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More than 50,000 employers have been given a 30-day deadline to pay contributions
Kampala, Uganda | JULIUS BUSINGE | Uganda’s employers irrespective of the number of workers employed have only 30 days to register with the National Social Security Fund (NSSF) and remit social security contributions for their employees.
NSSF acting Managing Director, Patrick Ayota, told media in Kampala on March 28 that employers who will fail to comply with the directive to align with the amended National Social Security Fund (Amendment) Act that became operational in January 2022 will be penalized.
“Given that the law came into force a year ago, employers should have registered and started remitting social security contributions for their employees effective January 7, 2022. However, only 3,200 have registered with the Fund. We, therefore, call upon unregistered employers across the country to take advantage of the next 30 days to regularize their status with the Fund,” Ayota said.
He said employers that will fail to comply with the new directive will receive a 10% financial penalty on the amount that they are supposed to remit to the Fund monthly.
However, Geoffrey Sajjabi, the Fund’s chief commercial officer said, there will be room for employers to engage with the Fund to have an extension for remitting the contributions “for as long as they (employers) have genuine reasons.”
The new development is part of the employer registration drive that is being undertaken to operationalise the new provisions in the NSSF Act, as amended, specifically Sections 7 and 13 A that introduced mandatory contributions by all workers regardless of the size of the enterprise or the number of employees, and section 13A which introduced voluntary contributions.
The Fund is targeting to register 50,000 new employers and 1.2 million new members over the next five years.
Section 1(d) of the NSSF Act, as amended, defines an employer to include the government, a company registered or incorporated under the Companies Act, 2012, a partnership registered under the Partnership Act, of 2010, and a trustee incorporated under the Trustees Incorporation Act, Cap. 165.
The Act also includes a business registered under any other law for the time being in force governing the establishment of business entities, the governing body of an unincorporated association; and a manager or a subcontractor who provides employees for the principal contractor. All employers that fall within these categories should register with the Fund.
Ayota said it makes good business sense for an employer to fulfil their social security obligations because an NSSF clearance certificate is now becoming a requirement before any company can do business with the government or government agencies.
The Fund is establishing partnerships with all regulatory agencies of government to ensure that before any entity is given a license, they have a clearance certificate from NSSF that proves their registration and compliance with the NSSF Act.
ULS hails the new step
Uganda Law Society Chief Executive Officer, Moses Okwalinga Opolot said the new move is welcome. He said employers should register with the Fund to avoid financial penalties.
“In practice, the penalty for non-compliance with NSSF is very burdensome,” Opolot said.
For the legal fraternity, Opolot said, NSSF compliance is already a requirement by the Law Council before a practising certificate can be issued.
John Walugembe, the executive director of the Federation of Small and Medium Enterprises-Uganda urged members to take advantage of the opportunity provided by the Fund to register and avoid inconveniencies.
Currently, NSSF has assets worth over Shs17.8 trillion, invested in Fixed Income, Equities and Real Estate assets within the East Africa region. The Fund hopes to grow its assets to 20 trillion by 2025.
