Archive for month: October, 2019

Nairobi, Kenya: Uganda Revenue Authority Commissioner General Doris Akol has appealed to tax bodies across the region to cooperate in devising ways of ensuring that virtual foreign firms pay their fair share of taxes, arguing that it was not fair for these firms to make so much money from local economies without paying tax.

Akol, who was speaking at the 7th Pan African Conference on Illicit Financial Flows in the Kenyan Capital, Nairobi last week, noted that enforcing tax compliance of these companies was difficult because tax authorities are still trying to define where taxable value is added in the digital economy.

“It is difficult to identify who is the creator of the value, or who is its beneficiary. This is where we need to draw lines – deciding the creator of value from its beneficiary and who of the tow should be taxed,” she said.

Akol, however, argued that African tax bodies would no longer tolerate the excuse of the absence of permanent residence of these companies as a reprieve from tax.

“We need to move beyond what we know and start thinking about identifying new parameters if we are to tax digital companies operating in our countries. This means that we must start taking data seriously and harnessing it for that purpose,” she said.

The conference organized under the theme; “Taxing Intangibles, Financial Technology (FinTech) and the Digitalised Economy” sought to explore emerging economic trends and opportunities for domestic revenue mobilization in Africa, and drew close to 1,000 delegates over the course of 3 days.

Giving the example of companies like Uber, Amazon, and Facebook, the URA boss said “You find that payments are being paid in servers in Thailand, and goods dropped by drones in South Africa. We need to think fast on how best to handle these new dynamics in global transactions.”

Re-echoing Akol’s remarks, Jane Nalunga, the Director for South and Eastern Africa Trade Information and Negotiation Institute (SEATINI) Uganda country office also noted that with the globalization and digitization of business processes, tax administration was becoming ever more difficult, and that tax bodies need to cooperate to cope.

“There has always been tax evasion and tax avoidance, but the situation is getting worse with the advent of the digital economy. Now it’s a continental emergency and we must get together as a continent to build capacity to plug the leakages,” she said.

In 2016, a committee led by former South African President Thabo Mbeki found that Africa loses approximately $50billion in illicit financial flows from the continent, largely through tax evasion and avoidance in form of transfer pricing, use of tax havens and off-shore banking. The same committee estimated that the continent could have lost nearly $1trillion dollars in such illicit financial flows, over the last 50 years.

“Unless we address this ‘bleeding’ as a continent, we shall remain stuck,” said Alvin Musioma, the Executive Director Tax Justice Network Africa(TJNA).

However, Logan Wort, the Executive Secretary of African Tax Administration Forum (ATAF) warned participants against the rush to tax the digital economy, noting that crippling taxes risked stifling its growth, yet it portends immense opportunities for the continent.

In July 2018, the Government of Uganda instituted a tax on over the top services, by which each person was required to pay shs.200 per day to access platforms like Whatsapp, Facebook, and Twitter.

However, three months after the introduction of the tax, the Communications regulator Uganda Communications Commission noted that not only had the government failed to hit its revenue targets from the tax, the tax had also led to a reduction in Uganda’s internet users by nearly 3million people.

“We need to think perhaps how African Governments can charge VAT or withholding tax on parent companies of these services like Uber, Facebook, and the like,” says Logan.

He noted that while Africa is represented by about 24 countries on the (OECD), they hardly say anything when there. “The question is, as a continent, what is the tax margin that we are capable of collecting from this emerging global industry,” he asked. “There is a need to purposefully regulate digitalization so that we enable domestic businesses to compete with international companies,” he added.

More about PAC

The Pan African Conference on Illicit Financial flows(IFFs) and Taxation is an annual event that brings together key stakeholders involved in efforts to curb IFFs and enhance domestic resource mobilization in Africa. The platform draws together actors from governments, civil society, international organizations, legislators, media, academia, and national campaigners to take stock of the current state of IFFs’ in Africa as well as progress made through global, regional and country-level initiatives to combat them.

This year’s conference was jointly organized by the African Tax Administration Forum, the United Nations Economic Commission for Africa and the Pan African Lawyers Union. Others are The African Forum and Network on Debt and Development, Financial Transparency Coalition, Global Alliance for Tax Justice, Action Aid, Oxfam, Coalition for Dialogue on Africa and Trust Africa.

The post African Tax Bodies Struggling to Tax the Digital Economy appeared first on The Cooperator News.

ARUA. The police of Arua have arrested a man for conning more than shs.2m from 15 savings and credit cooperative organization (SACCO) groups in River Oli Division, Arua Municipality.

Brahan Sabir, a resident of Tanganyika ward in River Oli Division was arrested on Monday following complaints from the affected SACCO group members.

