The Ministry of Finance, Planning and Economic Development has asked Parliament to approve tax waivers totalling Shs27.78 billion for Fresh Cuts Uganda and New Plan Uganda, citing the companies’ financial difficulties and inability to settle their outstanding tax obligations.
State Minister for Planning Amos Lugoloobi told the House Committee on Finance on Thursday that Fresh Cuts Uganda is seeking a waiver of Shs8.92 billion, while New Plan Uganda wants Shs18.86 billion written off.
Minister Lugoloobi said Fresh Cuts Uganda applied for a tax waiver in 2025 because of financial hardships, but its outstanding liabilities, particularly Value Added Tax (VAT), continued to accumulate.
He said the Uganda Revenue Authority (URA) had issued demand notices and a third-party agency notice to recover the debt, but no payment had been realised because of the company’s financial difficulties.
“Based on the above information, we observe high indebtedness, inadequate working capital and negative net worth, which collectively indicate a distressful financial position of the company, hence its inability to settle its tax obligations,” Minister Lugoloobi said.
The minister told legislators that Fresh Cuts Uganda had a negative net worth of Shs22 billion in 2022 and owed DFCU Bank and IBM Shs1.04 billion and Shs20.819 billion respectively.
For New Plan Uganda, Minister Lugoloobi said the company’s financial position deteriorated after major contracts were terminated, affecting its cash flow and ability to meet tax obligations.
Among the cancelled contracts was one with TotalEnergies EP Uganda for cultural heritage and archaeological management, as well as another with Trans-African Pipeline Consultancy Uganda Limited for geotechnical site investigation services.
Minister Lugoloobi added that New Plan Uganda owed DFCU Bank Shs11.2 billion as of February 15, 2025, leading to the sale of some of its properties at what he described as giveaway prices.
However, legislators questioned whether granting the waivers would help revive the companies or undermine government’s revenue collection efforts.
Sheema Municipality MP Dicksons Kateshumbwa questioned whether New Plan Uganda would be able to return to business if its tax burden was lifted.
“If New Plan is relieved of this tax obligation, do you think you can resuscitate yourself and get back into the same business?” Mr Kateshumbwa asked.
Ndorwa County East MP Protazio Begumisa also questioned the company’s tax compliance record, noting that between 2010 and 2025, New Plan Uganda had reportedly paid income tax only twice.
“If we give them this waiver, how are we going to benefit as government?” Mr Begumisa asked.
Central Region Older Persons Representative James Kakooza warned against companies using Parliament as a route to escape tax obligations after getting into financial difficulties.
“URA should get into the details of these companies, so that they do not use Parliament as an escape route to waive taxes when people have consumed money and directors cannot be traced,” Mr Kakooza said.
Minister Lugoloobi told the committee that the Uganda Development Corporation (UDC) would provide financial support to the two companies once the tax disputes are resolved.
The committee is expected to prepare a report on the proposed waivers and present its recommendations to Parliament for consideration.
