Members of Parliament have raised concerns over the Bujagali Hydropower Project’s tax waiver, exposing alleged financial miscalculations and possible overcharging of Ugandans.
The legislators sitting on the Committee of Finance chaired by Hon. Amos Kankunda questioned the basis for tariff computation and accused authorities of failing to hold investors accountable for unpaid taxes.
Officials from Bujagali and the Ministry of Finance led by the Minister of State for Finance (General Duties), Hon. Henry Musasizi appeared before the committee on the Income Tax (Amendment)Bill, 2025 on Tuesday, 18 February 2025 where the tax waiver proposed for Bujagali was being considered.
The discussions stemmed from the Auditor General’s report, which revealed discrepancies in tariff computation and uncollected taxes amounting to millions of dollars.
Hon. Herbert Tayebwa (NRM, Kashongi County) expressed disappointment with the report citing serious irregularities in the way tariffs were computed.
“We computed and found that the tariff calculation was based on incorrect figures. The tax of US$63 million from interest between 2007 and 2012 was never collected by URA,” Tayebwa noted.
He further questioned why the government had not acted to recover these funds despite clear evidence of miscalculation.
Officials from the ministry and Bujagali appeared before the committee
MPs further raised concerns about the management of preferential shares by Bujagali Energy Limited, arguing that the redemption of these shares had led to financial losses for Uganda.
Budadiri West MP, Hon. Nandala Mafabi stated that BEL had unfairly profited from Ugandans through questionable accounting practices.
“You cannot remove money from a balance sheet without making adjustments. It is criminal to redeem shares and continue charging Ugandans the same high tariffs,” Nandala Mafabi argued.
The legislators also accused Bujagali of double-charging Ugandans.
Nandala Mafabi emphasised that BEL earns significant profits at the expense of the ordinary citizen.
“They are getting a 19 per cent return on investment and still making extra profits. This is cheating Ugandans under the guise of investment,” he said.
Hon. Xavier Kyooma (NRM, Ibanda North, Ibanda) raised concerns over whether shareholders continued receiving dividends even after redeeming shares.
He questioned whether the funds withdrawn from the project between 2013 and 2015 were being accounted for in the tariff structure.
“If they withdrew US$169 million during this period, did they keep earning returns as if nothing had changed? This is treacherous,” Kyooma stated.
The debate also saw Hon. Agnes Atim Apea (NRM, Amolatar Woman MP) questioning the justification for continued tax waivers. She called for a comprehensive review of the calculations used to determine electricity tariffs for consumers.
“The minister must provide a clear analysis of the errors in tariff computation. We cannot approve waivers based on flawed reports,” she said.
The Bujagali Hydropower Project, a 250MW facility commissioned in 2012, has long been a subject of controversy regarding its financial sustainability and cost to consumers.
While it was initially hailed as a solution to Uganda’s power shortages, concerns over its high tariffs and continued tax waivers have sparked criticism from both lawmakers and the public.
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