KAMPALA- The Managing Director of National Water and Sewerage Corporation (NWSC), Dr. Eng. Silver Mugisha has called for amendment of the Value Added Tax (VAT) Act to allow swapping of the corporation’s VAT obligation to Uganda Revenue Authority (URA).
According to Mugisha, swapping the corporation’s VAT to the revenue body means that the water body will have the flexibility to decide that a government entity that owes NWSC budgets less than what it consumes, the over consumption will be swapped with the corporation’s VAT obligation.
Mugisha made the proposals while appearing before the joint Committees of Natural Resources and Finance. He was presenting a petition on unpaid arrears by several government entities.
He revealed that 36 entities including hospitals, the Prime Minister’s office, Ministry of Defence and Veteran Affairs, Uganda Prisons and Uganda Police Force owe the corporation over Shs100 billion.
The water company wants Parliament to authorize adoption of the policy of VAT invoiced and deemed paid, through which NWSC will swap its VAT obligations to URA against the arrears owed by the government entities. He explained that to operationalize the policy, Parliament is required to amend Section 31(2) of the VAT Act.
Mugisha said that the decision to petition Parliament comes after failed attempts to get funds from the Ministry of Finance, Planning and Economic Development, despite a presidential directive instructing the Finance Ministry to settle the arrears.
The Chairperson of the Committee on Natural Resources, Herbert Ariko underscored the urgency of settling the arrears saying that NWSC is not only one of the profitable government bodies but also provides the most important services.
Kumi District Woman Member of Parliament, Christine Apolot welcomed the proposal to amend the VAT Act but suggested that a supplementary budget should be considered, saying that water is a necessity and NWSC should be supported to provide the services.
Elgon County MP Ignatius Wamakuyu encouraged the water body to consider introducing pre-paid meters, saying that this could solve the challenge of arrears.
Mugisha however, said that pre-paid meters will not solve the challenge, as long as the entities continue being underfunded.
