Finance

Finance (388)

Meera Investments Wants Finance Minister To Suspend Tax Amendment Bills 2020 Over Coronavirus

Meera Investments through their lawyers have Kampala Associated Advocates have written to Finance Minister, Matia Kasajia objecting some of the proposed amendments in the Tax Amendment bills-2020 which is before a committee of parliament.

According to Eagle Online, Meera Investments which is the top taxpayer for the rental category in their letter to the minister said the bill will have an adverse effect on many businesses given that the entire world will be resurrected from the effects of Coronavirus.

Government has introduced the Tax Amendment Bills 2020 and now before parliament with the hope of filling that taxation gaps in the budget. However, the bill is facing resistance from real estate developers and owners given the proposals contained in the bill.

“During the current lockdown, we were made aware of the tabling of the 2020 Tax Amendment Bills. We have had consultations with our tax lawyers, Kampala Associated Advocates, and we write to inform you that some of the bills will have an adverse effect on many of our businesses and we seek your indulgence to prevent adversity. Below are the amendments that we humbly propose you further scrutinize and change based on areas of speciality” reads part of the letter from KAA.

The proposed amendment is that an “owner of more than one commercial building shall account for the tax on each building separately and shall not claim input of incomplete buildings.

However, Meera Investments says many of them in the real estate industry run their businesses through companies and therefore, one company will have may be five to fifty buildings. Under the proposed amendment, it would mean that for each of the fifty buildings one must account for the tax separately. This creates the following complications:

“It would mean that if I have ten acres on plot 41 Kampala Road and on them I have ten buildings, I have to account for each building separately. This means that I must now demarcate between buildings one to ten and each must have its own tax identification number (TIN). The reason that each must have its own TIN is because I must account for the tax separately.

The effect of this is that at the end of the day, I shall have one company with ten to fifty TIN numbers. Worse still, this also means that I shall have one company with ten to fifty different invoices for the same project. This makes accounting difficult and will create confusion among the real estate companies. The company would also have to obtain various tax clearance certificates for each of the buildings. This would be outrageous because one company would have over 50 tax clearance certificates”.

SSOURCE: Eagle Online (click for full story)

Museveni Finally Replaces Scandal Burdened Kasekende

Any chances of Dr Louis Kasekende returning to Bank of Uganda in the capacity of deputy governor have been flushed down the gutter after President Yoweri Museveni announced that he had appointed Dr Michael Atingi-Ego as the new deputy governor subject to parliament's approval.

The president also appointed John Musinguzi Rujoki as the new Commissioner General(CG) of Uganda Revenue Authority  (URA). Rujoki replaces Doris Akol, who has spent five years in the CG job, having replaced Allen Kagina in 2014.

“By virtue of powers granted to me by the Constitution, I have appointed Mr John Musinguzi Rujoki as the new Commissioner General of URA This appointment takes immediate effect. I have also appointed Dr Michael Atingi-Ego as the new Deputy Governor, Bank of Uganda. I have forwarded his name to Parliament for vetting,” the president said in a brief message.

The deputy governor job fell vacant upon expiry of his contract early this year. Despite frantically seeking the president’s audience in an effort to be reappointed, Kasekende was unsuccessful thanks to the scandals hanging under his name at the central bank.

Kasekende’s name and the wrong key decisions he made were prominent when parliament was investigating the central bank for irregularly selling seven commercial banks, the latest being Crane Bank.

Parliament heard that Kasekende and former executive director in charge of supervision at Bank of Uganda Justine Bagyenda sold Crane Bank to dfcu Bank via a phone call breaking all legal procedures involved for such a deal to happen.

The Inspectorate of Government was also investigating Kasekende for not declaring all of his wealth and the manner in which he acquired all the riches registered to his name directly or through accomplices.

And while the president awaits parliament to approve his appointments, Dr Adam Mugume was appointed by Bank of Uganda board to carry out the duties of deputy governor in an acting capacity.

Dr Atingi-Ego, according to Watchdog News, is a seasoned economic policy official who obtained his first degree from Makerere University and later proceeded for postgraduate studies in the United Kingdom where he got a master’s degree from the Cardiff Business School, University of Wales and a PhD from Liverpool University.

He started his career at the Bank of Uganda rising through the ranks to become the Executive Director, Research. In 2008 he took up an assignment with the International Monetary Fund (IMF) as Deputy Director of the African Department (AFR).