The SACCOs allege that Sabir duped them to surrender to him shs150,000 each, with a promise of helping them get shs.30m each, which he said was part of shs.600m President Yoweri Museveni recently handed over to Jackson Atima, a renowned businessman in Arua town at State House, Entebbe.

Salita Dawa, a member of Obolokofuku East SACCO group said Sabir approached them on September 24, 2019 claiming that the President had given Atima shs.600m to be given out to SACCO groups from cell to cell in Arua Municipality.

According to Annet Amaguru, another victim from Oli D United women SACCO, Sabir told them that he went along with Atima to meet President Museveni who handed over to them shs.600m.

“We then asked him about the requirements for a SACCO to benefit from the money, and he told us that he needed shs.150, 000 from each of us(SACCOs) to qualify for the shs.30m support from the President. That’s how we quickly mobilized the money and gave him,” Dawa told theCooperator.

“The promise was that we would receive the money(shs.30million) two days after we met the condition (each SACCO parting with Shs. 150,000),” Salita said.

Things were however not to go as agreed. Dawa told theCooperator that after giving Sabir the money, he immediately got out of reach, prompting them to call Atima – the alleged recipient of Shs.600m from President Museveni on behalf of the SACCOs.

But when contacted, Atima frantically denied ever being involved with Sabir or any such project, saying that he had not even had a formal meeting with President Museveni this year. He called Sabir’s claims “a total lie.”

“That is when we came to police to report the matter that led to his arrest,” Dawa added.

Davis Lusamba, the officer in charge of the Criminal Investigations Department at Arua Central Police Station (CPS) confirmed Sabir’s arrest and said police is still assembling evidence by merging all the complainants’ files to build a strong case against the suspect.

“We received several complaints from the affected SACCO groups and I’m now recording all the statements of the complainants before charging Sabir,” he said.

He encouraged all those who may have equally been conned by Sabir but were yet to report, to come to Arua Central Police Station to also record their statements against him.

When theCooperator contacted Atima, he confirmed the developments but remained consistent he was not in any way involved with Sabir. “In any case, I have been so resourceful to the party (NRM) in Arua Municipality sometimes using my personal money to fund party activities. Why would I then ask for money from these SACCOs first in order to get support from President Museveni if indeed he had given it?” Atima asked.

He said Sabir’s decision to con the SACCOs was criminal, for which he must face the full force of the law.

The post Man Arrested for Defrauding SACCOs in Museveni’s Name appeared first on The Cooperator News.

Coffee farmers have asked the government to carry out extensive consultation and educate them about the National Coffee Bill that is currently before parliament.

Speaking at the celebration to mark the international coffee day held at Ankole Coffee Producers Cooperative Union grounds in Kabwohe on Friday, the coffee farmers said they are confused by the content of the Bill and do not understand its intentions.

In April this year, the government tabled before parliament the National Coffee Bill 2018, for first reading, before it was referred to the House’s committee on agriculture for scrutiny.

In the Bill, the government through Uganda Coffee Development Authority intends to regulate the coffee industry by registering all coffee farmers in the country, license coffee farmers and also undertake research activities.

The Bill also seeks to repeal and replace the Uganda Coffee Development Authority Act, Cap.325 that was passed in 1994, provide for the registration of nursery operators, coffee farmer organisations, cooperatives, and coffee value chain actors and the issuance of licenses.

Julius Kamusiime, a coffee farmer from Ntungamo district asked the government to educate farmers about proposals contained in the Bill and explain the intention of the Bill to farmers before parliament considers it.

Hassan Baguma, another coffee farmer, said most farmers are illiterate and cannot interpret the Bill on their own. According to Baguma, there is a need for wide consultations by Parliament on the Bill before passing it to law.

Meanwhile, a section of farmer cooperatives has welcomed the proposal in the Bill to register coffee farmers saying it would go a long way in streamlining activities of the sector.

“The registration of farmers is a good development and should be embraced by the locals,” said John Nuwagaba, the general manager of Ankole Coffee Producers Cooperative Union.

He called on farmer’s association to educate their members “on the importance of organised and planned farming.”

The Union’s chairman Jonath Tweyambe, said the union has been carrying out registration of their members and this has helped them plan for inputs and effectively carry out technical services such as field visits.

Speaking at the function on Friday, Agriculture Minister Vincent Bamulangaki Sempijja announced that the government will soon embark on educating farmers about the National Coffee Bill, 2018 “so that they are not discouraged from coffee farming.”

He dispelled the rumour that the Bill aims at introducing new taxes in the sector.

The post The Coffee Bill: Farmers Call for Consultation appeared first on The Cooperator News.