Download logoThe Ministry of Finance, Planning and Economic Development has asked legislators to approve two separate tax waiver requests for Fresh Cuts Uganda and New Plan Uganda amounting to Shs27.78 billion.
The State Minister for Planning, Hon. Amos Lugoloobi, who appeared before the House Committee on Finance on Thursday, 13 August 2026 said that Fresh Cuts Uganda requested for the waiver on its outstanding tax liabilities in 2025, on grounds of financial hardships, but that the arrears, particularly on Value Added Tax (VAT), kept on increasing.
“In an attempt to recover the tax liability from the taxpayer, URA has issued demand notices to the taxpayer to pay the outstanding tax. In addition, a third-party agency notice was issued to recover the outstanding tax. Despite URA’s efforts, no tax has been collected due to financial hardships,” said Lugoloobi.
Fresh Cuts Uganda requires a waiver of Shs8.92 billion while New Plan Uganda seeks a Shs18.86 billion waver.
The Minister noted that Fresh Cuts Uganda had a negative net worth position as of 2022 worth Shs22 billion, adding that the as of 202, the company owed loans to DFCU bank and IBM worth Shs1.04 billion and Shs20.819 billion respectively.
“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,” Lugoloobi said.
Justifying the waiver for New Plan Uganda, the Minister said the company’s contracts with major clients were terminated, which adversely affected their cash flows and ability to meet tax obligations.
Among the cancelled contracts included one with Total Energies EP Uganda for cultural heritage and archaeological management, and one with Trans-African Pipeline Consultancy Uganda Limited for provision of geotechnical site investigation services.
Lugoloobi said New Plan Uganda was also indebted to DFCU bank as at 15 February 2025 to a tune of Shs11.2 billion, which prompted the bank sale of the company’s properties at giveaway prices.
Legislators questioned the validity of the tax waivers and whether they would revive the companies or serve any benefit to government’s revenue collection efforts.
“If New Plan is relieved of this tax obligation, do you think you can resuscitate yourself and get back into the same business? Are you trying to preserve the company legacy? Your situation seems like it could take you into bankruptcy,” said Hon. Dicksons Kateshumbwa (NRM, Sheema Municipality).
“Between 2010 and 2025, New Plan has paid income tax only twice. They have told us of major contracts like work on Kabale airport, how come that there no income tax paid in the other years? If we give them this waiver, how are we going to benefit as government,” asked Hon. Protazio Begumisa (NRM, Ndorwa County East).
Hon. James Kakooza (NRM, Older Persons Representative-Central) raised concerns over business persons who always seek tax waivers when their companies fall into financial distress.
“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. We should bring these directors to book, because they have other companies that are performing well,” Kakooza noted.
Lugoloobi told the Committee that Uganda Development Corporation (UDC) will provide financial support to the companies after the tax contentions have been resolved.
The Committee will now prepare and present a report to the House on the matter.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
