Tunde Fowler of Nigeria is the Chairman of African Tax Administration Forum (ATAF)
Tax War: Uganda stops URA from accessing taxpayers’ bank information
Uganda President, Yowori Museveni, has stopped the Uganda Revenue Authority (URA) from accessing taxpayers’ information from banks, a local news source has said.
This is after the request, few days ago, by the URA for banks to release taxpayers’ information caused huge crisis in the country.
The URA requested banks to avail records of their clients, including the account name, Tax Identification Number, National Identification Number, address, telephone numbers and emails addresses. The tax body, quoting Section 42 of the Tax Procedure Code Act, also asked the banks to give it current balances on that account.
However, following protests by stakeholders including bankers and government officials, who said: “We feel it [Section 42] is an overreach of their [URA] mandate because by its nature, tax is supposed to be a voluntary disclosure but this request is reactionary in nature”, Museveni stopped the tax authority.
Sources said the President was furious when Finance Minister Matia Kasaija, sought Cabinet direction on how to proceed with the latest URA move, seeking confidential clients’ bank details.
The minister told a cabinet at State House Entebbe chaired by the President that the controversial URA decision had instigated what sources called, “unnecessary apprehension” in the country, and has since provoked angry response from respective banks, including their body- the Uganda Bankers Association.
“Mr Museveni questioned who authorised the URA Commissioner General, Ms Doris Akol, to demand clients’ information from the various banks without authorisation from Cabinet and who authorised Ms Akol to meddle into the operations of the commercial banks, the minister disowned the URA boss.
Mr Kasaija told Cabinet that as a political supervisor of URA, he was not consulted and that he had come to Cabinet to seek guidance”, The Monitor said.
Justice and Constitutional Affairs Minister, Maj Gen Kahinda Otafiire told Cabinet that some Ugandans had started withdrawing their cash from the banks and were keeping it under their beds.
Another female minister said the tax authority’s move would force Ugandans to open up bank accounts in foreign countries and hurt the economy in the process.
The ministers accused URA of invading peoples’ privacy before asking Ms Akol to back off. Mr Museveni described by sources as “very angry” wondered why URA would not focus on only the tax defaulters.
He also said such a move would scare away investors and disorganise the economy.
Cabinet also heard that prior to the disputed directive, URA had received a petition from a whistle-blower calling for investigations into claims that the Bank of Uganda’s director for banks supervision, Ms Justine Bagyenda, was keeping more than Shs7 billion on her bank accounts.
The ministers, however, asked URA to focus on suspected individuals but not all Ugandans.
They backed the President’s decision and tasked Mr Kasaija and Information and ICT minister Frank Tumwebaze to put the matter to rest.
The Cabinet outburst stems from a March 16 letter from URA’s commissioner of Domestic Taxes, Mr Henry Saka, asking all the commercial banks to provide information on account holders from January 1, 2016 to December 31, 2017.
The banks have since threatened to sue URA, saying the move is illegal.
Mr Tumwebaze declined to comment on the matter, saying: “There is a press conference tomorrow (today). He, however, remained coy on whether this matter will be one of the issues to communicate to the nation during the press conference.
Mr Kasaija also asked for more time to speak freely to us because he was in a meeting by press time.
When asked whether there were consultants with government before issuing a directive to banking institutions, Mr Vincent Suruma, the URA spokesperson, said he was not in position to speak about a matter discussed by Cabinet before getting a formal communication in that regard.
“I will make my comments after getting the communication from Cabinet. As of now, I don’t want to speculate,” Mr Suruma said.
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