Parliament goes after steel factories for tax evasion

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Parliament has started investigating steel factories for alleged tax evasion.

This follows claims that factories import finished steel products, which they pass off as raw materials.

That way, they evade a 25 per cent import duty.

It – evasion – accordingly increases the steel factories margins.

The other charge against the steel factories is that in cases where they acknowledge their imports are finished products, they under-declare them.

Parliament will also dig into claims that the steel plants partially invoice their local and export sales.

The factories are also accused of under-declaring Pay As You Earn (PAYE).

Bukooli North Member of Parliament (MP), Mr Gaster Mugoya Kyawa, who moved the motion calling for the investigation further accused the factories accused of failing to remit workers contributions to the National Social Security Fund (NSSF).

Buliisa Woman Representative Norah Bigirwa Nyendwoha seconded the motion.

The motion is also informed by reports – such as the Economist Intelligence Unit and the Uganda Revenue Authority – that raise questions about the steel factories operations.

The Government Chief Whip, Ms Ruth Nankabirwa, welcomed the investigation.

“I see no problem in supporting an investigation that is going to help the government,” Ms Nankabirwa said.
“URA and other agencies will be there to help to give information on what they have done so far.”

The Mukono Municipality MP, Betty Nambooze, said though that tax evasion means an omission by URA.
“Why are we not investigating URA for not doing its work?” Ms Nambooze posed.

Kassanda North MP Simeo Nsubuga concurred.

On the other hand, the Jinja West MP, Moses Grace Balyeku, said some steel factories could be hiding behind the investigation to get at their rivals.

Uganda has 25 steel factories.
Altogether, they produce up to 500, 000 metric tonnes of steel products annually.

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