Uganda writes off Shs4.2b Brookside tax debt

KAMPALA. The government has written off Shs4.21 billion in corporate income tax arrears owed by Brookside Limited, raising questions about the circumstances under which the dairy processor’s tax liability was cancelled.

The write-off is contained in a notice published in the Uganda Gazette by the Ministry of Finance under the Tax Procedures Code Act.

The notice, dated July 10 and signed by then Finance Minister Matia Kasaija, states that Shs4.21 billion in corporate income tax arrears owed by Brookside, formerly known as Sameer Agriculture and Livestock Limited, had been written off under Section 40(1)(a) of the Tax Procedures Code Act.

“Notice is hereby given to the general public … that the amount of tax arrears specified … is written off,” the notice says.

The notice, however, does not state when the arrears accrued, why the debt could not be recovered or what circumstances justified the write-off.

The absence of those details is likely to fuel scrutiny, particularly as Uganda continues to push for higher domestic revenue collections and tighter enforcement against taxpayers in arrears.

Brookside General Manager Benson Mwangi did not respond to inquiries seeking clarification on the tax period covered by the arrears and the circumstances surrounding the write-off.

Calls and text messages to Mr Mwangi went unanswered by press time.

The Ministry of Finance was also contacted for an explanation but had not responded.

What the law says

The write-off was made under Section 40(1)(a) of the Tax Procedures Code Act, which provides the legal basis for the Minister responsible for finance to write off tax arrears in specified circumstances.

The Gazette notice does not, however, spell out which circumstances informed the decision in Brookside’s case.

This leaves unanswered questions about whether the arrears were considered irrecoverable, disputed, affected by insolvency or arose from another circumstance recognised under the law.

The lack of an explanation in the public notice makes it difficult to establish the basis for the cancellation without further information from the Ministry of Finance or the Uganda Revenue Authority.

The development comes as the government seeks to increase domestic revenue mobilisation and reduce dependence on borrowing to finance its growing budget.

The government has set ambitious targets for raising the tax-to-GDP ratio, putting greater pressure on the Uganda Revenue Authority to improve compliance and recover outstanding taxes.

Against that background, tax write-offs involving large sums are likely to attract public interest over whether taxpayers are treated consistently and whether the Treasury is getting value from its enforcement efforts.

From state dairy to private ownership

Brookside’s tax history is tied to the long transformation of Uganda’s dairy industry from state ownership to private investment.

For decades, the formal dairy industry was dominated by Dairy Corporation, a state-owned enterprise established in 1967.

The government began liberalising and restructuring the sector in the 1990s as part of a wider policy of reducing direct state participation in commercial enterprises.

The Dairy Industry Act of 1998 established the Dairy Development Authority and provided the framework for restructuring the sector.

Dairy Corporation was eventually privatised, with Sameer Agriculture and Livestock taking control of its assets and operations in 2006.

The company was a joint venture involving Kenya’s Sameer Group and India’s RJ Corp and took over the dairy business as part of the government’s broader privatisation programme.

The operation later became closely associated with the Fresh Dairy brand.

Brookside takeover

The ownership changed again in 2015 when Brookside Dairy, a Kenyan dairy processor, acquired Sameer Agriculture and Livestock.

The transaction gave Brookside control of the business, including its processing operations, production assets and farmer network, expanding the company’s presence beyond Kenya.

Brookside has since continued to operate in Uganda, producing Fresh Dairy and Brookside-branded products.

The company is largely associated with Kenya’s Kenyatta family, whose members have held interests in the business.

A July 9, 2025 company filing lists Mihoko Kenyatta, John Stuart Armitage and Paolo Maria Tafuri as directors of Brookside Limited in Uganda.

Brookside was founded in Kenya in 1993 and has expanded through acquisitions to become a significant player in the East African dairy industry.

The unanswered questions

The Shs4.21 billion write-off leaves several issues requiring clarification.

When did the arrears arise? The Gazette notice does not specify the tax years or period covered.

Why was the debt written off? The notice confirms the cancellation but does not explain the circumstances that led to the decision.

Was the amount disputed? It is not clear whether Brookside contested the assessment or whether the arrears were accepted but later deemed unrecoverable.

Who recommended the write-off? The public notice does not identify the agency or process through which the arrears were recommended for cancellation.

What does the write-off mean for revenue collection? The government has been urging taxpayers to clear outstanding obligations as it seeks to expand its domestic revenue base.

Answers to these questions would provide the public with a clearer picture of why the Treasury abandoned a tax claim worth more than Shs4 billion.

For now, the Gazette notice establishes that the debt has been written off, but provides little information about the circumstances behind the decision.