Members of Parliament have voiced their concerns regarding the tax waiver associated with the Bujagali Hydropower Project, highlighting potential financial errors and the possibility of Ugandans being overcharged.
During a session of the Committee of Finance, led by Amos Kankunda, legislators scrutinized the methodology used for calculating tariffs and criticized the authorities for not holding investors accountable for their outstanding tax obligations.
On February 18, 2025, officials from Bujagali, along with representatives from the Ministry of Finance, including Henry Musasizi, the Minister of State for Finance (General Duties), appeared before the committee to discuss the Income Tax (Amendment) Bill, 2025, which included considerations for the proposed tax waiver.
The discussions were prompted by an Auditor General’s report that uncovered inconsistencies in tariff calculations and significant amounts of uncollected taxes.
Herbert Tayebwa (NRM, Kashongi County) expressed his dissatisfaction with the findings, pointing out serious irregularities in the tariff computation process.
“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,” he noted.
He further questioned why the government had not acted to recover these funds despite clear evidence of miscalculation.
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, 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,” he 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.
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He questioned whether the funds withdrawn from the project between 2013 and 2015 were being accounted for in the tariff structure.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.
