URA Offices In Mbale Closed In Operation Against Tax Defaulters

6257 Views Mbale, Eastern Region, Uganda

In short
The Eastern Regional offices of Uganda Revenue Authority –URA were on Tuesday morning closed for several hours together with three banks operating in Mbale town in an operation to crack down on defaulters of property rates tax.

The Eastern Regional offices of Uganda Revenue Authority –URA were on Tuesday morning closed for several hours together with three banks operating in Mbale town in an operation to crack down on defaulters of property rates tax.

The banks that include Crane Bank, Standard Chartered and Trust Finance Bank as well as National Insurance Corporation (NIC) were also closed.

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 more than one million shillings in unpaid tax arrears from Hussein Masaba, the proprietor of the building housing URA and Trust Finance Bank offices.

He said NIC had 460,000 shillings in tax arrears which they cleared two hours later before they were reopened.

Hajji Musa said Under Bridge, an Indian firm that owns the building housing Standard Chartered Bank, owed the council more than one million shillings in unpaid tax arrears. Meanwhile the management of Crane Bank had to produce documents as proof of their payment one hour after the closure before they were re-opened.

Most of the premises that were closed at about 8:00am were re-opened at around 11:00am after their owners committed in writing to the Industrial Division and Mbale Municipal Councils to pay their tax arrears before the end of business today.

Attempts to get a comment from the local management of the banks that were closed were futile as they all referred URN to their headquarters in Kampala.

Hajji Masa Musa warned that should they fail to adhere to their commitment and clear their arrears, the crack-down team will not hesitate to close the premises until they clear-up with the council.

More than 20 shops had also been closed in the operation by mid-day on Tuesday.

On Monday, the operation closed down more than 50 shops including that for the retail dealer of Orange Uganda, a mobile telephone company.

Robert Wambete, the Industrial Division Senior Assistant town clerk, said they want to recover more than 2.5 billion shillings in unpaid taxes.

Meanwhile, Richard Mabala, the Municipality Principal Finance Officer, said they seek to recover about 2 billion shillings in unpaid property rates tax.

They all blame the mess to poor local revenue collection policy by the division and laxity on the part of some technocrats in the division. They said that they found out that some technocrats were conniving with the defaulters to fleece the two councils of revenue.

Property 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.