Cabinet has stopped Uganda Revenue Authority’s controversial directive that all commercial banks disclose to it all details of their customers.
The move follows outcry by the Uganda Bankers Association which threatened to take a case to the court on grounds that the directive threatened the principle of privacy of their customers.
URA last month issued a blanket order to all commercial banks to provide details of all their clients for the purpose of tax audit and assessment.
However, this caused fear and panic in the banking sectors as commercial banks felt troubled that customers would take away their money in fear of being forced to suffer taxes.
However in the cabinet meeting that sat yesterday under the chairmanship of His Excellence President Yoweri Kaguta Museveni, the minister of Finance was accordingly directed URA to drop its intentions of demanding for omnibus disclosure of people’s account from banks as this would cause unnecessary litigation and some turbulence in the banking sector and thus affect the economy.
While addressing the press at Uganda Media Centre today, Minister of ICT and National Guidance Cabinet spokesperson Frank Tumwebaze said: “Cabinet discussed and noted the concerns that have been expressed by various stakeholders and the public regarding the URA directives to access personal accounts and under the guidance of Attorney General.
“We noticed that URA has the legal mandate to access a person’s bank account for the purpose of taxi audit and assessment. It should not be a blanket and general application to all people including those who are complying well and paying their taxes.”
According to Tumwebaze, URA should target accounts of individuals who are a subject of tax investigation as has been the practice. Also URA was advised by the cabinet to work and coordinate with the Financial Intelligence Authority (A government statutory body mandated to monitor all financial inflows) without having with other people‘s business of banks.
The UBA protest had gained support from a number of organisations including Uganda Law Society (ULS) which argued that URA’s request was unconstitutional.
Newly elected ULS President Simon Peter Kinobe argued that although URA have a legal duty to collect taxes from all people eligible, URA is also duty bound to uphold the constitution of Uganda (1995) (as amended).
“We are aware of the provision of the Tax Procedures Code Act, 2014 empowers the Commissioner to require any person to furnish her with any information for the purpose of administering any provision of any tax law. However, we are of a considered view that this provision should not be implemented at the expense of the constitutional right of privacy enshrined in article 27 of the constitution” said Kinobe.