Centre For Budget & Tax Policy Has Suggested These Fiscal Measures To Help Govt During COVID-19

Centre for Budget and Tax Policy (CBTP) has suggested to President Yoweri Museveni ‘bold and drastic fiscal measures’ that when implemented will stabilize the current disruptions that have been caused by coronavirus disease (COVID-19).

These measures by Centre for Budget and Tax Policy will according to a letter from the NGO’s executive director Patrick Katabazi to President Museveni and copied to the Prime Minister and minister of finance will go a long way in setting a firm foundation for future economic recovery. 

“It is therefore paramount that the measures being undertaken currently to avert the spread of the infection are matched with social protection measures to cushion the population through this period by smoothening consumption patterns among the poor and vulnerable,” Katabazi wrote to the president.

And with the biggest working population in the country not being able to go to work because of the directives by the president, Katabazi notes that curtailing this labour supply has dire consequences on households. He said that the drastic fiscal measures they are proposing will support both poor and non-poor during this period.

“These unprecedented measures are necessary to stabilize the current disruptions that have been occasioned by the impact of the COVID-19. They may seem radical but we implore the government to look at them critically and either adopt them or improve them,” he added.

To begin with, Centre for Budget and Tax Policy wants the government to improve the Senior Citizens Grants programme to cover older people from the age 60 years something that will increase the number of beneficiaries from 200, 000 to 1.2m people in rural areas to 300, 000 urban centres. Also, the monthly money paid should increase from Shs25, 000 to Shs50, 000.

By targeting this population, which is 2m, the government will be directly supporting about 10m Ugandans indirectly given that an average household in Uganda has about 5 people, the NGO said, adding that this intervention requires additional funding of Shs257.54bn for at least 4 months. The programme currently costs a total of Shs142.46bn

The NGO wants public servants earning less than Shs500, 000 like teachers, nurses, police officers among others to be given a top-up of at least Shs100, 000. This will cover about 150, 000 people at a cost of Shs45bn. A similar approach according to the NGO should be extended to the formal private sector where workers getting less than 1m are also topped up with Shs100, 000 because they pay PAYE.

Also, it is suggested that people in the informal sector like boda boda riders supported with an income stimulus to avert income disruptions they are facing. And for that needs to liaise with landlords to reduce the pressure on tenants during this period.  

And in recognition of people directly battling the virus in the country like medical workers, security guards and journalists, the think tank says special consideration should be made in form of allowances and insurance cover to the dedicated professionals on the COVID-19 frontline.

Centre for Budget and Tax Policy recommends that government pays its domestic arrears to businesses it owes money and for it to renegotiate with creditors in an effort to restructure the country's public debt portfolio with a view of rescheduling repayment timelines.

The advocacy group is also in support of government releasing payment for pensioners in a timely manner as well a designing a plan for clearing area.

 "The senior citizens are not only vulnerable economically but also highly susceptible to having adverse effects when infected by the virus," it said.

The NGO is of the view that government suspends non-critical projects during this period and also shut down non-essential government business like workshops, traveling abroad, field trips and consumables to save.

Mugume Appointed BoU Deputy Governor Replacing Kasekende

Adam Mugume, who has previously worked as Director of Research at Bank of Uganda, has been appointed by the board of directors Bank of Uganda chaired by governor Emmanuel Tumusiime Mutebile as the deputy governor.

Mugume will not assume the responsibilities of the number two at the country’s central bank. The position was previously held by Dr. Louis Kasekende whose last days the bank was marred by corruption scandals.

“In exercise of the duties and powers of the board under section 10 of the Bank of Uganda Act (Chapter 51), the Board Members of the Bank of Uganda at a special meeting held on March 27, 2020, unanimously resolved to designate Dr Adam Mugume to perform the executive functions of the office of the Deputy Governor until a substantive deputy governor is appointed,” a message from the board said.

 

 

Kisaame Takes Over As URA Chairperson After Troubled DFCU Bank Exit

After failing DFCU Bank, a section of the public is uncomfortable with the appointment of Juma Kisaame as the new Uganda Revenue Authority board chairperson.

Kisaame who was ousted out of DFCU Bank February of 2019 takes over from Simon Kagugube who passed on early this year. “We look forward to leading Uganda’s domestic revenue mobilization agenda under his capable leadership,” URA management said in a statement.

However, going by the manner in which Kisaame managed DFCU bank in his last years of tenure, economic commentators are cagey saying that a man with dubious record like Kisaame cannot be trusted to give direction to a tax body like URA.

