7 More Banks Closed In Mbale As Landlords Default On Property Tax

3140 Views Mbale, Eastern Region, Uganda

In short
Seven more banks were closed in Mbale on Wednesday morning in an operation to crackdown on defaulters of property rates tax. They include DFCU, Housing Finance Bank, Barclays Bank and Diamond Trust Bank. Others are Global Trust Bank, UBA bank and Opportunity Bank.

Seven more banks were closed in Mbale on Wednesday morning in an operation to crackdown on defaulters of property rates tax.

They include DFCU, Housing Finance Bank, Barclays Bank and Diamond Trust Bank. Others are Global Trust Bank, UBA bank and Opportunity Bank.

The joint operation that kicked off on Monday is being conducted by the Mbale Municipal and Industrial Division councils. The police and the municipal law enforcement officers are manning the operation.

Hajji Masa Musa, the Industrial Division LC Three chairperson, told URN that the council is demanding from Bugisu Cooperative Union-BCU more than 50 million shillings in unpaid tax arrears. BCU is the owner of the buildings housing DFCU, Barclays, Housing Finance, Global Trust, UBA and Opportunity Bank.

He said the six banks were re-opened after more than two hours when BCU and Barclays bank paid 12 million shillings and 2.6 million shillings respectively. Musa said they have given BCU up to one week to clear up the balance of more than 35 million shillings or the banks will face closure until the debt has been cleared.

Mean while, he said Norlise Café, the propitiator of the building housing Diamond Trust Bank, owes the Council more than 3 million shillings in unpaid tax arrears dating back to two years. He said they however re-opened the bank after it paid 1.7 million shillings and committed to clear the balance in a week’s time.

On Tuesday, the operation also closed Crane Bank, Standard Chartered and Trust Finance banks as well as National Insurance Corporation (NIC) but were re-opened several hours after they paid the tax arrears owed to the Municipal Council by their landlords.

The Eastern Regional offices of Uganda Revenue Authority –URA were also closed in the crackdown on Tuesday before they was re-opened two hours later after the landlord of the building cleared the debt.

More than 70 major retail and wholesale shops operating in Mbale town have since been closed in the on-going operation that started on Monday this week.

Paul Omoko, the new Mbale Municipality Town Clerk said they are seeking to recover a total of more than 4 billion shillings in unpaid tax property tax arrears in the two councils of Mbale Municipal and Industrial Division.

Property rates taxes are levied by the local governments and the tax base is the ratable value of the property which takes into account the nature of the property concerned and value of improvements.

The tax rates are determined by the local authorities but a maximum of 2% is prescribed by law. The Property Tax Rates Act provides that 75 percent of the money collected is ploughed back to the community in terms of infrastructural development like rehabilitation of roads among other things.

 

About the author

Denis Olaka
Denis Olaka is the URN bureau chief for Lira, in northern Uganda. Apac and Otuke fall under his docket. Olaka has been a URN staff member since 2011.

Olaka started his journalism career in 2000 as a news reporter, anchor, and then editor for Radio Lira in Lira district. He was subsequently an editor with Lira's Radio Wa in 2004 and Gulu district's Mega FM.

He was also a freelance writer for the Daily Monitor and Red Pepper newspapers.

Olaka's journalism focuses on politics, health, agriculture and education. He does a lot of crime reporting too.