Parliament’s Finance Committee is examining requests totaling approximately Shs30.4 billion in tax and arrears relief for three entities, two private firms and one state-owned mining company. The move by the Ministry of Finance, Planning and Economic Development has raised questions about the true price of saving troubled businesses, the legal thresholds for forgiveness, past accountability failures, and whether taxpayers will see any meaningful public return.
On 13 August 2026, State Minister for Planning Amos Lugoloobi asked legislators to approve Shs27.78 billion in tax remissions. Shs8.92 billion for Fresh Cuts Uganda Limited and Shs18.86 billion for New Plan Uganda.
A day earlier, the Ministry of Energy and Mineral Development sought a Shs2.6 billion write-off of unpaid annual mineral rents owed by Kilembe Mines Limited as the government-owned firm winds up operations. These requests land against the backdrop of the Auditor General’s report on the Consolidated Financial Statements for FY 2024/25, submitted in January 2026.
That audit revealed systemic revenue leakages through tax reliefs and incentives, widespread non-compliance, irregularities in high-profile waivers like those linked to Bujagali Energy, dominance of multi-national firms in discretionary reliefs despite representing a tiny fraction of registered entities.
Previous value-for-money audits have quantified multi-trillion-shilling cumulative costs of tax expenditures and questioned whether promised jobs, local content, and spillover benefits materialize.
The primary legal pathway for the private-company remissions is Section 43 of the Tax Procedures Code Act (Cap. 343). Where the Commissioner General determines that tax cannot be effectively recovered due to hardship, impossibility, undue difficulty, or excessive cost of recovery, the case is referred to the Minister. If satisfied, the Minister may remit the tax in whole or in part, but only with the approval of Parliament.
This parliamentary gatekeeping was deliberately strengthened to curb unilateral executive write-offs and improve accountability. For Kilembe Mines, the request rests on Section 33(1) of the Public Finance Management Act, which requires parliamentary approval before government abandons or remits a claim or writes off a loss of public money.
The arrears arose under Section 189 of the Mining and Minerals Act, Cap. 159, which obliges holders of mineral rights to pay annual mineral rents. Exploration licenses expired in 2022, yet the obligation remained. Auditor General already flagged the receivable and recommended exploring a write-off.
Economically, the government argues that Fresh Cuts, a meat-processing firm, showed a negative net worth of Shs22 billion as of 2022 and carried heavy bank debt (approximately Shs1.04 billion to DFCU and Shs20.8 billion linked to IBM facilities).URA issued demand notices and third-party agency notices without success.
New Plan, a consultancy involved in cultural heritage, archaeological management, and geotechnical work, lost major contracts, including with TotalEnergies EP Uganda and Trans-African Pipeline Consultancy, triggering cash-flow collapse. It owed DFCU about Shs11.2 billion by February 2025, leading to forced sales of assets at steep discounts.
Kilembe Mines Limited, 99 percent government-owned, failed to revive copper production after taking over from Tibet-Hima following the 2017 concession cancellation.
The write-off is presented as housekeeping to clear the path for a new mineral production-sharing agreement signed in 2025 with a joint venture of Sarrai Group Ltd, Nile Fibreboard Ltd, and Uganda National Mining Company Ltd, with copper production targeted for 2029.
Public details on the private firms’ ownership structures remain limited in the parliamentary presentations. Fresh Cuts’ distress stems from chronic under-capitalization, high leverage (meaning excessive reliance on loans and comparatively tiny amounts of own capital), and persistent VAT arrears that continued to accumulate despite earlier requests.
New Plan’s difficulties are termination of key oil-and-gas and infrastructure-related assignments left it unable to service obligations, compounded by low historical income-tax compliance (reportedly only two payments between 2010 and 2025 despite work on projects such as Kabale airport). Fresh Cuts’ negative equity and bank debt leave little recoverable value for URA. New Plan has already seen properties disposed of at “giveaway prices.” Recovery plans center on post-waiver stabilization.
Lugoloobi told the committee that the Uganda Development Corporation (UDC), the state’s industrial investment vehicle, will provide financial support once tax issues are resolved. The expectation is that cleaned balance sheets will enable operational revival, job preservation or creation, and eventual return to the tax net.
MPs were not convinced the benefits are automatic. “If New Plan is relieved of this tax obligation, do you think you can resuscitate yourself and get back into the same business?” asked Dicksons Kateshumbwa, Sheema Municipality MP. “Are you trying to preserve the company legacy? Your situation seems like it could take you into bankruptcy.”
Protazio Begumisa, MP Ndorwa County East questioned New Plan’s sparse income-tax history and asked what concrete benefit government would gain.
James Kakooza, NRM, Older Persons Representative for Central Region warned against allowing directors of distressed firms, who may “control other profitable entities, to treat Parliament as an escape route,” urging URA to “investigate thoroughly and hold individuals accountable.”
On Kilembe, Patrick Nsamba Oshabe, MP Kassanda County North questioned “the urgency of a write-off while winding-up continues and the company is not party to the new agreement.”
Other MPs pressed for environmental risk mitigation plans (floods have previously disrupted operations) and protections for workers. The concerns echo long-standing Auditor General warnings that tax reliefs often produce “deadweight loss,” fail to enforce local-content or employment conditions, and favor a narrow set of beneficiaries.
Past recommendations call for performance-based incentives tied to verifiable metrics, mid-term reviews with automatic termination for non-compliance, cleanup of the inactive taxpayer register, and a pivot away from low-spillover sectors.
Government’s stated rationale for further support after relief is rationally hinged on unrecovered tax yields nothing, while a revived firm, backed by UDC equity or financing, can generate future payroll taxes, VAT, corporate income tax, and economic activity.
The Finance Committee is preparing its report for the full House in the coming days. Approval would clear roughly Shs30.4 billion from the books. Rejection or heavy conditioning would signal tighter scrutiny of hardship claims. Either outcome will test whether Uganda can balance compassion for distressed enterprises with the discipline required to protect a still-narrow tax base and deliver measurable returns to citizens-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