“We all know the mess Kisaame made and left at DFCU Bank. His morality has been crushed alongside the scandals he led the bank into. He mismanaged the Crane Bank deal and it is now haunting the bank. You just never know what he will lead URA into,” Constant Odhiambo, a tax expert at Real Financial Agency said.

While at DFCU Bank, Kisaame is said to have irregularly brokered the deal to acquire Crane Bank with former Bank off Uganda executive director supervision Justine Bagyenda. A parliamentary inquiry heard that the deal was deal over a phone call between the two.

The Crane Bank deal sparked a series of legal battles that are said to have scared off the banks shareholders like Britain’s Commonwealth Development Corporation (CDC) and others that quit the bank. Other top officials also quit the bank.

 

DFCU Bank Dragged To Police For Paying Sh77m To Wrong Recipient

Police’s Criminal Investigations Department has summoned the managing director of DFCU bank, Mr Mathias Katamba and the branch manager of Kabale, Mr Morgan Mutesasira after a woman reported the theft of over Sh70m from an account belonging to her late father for which she was a signatory.

According to Watchdog, Ms Grace Nyakaishikyi Kamuhanda accuses DFCU officials of conniving with a one Florence Kamuhanga to steal her father’s savings amounting to Sh77,122,000, a case brought to the attention of DFCU management but have done nothing about the matter three years down the road.

Ms Kamuhanda is the daughter of the late Mzee Kamuhanda John Wycliffe with account number 01983001000395 in DFCU bank had sh77,122,000 at the time of his death on December 3 2017. However, the bank paid a non-signatory to the account all the money on February 2, 2018, something Grace says could not have happened without an insider assisting in the process.

Ms Kamuhanda wrote to CID boss on February 10, 2020, asking that her file be handled by her office to bring DFCU and its managers to book after it emerged that she has not received justice since 2018 when she first reported the complaint.

Through her lawyers, Twikirize and Co. Advocates Grace, says her late father died but his money amounting to Sh77,122,000 was transferred from his account on February 2, 2018, without her authorization to Ms Florence Tumwijukye who was not a signatory to the account.

The complainant wants DFCU to force Florence to pay back the money including Sh15 million as lawyers’ fees.

 

Whistleblower Calls For Investigation Into Kasekende Overseas Undeclared Wealth

A whistleblower has called on the Inspectorate of Government (IG) to investigate former Bank of Uganda deputy governor Dr. Louis Kasekende for failing to declare some of his local and overseas bank accounts and properties.

The complaint letter received by the IG titled CONFIDENTIAL NOTES, CORRUPTION AGAINST FORMER DEPUTY GOVERNOR LOUIS KASEKENDE, the whistleblower accuses Kasekede of failing to declare his wealth as required by the Leadership Code Act 2002.

“In accordance with the Leadership Code Act 2002, all public servants and leaders are required to declare their wealth to the IGG, but Kasekende didn’t declare his wealth.”

“He has acquired a lot of money and property in Luzira, Bugolobi, Buloba along Mityana road, and Naguru and evidence is attached to this effect” the letter reads in part.

The unnamed whistleblower accuses Kasekende of accumulating wealth beyond his known salary of Shs45m and allowances of Shs13m means. The whistleblower reveals that Kasekende operates a wealthy bank account in a Zambian bank.

“Kasekende and wife own other properties in the United Kingdom which the IGG needs to investigate and these property evidence is attached. Many witnesses are ready to give evidence to that effect as long as they are protected by your office, the whistleblower wrote.

As part of the whistleblower's evidence attachment, the whistleblower said Kasekende has a woman he uses called Agelah Nasaali based in Zambia.

“She has a company dealing in mining called KASE-NASA Mining Limited, Kasekende has 60 per cent. It has account number 600123445001 in Cavmont Bank Limited (CBL). Evidence will be given to investigator at the right time,” the whistleblower said.

The whistleblower who asks for protection from the IGG says Kasekende has two houses in Nagulu, Katearemwa road, and another one near General Moses Ali's residence, a house and a farm in Buloba on Mityana road, houses in Luzira, and money in KCB Bank in the names of Kasekende Paul but monitored by Kasekende.

 

Parliament Wants Deputy Governor Job Quickly Filled After Kasekende Departure

The minister of Finance Matia Kasaijja has been summoned to appear before Parliament Thursday next week to explain when they have not appointed a new deputy governor of Bank of Uganda.

