Cabinet has directed the Uganda Revenue Authority to drop the directive for commercial banks to avail the tax body with personal account details of all clients.
A Cabinet meeting chaired by President Yoweri Museveni, at State House on Monday April 9, directed that URA stick to following accounts of individuals who are subjects of their tax investigation as has been the practice.
“URA was also advised to work and coordinate with the Financial Intelligence Authority, another government statutory body mandated to monitor all financial in flows without having to interfere with the business of banks,” said Frank Tumwebaze, the Information minister, in a statement he issued on Monday .
Mr Tumwebaze revealed that Finance minister Matia Kasaija was directed to advise URA to drop its intentions of demanding for omnibus disclosure of people’s accounts from banks as this would cause unnecessary litigations and some turbulence in the banking sector and thus affect the economy.
According to Tumwebaze, the Cabinet was expressing concern by various stakeholders and the public regarding the demand by URA to access the personal accounts of all clients of commercial banks.
Last month, URA wrote to all commercial banks, asking them to provide information on all accounts holders.
A total of 30 commercial banks under their umbrella body Uganda Bankers Association protested the move and have instructed their lawyers to file a suit challenging URA.
In a statement issued by the association’s executive director Wilbrod Owor and the chairman Fabian Kasi, the body said it is currently in consultations with various line authorities, financial stake holders, URA and Bank of Uganda to address the matter.
The association instructed MMAKS advocates and A.F Mpanga Advocates to sue URA, challenging the request on grounds that it is unconstitutional.
Cabinet, with guidance of the Attorney General, recognized that URA has the legal mandate to access any person’s bank account for purposes of tax audit and assessment, but it should not be a blanket and general application to all people including those who are complying well and paying their taxes.
Lawyers back URA
Yusuf Nsibambi, a senior lawyer supports URA accessing people’s accounts, arguing that this will expose corrupt public servants.
Quoting the mandate of URA Act under Section 42, Nsibambi, a senior law lecturer at Makerere University also argued that the tax body is carrying out its mandate.
“Those who fear especially the public servants have billions of shillings on their accounts, whose source they can’t explain,” Nsibambi added.
He said if cabinet stopped URA from accessing the accounts, some Ugandans should file a public litigation case in courts, to allow URA, to embark on the move.