Uganda: Multinatl. firms could be “robbing” country of millions through double taxation treaties, survey reveals

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Article
22 September 2014

Uganda losing more money to tax havens

Author: Joseph Olanyo, Observer (Uganda)

Multinational companies could be robbing Uganda of billions of shillings through double taxation treaties (DTTs), a new survey has revealed. The study, DTTs in Uganda: Impact and Policy Implications, by Seatini Uganda and ActionAid, shows that many companies are extracting resources and selling their goods and services in Uganda, but not paying taxes. The DTTs often facilitate tax avoidance instead of protecting taxes that companies and individuals should pay in Uganda…It proposes that Uganda needs to urgently put in place a formal DTT policy framework that “will be used to guide the country in the development, negotiation and signing of new DTTs”…The United Nations estimates that countries across Africa lose $50bn to $60bn every year to illicit financial flows…[Refers to Bharti Airtel, Zain Telecom]

 

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Report
1 July 2014

Double Taxation Treaties in Uganda: Impact and Policy Implications

Author: Seatini Uganda & ActionAid

Tax provides the much needed revenue for Governments to fund public services for its citizens. It pays for schools and teachers, health centers and health care workers; for roads and infrastructure and major public expenditure in the budgets…very few taxes are collected from the growing business community and large flock of multinational companies that operate in Uganda…Double taxation treaties determine which country has the right to tax corporate profit when a company has subsidiaries in two or more countries…The effect of double taxation treaties is therefore sometimes referred to as double non-taxation…By analyzing key provisions in these treaties, this paper shows that Uganda has signed treaties that in some instances favor the developed countries and the multinational companies rather than ensuring that Uganda retains the right to tax corporate profits generated in Uganda…

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