Ministry of Finance to address the concerns raised by legislators before Parliament considers the motions.
Responding, Musasizi acknowledged the concerns and pledged greater transparency in the administration of tax waivers.”We want to achieve transparency in the way we do things,” he said.
“I want a businessman from Kassanda, who does not know any of us, to come to our systems and be able to access a waiver like any other person who is known to us. When we come back to discuss, I will give full details.” said Musasizi.
The concerns are not different from debates in the 11th Parliament, suggesting that questions about the fairness and transparency of the tax waiver system remain unresolved.
In February 2025, Parliament approved tax waivers worth more than 9.5 billion shillings for six entities, including Nkumba University, Busoga University, Makerere Business Institute, J2E Investment Corporation, Nicontra Limited and Kisiizi Hospital Power Limited.
During that debate, former Bugiri Municipality MP Asuman Basalirwa questioned how ordinary taxpayers become aware of the waiver process and whether all eligible businesses have an equal opportunity to benefit.
At the time, the Chairperson of Parliament’s Committee on Finance, Planning and Economic Development, Amos Kankunda, warned that Uganda was forgoing substantial revenue through tax expenditures, while the Ministry of Finance maintained that taxpayers facing genuine financial hardship could apply for waivers through the Uganda Revenue Authority.
The issue has emerged as the country intensifies efforts to increase domestic revenue to finance public services, infrastructure and debt obligations while reducing reliance on borrowing.
According to the Ministry of Finance’s Tax Expenditure Report for the 2023/24 financial year, the government forewent an estimated 3.609 trillion shillings through tax exemptions, incentives and discretionary relief, equivalent to 1.78 per cent of Gross Domestic Product and about 13 per cent of total tax revenue collected during the year.
The report notes that tax expenditures have increased significantly over recent years, although data limitations may understate the true value.
The figures have led to a broader policy debate. While government argues that targeted tax relief supports investment, protects strategic institutions and promotes economic growth, economists have long cautioned that poorly targeted tax waivers can erode the tax base, distort competition and weaken efforts to mobilise domestic revenue if they are not guided by clear and transparent criteria.
The debate in Parliament reflected that tension. Rather than opposing tax waivers outright, legislators questioned whether the current system gives all eligible taxpayers an equal opportunity to apply and whether Parliament receives sufficient information to assess the economic and public interest benefits of each request.
The motion has been referred to the parliamentary committee for finance for scrutiny before returning to the House for a decision. As Parliament considers the latest requests, lawmakers face a broader policy question that has persisted for years: how to balance the need to support deserving institutions and businesses with the equally pressing need to protect the country’s tax base and ensure that tax relief is granted transparently, consistently and in the public interest-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
