The Ministry of Finance has asked Parliament to approve the waiver of a Value Added Tax (VAT) debt worth Shs1,313,376,467 owed by the Uganda Cooperative Alliance (UCA), citing severe financial difficulties resulting from the fraudulent sale of the organization’s prime properties.
The proposal was tabled before Parliament on October 29, 2025, by Henry Musasizi, the Minister of State for Finance (General Duties), who argued that the request is in line with Section 43(1) of the Tax Procedures Code Act, Cap 343, which empowers the Minister of Finance to waive taxes for any taxpayer, subject to Parliament’s approval.
“Section 43(2) of the Tax Procedures Code Act Cap 343 provides that where a taxpayer’s case is referred to the Minister by URA and the Minister is satisfied that the tax due cannot be effectively recovered, the Minister shall, with the approval of Parliament, remit in whole or part the submission that the tax due as highlighted above cannot be effectively recovered,” said Minister Musasizi.
The Ministry defended its decision by referencing a letter dated July 18, 2025, from John Musinguzi, the Commissioner General of the Uganda Revenue Authority (URA), recommending a full waiver of the VAT arrears owed by UCA due to the organization’s financial hardship.
“As at 16th July 2025, UCA’s tax obligation stood at a principal VAT of UGX672,527,403, which attracted an interest amounting to UGX640,849,064—bringing the total to UGX1,313,376,467,” wrote Musinguzi.
He added, “In light of our earlier communication, we recommend a waiver of Uganda Cooperative Alliance’s VAT arrears amounting to Shs1,313,376,467 in accordance with Section 43(1) and (2) of the Tax Procedures Code Act 2014, as amended, on grounds of financial hardship.”
The Uganda Cooperative Alliance, a body that unites and represents cooperative societies across the country, has in recent years faced financial distress following the alleged fraudulent sale of its prime assets, which crippled its operations.
The waiver is expected to ease the Alliance’s financial burden and help it regain stability as a key institution in promoting cooperative growth and rural economic empowerment.