The Speaker issued the directive on Thursday in response to a complaint raised by MP Michael Mawanda (Igara East) who said that work at the central bank has been paralysed since the office of the deputy governor has not been filled ever since Dr. Louis Kasekende left after the expiry of his contract.

“The office of Deputy Governor, Bank of Uganda has been quite vacant for quite some time and he is the vice chairperson of the board. This is a strategic institution and I fear we may face some challenges if a position isn’t filled in the shortest time. As you know, I have been processing a bill and I asked some information but nobody was committal to answer questions,” Mawanda told Parliament.

In response, Speaker of Parliament Rebeca Kadaga said, the Minister of Finance should come and brief Parliament on which the position will be filled.

“The Minister of Finance should come and update us about the deputy governor despite resolutions to separate the management board positions, they haven’t happened but they are still bound in the old law. The minister for finance should come back next week and brief the house.”

Former Bank of Uganda deputy governor Louis Kasekende contract expired recently and President Yoweri Museveni refused to renew his contract. Kasekende is one of the top former officials of Bank of Uganda who contributed to fraudulent sale of seven commercial banks.

World Bank Distances Itself From 'Racist' Director Kabagambe

The World Bank has spoken out on against a tweet from Anne Kabagambe, the executive director of the global bank for Africa Group, which some said had racist connotations directed at Ugandan businessman Sudhir Ruparelia.

In a tweet this week, Kabagambe, accused Sudhir of engineering the exit of former deputy governor of Bank of Uganda, Dr Louis Kasekende.

The tweet caused a storm because she referred to Sudhir as “That Indian,” which was deemed racist by a number of social media commentators. Kabagambe later claimed her twitter handle had been hacked. It has since been taken down.

Sudhir was born in Kasese, in the western part of the country before moving to Kampala. He is considered to be one of the wealthiest Ugandans.

In a statement issued by David Theis, the spokesperson for the president of the World, the bank distanced itself from the tweet, saying board members report to their central or finance ministries.

“Management does not have any purview over Executive Directors, as they are not staff,” Theis said.

Kabagambe, directly supervises works in constituency countries such as Botswana, Burundi, Eritrea, Eswatini, Ethiopia, The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Rwanda, Seychelles, Sierra Leone, Somalia, South Sudan, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

SOURCE: Nile Post

MPs Say Chronic BoU Recapitalization Distressing Economy

A section of MPs have protested what they call chronic capitalization of Bank of Uganda (BoU), arguing that the practice is greatly affecting funding in crucial sectors of the economy, Business Focus reports.

This is contained in the minority report on the 2020/2021 FY National Budget Framework Paper authored by Butambala County MP, Muwanga Kivumbi and Dokolo Woman MP, Cecilia Ogwal, who raised queries on the recapitalization of Bank of Uganda.

It should be noted that as of  2019/2020 FY, Government has recapitalized Bank of Uganda to the tune of Shs1.160.2Trn with Parliament having approved another proposal to recapitalize the Central Bank to a tune of Shs481.7bn in 2020/2021 FY, which has brought the total amount for the recapitalization of Bank of Uganda to Shs1.641Trn.

According to documents tabled before the Committee, in 2012/2013 Government injected Shs410.02bn, followed by Shs250bn in 2014/2015 and in 2015/2016, BoU received another capital injection of Shs200Bn.

In 2016/2017, the Central Bank was recapitalized with Shs100bn, while in 2019/2020, the Bank received a capital injection of Shs200bn.

The duo noted that Government is authorized under Section 14(4) of the Bank of Uganda Act (2000) and Section 36 of the Public Finance and Management Act 20l5 as amended to issue securities for the recapitalization of the Bank of Uganda where the capital of the Bank is impaired.

Bank of Uganda informed Parliament’s Budget Committee that as at June 2019, BoU capital was impaired to the tune of Shs681.7bn and that in October 2019, BoU was partly recapitalized with securities worth Shs200bn, leaving a deficit of Shs481.7bn which is required in FY2020/2021.

Although the majority of the Committee members agreed to recapitalize the Central Bank again, the opinion was protested by MPs Muwanga and Ogwal who argued in their report, “This chronic continuous recapitalization of the Bank of Uganda is denying valuable resources for critical government programmes like Health, Education, and Industrialization.”

The two made several recommendations including calling on the Central Bank to utilize savings on Government accounts, drawdown of the General Reserve Fund, deposit auctions and Repurchase agreements.

SOURCE: Business Focus

Subscribe to this RSS feed

Kampala