Uganda Revenue Authority and NSSF in sh13b row

Monday, 8th August, 2011

UGANDA Revenue Authority (URA) has not remitted workers’ contribution to the National Social Security Fund (NSSF) amounting to over sh10.5b, MPs have heard.

Appearing before the finance committee recently, URA commissioner general Allen Kagina told MPs that the money had accumulated over the years, accruing interest of over sh3b.

She explained that the money accumulated because “the earlier URA did not meet its pay-as-you-earn tax obligations.”

“We have made a commitment to pay sh1b annually, but I am afraid the interest will soon overtake the principle,” Kagina said.

The Auditor General, in his 2010 report to Parliament, noted that NSSF conducted an audit of URA payroll records for March to June 2001 and established that the tax body had not met its tax obligations.

The report indicated that the arrears had been increasing over the years, and sh3.5b had accumulated as interest since 2005.

“Consequently, management agreed to make an annual payment of sh1b for seven years,” the report said.

However, the Auditors General noted that clearing the bill was not prioritised because management had been reallocating funds earmarked for the purpose.

“For example, sh345m was reallocated from NSSF employer‘s contribution to other expenditures. Delayed settlement of NSSF arrears will result into increased penalties and interest,” the report added.

Defending URA’s budget estimates for the 2011/12 financial, Kagina asked MPs to approve sh3b to start settling the arrears.

“We have been remitting every year but the interest keeps accumulating,” she explained.

MPs advised the tax body to settle the arrears to avoid legal suits from staff.

The MPs also learnt that URA was seeking sh2.5b per year for lease of vehicles.

This was rejected by MPs Geoffrey Ekanya, Frank Tumwebaze and Rose Akol, who argued that URA should instead buy its own vehicles.

The URA commissioner of corporate services, Michael Otonga, explained that the vehicles would be leased for five years and later purchased.

The Government has banned purchase of new vehicles to cut costs.

By Mary Karugaba and Siki Kigongo: The New Vision Newspaper