By Andrew Irumba
Kampala: Several ministry of finance officials under the Privatisation Unit are in hot soup after failing to account for a whooping Shs6.4 billion, which was meant for Pay As You Earn (PAYE) deductions from employees.
The financial anomaly was exposed in the Auditor General’s report, which is currently before the Public Accounts Committee (PAC), chaired by MP Nathan Nandala Mafabi.
In the report, Auditor General John Muwanga noted the escalating outstanding commitments under the Privatization and Utility Sector Reform Project (Operations Account) that has increased from Shs4.81 billion at close of the financial year 2016/2017 to Shs6.43 billion as at 30th June 2018.
Officials from the Privatization Unit on Thursday failed to explain to PAC the non-payment of salary-related taxes amounting to Shs6.4 billion, yet the money was deducted from employees’ salaries.
Led by Finance Ministry Under-Secretary Betty Kasimbazi, the officials and others appeared before PAC to answer to audit queries raised in the Auditor General’s report for June 2018.
Muwanga noted in his report that the bulk of the outstanding commitments relates to unpaid taxes in lieu of Pay As You Earn (PAYE) which increased from Shs3.42 billion to Shs6.02 billion, adding that the continued failure to pay salary related taxes could result in litigation and fines by the Uganda Revenue Authority (URA).
When tasked by Nandala to explain why PAYE is not remitted, Christopher Mugisha, a Senior Accountant in the Finance Ministry Privatization Unit attributed their failure on budget constraints. He said that salaries are paid partially hence the reason not to pay PAYE.
However, Mugisha’s response was queried by legislators including Kashari North MP Wilberforce Yaguma and Kalungu West MP Joseph Ssewungu, who said that PAYE is deducted at source whether salaries are partially paid. They were backed up by Nandala.
But Mugisha explained that they requested for funds to enable settle the liability. However, Nandala insisted that whenever salaries are paid whether partially, PAYE should be deducted automatically.
After failing to get a satisfactory explanation from the finance officials, the Committee directed them to present the payroll of its staff members on their next interface. Nandala also demanded for documents in regard to URA’s action on the matter.
According to the Income Tax Act, an employer has to deduct PAYE and remit it to URA, maintain employees’ records and account for the tax deducted on a monthly basis. The Act also tasks employers to declare total income from all sources including business income and failure to do so has severe legal implications.
