A tax dispute between telecom giant MTN and the Uganda Revenue Authority, (URA), has hit a new high with the new leadership at the tax body having a second look at an earlier assessment of UGX 326,996,917,906 unpaid taxes.
Sources at URA have told this publication that the new leadership at URA is not satisfied with the manner in which a consent judgment was entered between MTN and URA to scale down the assessment to from 327bn to UGX 24,273,771,472 (24.2bn). The dispute arises out of a technical tax interpretation on whether the taxable value of excise duty on airtime was to be charged on usage or at the point of sale which was referred to the Tax Appeal Tribunal last year.
At the appeals hearing ,both MTN and URA undertook further reconciliation and agreed to reduce the tax liable to MTN at UGX 24,273,771,472, a figure which the new leadership at URA now says should be re-examined “ because it is not fair and appropriate “, according to a reliable source that declined to be named .
The new twist in the tax wrangles between MTN and URA comes at a time when it is reported that President Yoweri Museveni has called for a swift cleaning up at the URA due to alleged wide spread corruption, syndicates that have facilitated under declaration of taxes and out right tax evasion that has cost the country trillions of shillings over the years .
Already , several senior managers at URA have been forced to resign their positions while others are said to have fled the country . President Museveni has since directed that thorough investigations be instituted to establish the magnitude of the problem and have all those responsible officers arrested and prosecuted .
It is reported that many senior officers at URA own property in billions of shillings and cannot give a clear accountability where they got the money from . However, in a statement issued by MTN over the weekend ,the company said it was a “responsible and ethical corporate citizen” committed to meeting all its lawful obligations including all taxes that are properly assessed and are due and owing.
The statement further said that MTN was studying the Tax Appeals Tribunal ruling, taking advice on the implications and would make every effort to conclude the matter in a “fair, legal, and ethical manner.”
The Uganda Revenue Authority (URA) Board of Directors have made changes in the leadership of the tax body appointing Mr. Patrick Mukiibi to the powerful position of Commissioner of Domestic taxes replacing long serving Mr. Dicksons Kateshumbwa who resigned the position before his contract ended .
Kateshumbwa quit URA together with Mr. Henry Saka, Mr.Silajji Kanyesigye Baguma and Mr Samuel Kahima. Other leadership changes effected at URA include the appointment of Mr. Mathew Mugabi as Acting Commissioner Tax Investigations , Mr. James Kizza, Acting Commissioner Corporate Services and Mr. john Tinka Katungwesi who will be acting Assistant Commissioner Large Taxpayers office.
Mrs. Patience T. Rubagumya retained her position as Commissioner Legal Services and Board Affairs while ,Mr. Herbert Rusoka and Mr. Abel Kagumire kept their positions as Commissioner Internal Audit and Compliance and Acting Commissioner Customs , respectively .
The changes come two months after President Museveni sacked Ms. Doris Akol as the Commissioner General of URA and swiftly appointed Mr. john Musinguzi Rujoki to take over the leadership of the tax body which has been embroiled in controversies over poor revenue collections amid allegations of widespread corruption ,tax evasion and smuggling .
While appearing on the Capital Gang today morning , Mr. Keith Muhakanizi the Secretary to the Treasury and a Board Member at URA said that they took the decision to make management changes to improve the revenue collection performance levels . Ideally URA should be collecting between 15-16.5% of GDP in revenues but they are under performing at 13.5%, Muhakanizi complained .
