URA Demands Ushs 800m in Withholding Tax from Budaka

Budaka district local government and Uganda Revenue Authority are locked in a dispute over the payment of 800 million shillings in withholding tax.

Uganda Revenue Authority (URA) is demanding that the district pays the tax on income earned from public tenders. It says the debt was accrued over the past three years.

The Chief Administrative Officer of Budaka Elias Byamungu says the URA overestimated the tax debt. He says that his staff have scrutinized the accounts of the young district and has found that the unpaid withholding tax is about 279 million shillings.

Byamungu claims that in a meeting with URA in November last year, the tax body's lawyer said he concurred with argument presented.

John Babalanda, the Chief Financial Officer, says it is possible that URA double counted some figures by mistake. He also accuses it of demanding tax on non-refundable tender fees.

The acting Budaka LC5 chairman Martin Kisale has instructed the Chief Administrative Officer to engage a law firm or the Solicitor General's office to appeal the anomaly. He says that while the district may have some unpaid debt, the inflation of the figures cannot go unchallenged.

URA has not spoken to the media about this dispute. Sources within the Budaka local government say the district does not have the resources to pay the withholding tax.