Civil Society Statement on the Leaked Information on Corporations Dodging Tax Using the Uganda-Mauritius Double Taxation Agreement
Double Taxation Agreements (DTAs) are a tool used by countries to avoid double taxation of individuals and companies that are operating in more than one country. However, DTAs have become a means through which by Multi-National Companies completely dodge payment of tax.
The recent Mauritius leaks revealed how companies all over the world have taken advantage of the treaties signed between Mauritius and least developing countries to avoid paying taxes despite conducting income generating activities in those countries. Uganda is one of the countries that has a tax treaty with Mauritius.
The leaks revealed how companies set up in Mauritius had invested largely in Ugandan companies and to that effect reduced or completely eroded their tax liability in Uganda.
The companies highlighted in the leaks include Electro-Maxx, a company which runs Uganda's largest thermal power plant, located in the eastern town of Tororo.
Another company highlighted in the Mauritius leaks is Biyinzika Poultry International Ltd which in 2014 attracted an investment amounting to $9 million from 8 miles, an Africa- focused private equity firm that bought into its majority stake.
Although, the government of Uganda is currently in the process of re-negotiating its Double Taxation Agreement with Mauritius, it is worth noting that the treaty contains highly contentious clauses which have greatly impacted on the country's domestic revenue. CLICK HERE FOR MORE ON THIS NOTICE