URA told to produce Karim’s sh1b tax-exemption papers
FINANCE minister Dr. Ezra Suruma has directed the Uganda Revenue Authority (URA) to produce Imperial Resort Beach Hotel’s sh1.1b tax-exemption documents for verification.
By Mary Karugaba
FINANCE minister Dr. Ezra Suruma has directed the Uganda Revenue Authority (URA) to produce Imperial Resort Beach Hotel’s sh1.1b tax-exemption documents for verification.
He said in the absence of satisfactory documents, the hotel must refund the sh1.1b.
In 2005, the Government paid sh1.1b as taxes for imports for the construction of the hotel owned by businessman Karim Hirji.
Suruma said the payments were part of the Government’s policy aimed at boosting the tourism industry, which applies to investors constructing hotels of more than $5m (sh8.2b).
The payments were queried by the Auditor General in the 2004/05 financial year report.
The Auditor General said the payments were not supported by the relevant customs documents. “In the absence of such documents, the possibility that some of the goods imported were not for construction of the hotel cannot be ruled out,†he said.
The Auditor General said that in one case where custom documents were availed, sh13.2m was used to clear beauty products. “These are not construction items,†he observed.
The Auditor General added that upon completion of payment of the sh1b, the Government again committed itself to paying Value Added Tax (TAX) in accommodation for the hotel’s guests.
“The exemption was of blanket nature without specifying the exact amounts the Government would pay. There was also no documentary evidence to show that the hotel guests were not charged VAT. In such a case, the possibility of double taxation cannot be ruled out,†he said.
The Auditor General said the Government also paid sh320m taxes on behalf of BIDCO and Muka Companies, yet the expenditures remained incompletely vouched.
Suruma explained that the Government’s commitment to paying VAT on accommodation was during December 1, 2004 to June 30, 2005.
He said the amount could not be specified at the time because “it was dependent on the number of guests, the time and duration of their stay.â€
FINANCE minister Dr. Ezra Suruma has directed the Uganda Revenue Authority (URA) to produce Imperial Resort Beach Hotel’s sh1.1b tax-exemption documents for verification.
He said in the absence of satisfactory documents, the hotel must refund the sh1.1b.
In 2005, the Government paid sh1.1b as taxes for imports for the construction of the hotel owned by businessman Karim Hirji.
Suruma said the payments were part of the Government’s policy aimed at boosting the tourism industry, which applies to investors constructing hotels of more than $5m (sh8.2b).
The payments were queried by the Auditor General in the 2004/05 financial year report.
The Auditor General said the payments were not supported by the relevant customs documents. “In the absence of such documents, the possibility that some of the goods imported were not for construction of the hotel cannot be ruled out,†he said.
The Auditor General said that in one case where custom documents were availed, sh13.2m was used to clear beauty products. “These are not construction items,†he observed.
The Auditor General added that upon completion of payment of the sh1b, the Government again committed itself to paying Value Added Tax (TAX) in accommodation for the hotel’s guests.
“The exemption was of blanket nature without specifying the exact amounts the Government would pay. There was also no documentary evidence to show that the hotel guests were not charged VAT. In such a case, the possibility of double taxation cannot be ruled out,†he said.
The Auditor General said the Government also paid sh320m taxes on behalf of BIDCO and Muka Companies, yet the expenditures remained incompletely vouched.
Suruma explained that the Government’s commitment to paying VAT on accommodation was during December 1, 2004 to June 30, 2005.
He said the amount could not be specified at the time because “it was dependent on the number of guests, the time and duration of their stay.â€