Jacobsen Fails to Pay UGX50b UGX Tax to URA

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In short
The ad hoc committee on Energy has found out that Jacobsen Uganda Power plant Company limited (JUPPC) has tax arrears amounting to 50.1 billion shillings.

The ad hoc committee on Energy has found out that Jacobsen Uganda Power plant Company limited (JUPPC) has tax arrears amounting to 50.1 billion shillings.

Kasilo MP Elijah Okupa noted on Wednesday that the latest information from Uganda Revenue Authority (URA) indicates that the power company failed to remit the tax to URA from 2006 to December 2011.Okupa observed that the power generating company had only paid 33 million shillings in taxes for the same period.

The Managing Director JUPPC, Dag Moen admitted the failure to pay taxes to URA.

Dusabe Herbert, the JUPPC company secretary explained how the tax accrued. He told MPs the biggest amount on the tax accrues from the type of fuel used. He says that the company uses Heavy Fuel Oil which does not attract zero rated tax.

Uganda Electricity Transmission Company Limited (UETCL) had been paying the 18percent VAT but since 2010 things changed. Dusabe says UETCL failed to remit money for VAT to Jacobsen leading to the 50 billion shillings tax arrears.

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The tax dispute has been ongoing and despite several meetings with URA and UETCL, no tangible results have been achieved. Moen told MPs that the two organisations will hold more meetings to come up with a solution.

MPs said they need to recall UETCL to have the matter properly explained. They said government was not supposed to pay the VAT on behalf of the power company.

In November 2008, Jacobsen Elektro officially commissioned the Namanve 50 MW Thermal Power Plant.

According to the agreement with government, Jacobsen Uganda Power Plant Company (JUPPCL) is supposed to own, operate and transfer the plant to the Government of Uganda, after a period of six years. They however have a loan that runs for 12years.