Cabinet gives URA go-ahead on dubious account holders

Kampala, Uganda | THE INDEPENDENT | Government has asked Uganda Revenue Authority (URA) to drop a recent directive for banks to release to them account details of all their clients.

Uganda’s cabinet decided on Monday that the URA move “would cause unnecessary litigation and some turbulence in the banking sector and thus affect the economy.”

They instead advised URA to target account holders they suspect to be dodging taxes. “URA should target accounts of individuals who are a subject of their tax investigation as has been the practice,” a statement from the cabinet meeting said.

URA was also advised to work and coordinate with the Financial Intelligence Authority – another government statutory body mandated to monitor all financial inflows.

Last week, the Uganda Bankers Association (UBA) challenged the directive to its members requiring them to furnish information related to all the accounts they hold.  They also decided to file a petition in the Constitutional Court contesting the constitutionality of the various provisions of the tax law relied on by the URA in their notice.

Uganda Revenue Authority (URA) last month wrote to all Ugandan banking institutions asking them to release demographic and financial including account turnover and balances on all accounts held for the years 2016 and 2017 on the basis of section 42 of the Tax Procedures Act 2014.

The statement, signed by UBA chairman Fabian Kasi and Executive Director Wilbrod Owor added that “The UBA Members are supportive of initiative to grow tax revenue are URA’s primary custodial agents for collection of taxes. Nonetheless, the request for information contained in the notices raises a number of legal issues concerning constitutionally protected fundamental rights which could expose the member financial institutions to legal liability.”

UBA said member financial institutions are also concerned about the possible wider impact of this request for information and the potential unintended consequences if may trigger.

The Uganda Law Society (ULS) also released a statement, in which they said ” all financial institutions and non-bank financial institutions are under a constitutional duty to ensure that no person interferes with their client’s privacy, in this case, divulging information pertaining to private property held on the respective accounts.”

FULL STATEMENT

Apr i l 10,2018

BRIEFING ON CABINET DECISIONS TAKEN DURING THE CABINET MEETING HELD ON MONDAY 9TH APRIL,2018 AT
STATE HOUSE ENTEBBE

Cabinet sat yesterday 9 th April 2018 at Entebbe State House under the chairmanship of H.E Yoweri Kaguta Museveni and took the
following decisions;

1. Approved the Landlord-Tenant Bill , 2018
2.  Approved the Road map for the commercialization of the Kiira Electronic Vehicle ProjecT

3. Cabinet further discussed and noted the concerns that have been expressed by various stakeholders and the public regarding the demand by the Uganda Revenue Authority (URA) to access the personal accounts of all clients of Commercial Banks.

Cabinet discussed the matter and with guidance of the attorney General ,recognized that while URA has the Legal mandate to access any person’s bank account for purposes of tax audit and assessment, it should not be a blanket and general application to all people including those who are complying well and paying their taxes.

URA should target accounts of individuals who are a subject of their tax investigation as has been the practice. URA was also advised to work and coordinate with the Financial Intelligence Authority -another government statutory body mandated to monitor all financial inflows without having to interfere with the business of banks.

The Minister of finance was accordingly directed to advise URA to drop its intentions of demanding for omnibus disclosure of people’s accounts from banks as this would cause unnecessary litigations and some turbulence in the banking sector and thus affect the economy .

Frank K. Tumwebaze MINISTER OF ICT & NATIONAL GUIDANCE CABINET SPOKESPERSON