The Uganda Revenue Authority (URA) has resolved to sell the assets of Buganda Kingdom’s struggling K2 Telecom despite the Kabaka’s phone company meeting its part of an agreement signed over tax arrears. About a month ago, URA closed down K2 offices on Muganzirwazza over tax arrears amounting to just Shs90m.
K2 Telecom agreed with URA on a payment plan to ensure the money is paid by the end of October 2018. To that effect, K2 Telecom, which has not been operational for six months due to an issue with its hosting company given that it is a mobile virtual network and owns no infrastructure of its own (just like Virgin Mobile in Europe) transferred Shs29m as per agreement reducing the debt to Shs61m. We have seen the payment receipt from URA with the numbers: PRN2180003955223 acknowledging receipt of payment from K2 Telecom.
However, information from URA’s Crested Towers office indicate that the issue wasn’t actually tax arrears because there are hundreds more companies with much more tax obligations that have been left to operate freely. Information reaching us is that it is much more bigger campaign to cripple Buganda Kingdom’s financial muscle.
Our sources say that URA Commissioner General, Doris Akol, has handed URA’s manager for Debt Collection Unit, Stanley Kabyemera the responsibility of closing down K2. “The Commissioner General has put me under enormous pressure. She wants K2 sold off yet they have already paid Shs29m as we agreed with them. She is asking me why I am not selling off their assets to recover the tax arrears. Everyday, I receiving a call from her about K2. This explains this impromptu meeting with you. On Monday July 2, prepare to start the process of selling off their assets,” Kabyemera informed his staff in a meeting on Friday at Crested Towers. “We are going to run an advert in the newspapers in the week and thereby close them. I don’t know what Akol’s interest is with K2 but she is determined to close it,” a URA staff who attended the meeting informed us.
This is a renegading on an agreement with K2. Sources say Akol won’t rest until she brings down Buganda Kingdom. “She wanted to close another Kabaka company over a tax dispute of just Shs17.5m. Many companies that have been indicated to owe the URA money haven’t been closed. They have not threatened to sell off their assets,” a URA source at Nakawa Headquarters said.
The move is surprising according to tax expert Joseph Kamugisha because URA owes K2 Telecom Shs90m in VAT returns. “Ideally URA and K2 would simply do a tax trade off because each acknowledges that they owe each other. However, URA insists that K2 first pays it Shs90m and then for it will consider paying it. I need to understand URA’s motive,” Kamugisha said.
According to the file seen by our reporter, URA acknowledges owing K2 Telecom Shs90,600,136. The file is marked LA01185713718.
It is not only URA that owes Buganda Kingdom and its associates money. The government of Uganda owes the Kingdom over Shs500 billion as a result of tax arrears, Muteesa House in London which it sold, and the Kampala Road plot which they (government) gave to Muslims illegally to build King Fahd Plaza among others. “Buganda and the government should not actually be at loggerheads over taxes. The government could actually offset their debt with tax payments for a company like K2 which is working out a plan to get back on air,” Maria Akello, an economist with Stanbic Bank said. “URA should be looking for ways to support businesses and promote job creation. A growing economy is good for them,” she added.
Doris Akol has also not learnt from Allen Kagina, her predecessor. Kagina succeeded a lot at URA because she understands how business works. She was never after closing businesses unless an agreement hadn’t been reached. “Kagina used to wave off taxes where a company was struggling and showed commitment in paying its tax obligations. She understood that she would get more taxes in a company that is open than one that is closed,” our URA source at Crested Towers said. “Our boss doesn’t understand that and we are actually collecting less taxes than we used to do because of her bogus methods of work,” the staff added.