Lawmakers Demand Transparency on Bailout Criteria from Finance Ministry

Summary:

• Legislators have demanded the finance ministry disclose the criteria for granting financial bailouts, highlighting a bias towards foreign-owned companies. Committee chairperson Hon. Medard Sseggona questioned the fairness and transparency of these bailouts and called for detailed reports on government investments and tax waiver beneficiaries.

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KAMPALA, (Examiner) – In a high-stakes session, legislators from the Committee on Commissions, Statutory Authorities, and State Enterprises have called on the finance ministry to disclose the criteria used for granting financial bailouts to struggling companies. The move follows concerns that foreign-owned companies are receiving preferential treatment over local firms.

Committee chairperson Hon. Medard Sseggona questioned the legal and policy framework behind the bailouts. “What is the basis for determining who receives these bailouts? Why assist AYA and not Sembule, which has heavily invested in our technological development?” Sseggona probed during a heated meeting with ministry officials on Friday, June 28, 2024.

Leading the ministry delegation was Finance Minister Hon. Matia Kasaija, who faced tough questions about the equity and transparency of government investments. Sseggona demanded a detailed schedule of all companies where the government has acquired shares, specifically citing Atiak Sugar Factory, Munyonyo Commonwealth Resort, and ROKO Construction Limited. He emphasized the need for clarity on the value and management of these investments.

Hon. Timothy Batuwa (FDC, Jinja South Division West) also pressed for information on companies benefiting from tax waivers, particularly Bujagali Energy Limited, and the impact of these waivers on the economy over the past three years.

Adding to the scrutiny, Hon. Nathan Itungo (Indep., Kashari South County) highlighted the inconsistency in funding allocations to universities, urging equitable distribution. “Release funds uniformly. It’s unfair for Makerere University to receive 100% while others like Bunyoro or Kabale get only 55%,” Itungo stated.

In response, Kasaija defended the ministry’s actions, stating that budget releases are timely and based on available cash. Addressing concerns about the Uganda Revenue Authority’s (URA) tax collection on gold exports, he detailed a new levy imposed in May 2024, resulting in significant tax collections from gold exports.

From July 2021 to June 2023, 65,135 kilograms of processed gold were exported, accruing Shs47.28 billion in taxes, with Shs2.17 billion paid and Shs45.1 billion outstanding. Additionally, between May 24, 2024, and June 27, 2024, 4,006 kilograms of refined gold were exported, generating Shs3.114 billion in taxes.

The finance ministry has been given until Friday, July 6, 2024, to provide comprehensive documentation on the bailout criteria and government investments. The lawmakers’ demands underscore the need for greater transparency and accountability in managing the country’s financial resources.

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