The decision was taken during a plenary sitting chaired by Speaker Jacob Marksons Oboth on Tuesday, 01 September 2026.
Members of Parliament presented conflicting views on whether the company satisfied the conditions for a waiver under the Tax Procedures Code Act.
The Committee on Finance, Planning and Economic Development had recommended a waiver of Shs8.73 billion after finding that Fresh Cuts met the financial hardship, impossibility of recovery and undue difficulty tests prescribed under Section 43(1) of the Act.
According to the committee, with a staffing level of 110 people, Fresh Cuts provides market for thousands of farmers however it has accumulated salary, Pay As You Earn and National Social Security Fund arrears.
The committee report presented by Hon. Max Ochai found that in 2022, the company’s liabilities stood at Shs28.66 billion against assets of Shs8.49 billion and as a result, a shareholder had written off a Shs20.82 billion loan in an attempt to revive the company.
Ochai said that the Uganda Revenue Authority’s recovery measures however, worsened the company’s financial difficulties adding that the tax body reportedly froze the company’s bank accounts and confiscated computers and staff records in 2015, forcing operations to stop.
“The company subsequently lost three containers auctioned at Mombasa Port after failing to access funds from its frozen accounts,” Ochai said adding that, ‘the aggressive tax recovery efforts by URA negatively affected the company’s operations, plunging it further into financial distress’.
Despite the committee’s justifications for a waiver, Nyendo-Mukungwe Division MP, Hon. Gyaviira Ssebina objected arguing that a waiver would not address the governance and decision-making shortcomings behind the company’s problems.
“The tax waiver under consideration is not the appropriate remedy to enabling Fresh Cuts Uganda Limited to satisfy its tax obligations. It does not address the underlying issues affecting the company,” Sebina said.
Sebina noted that the owners acquired Fresh Cuts without adequate due diligence and therefore, suffered its historical tax liabilities.
He cited Shs2 billion in bank loans, unpaid salaries exceeding Shs1.5 billion and mortgage obligations to DFCU Bank of Shs4.016 billion and US$520,767, saying, ‘this confirms that the company has liquidity challenges which the waiver cannot cure’.
Jinja South Division West, Hon. Timothy Batuwa proposed a policy reversal where government through Uganda Development Bank (UDB) takes over such companies.
"Whereas this company is useful to Uganda, helping in exportation of animal products, what we need is to swap debt with equity so that UDB helps us to run this company and maintain its strategic benefit," said Batuwa.
Kabula County MP, Hon. Enos Asiimwe tasked government to urgently table a tax expenditure report for Parliament to understand the burden of tax waivers and determine whether the policy should continue to exists.
In a related development, the House also approved a waiver of Shs2.518 billion waiver for Innovations for Poverty Action (IPA) which cleared its principal liability under a 2017 agreement with URA.
IPA voluntarily disclosed a principal liability of Shs2.063 billion in March 2017 and completed instalments by November 2018.
The committee report on IPA faulted URA for waiting until 2024 to recommend the waiver, six years after the organisation had fulfilled its obligations under the agreement.
According to the committee, the delayed action by URA reduced donor funding and the loss of two United States-funded projects had left the non-profit organisation unable to pay the accumulated interest and penalties.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
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