The role of the Uganda Revenue Authority board of directors came into sharp focus in Parliament on Monday, with the board chair openly disagreeing with the tax body’s commissioner general (CG).
While URA board chair Simon Kagugube thought he should have known about about President Museveni’s Shs 6 billion bonus payment to 42 public servants, CG Doris Akol argued that the board could not police the implementation of the URA budget after approving it. Museveni authorised the bonus or “presidential handshake” to the officials after they helped government win a tax arbitration case against Heritage Oil and Gas.
The URA officials were on Monday appearing for the second time before Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (Cosase), which is investigating the legality of the bonus.
Board chair Kagugube, also the Centenary bank executive director, said the board “did not play any role in this payment”. He told the committee, chaired by Bugweri MP Abdu Katuntu, that he first learned of the matter from the [news] papers.
HARD TIME
As the committee hearing got heated, the difference between the two URA teams was palpable. During the lunch break, Kagugube and his team seemed at ease interacting with MPs, but Akol and her team remained glued to their seats, occasionally exchanging ideas.
At some point, Ali Ssekatawa, the URA litigation commissioner, was overheard saying that Katuntu had been unfair to them. Kagugube suggested his board was trying to understand the non-budgeted-for bonus payment: “We did not know that, that had happened until last Friday; we were also wondering how that could have happened. Like you MPs we are trying to understand how it happened…and when we asked questions, that is when all this documentation was availed [to the board].”
Under the URA Act, the board has to approve the tax body’s budget and expenditures as well as performance work plans in addition to other supervisory roles.
Kagugube told MPs that the board did not allocate any money for the bonus payment and didn’t authorise the reallocation of money from any of the budgeted-for items to cater for the “handshake.”
“The matter of this payment was not brought to the board directly or otherwise, but I have seen a letter from the ministry of finance authorising the commissioner general of URA to use certain funds and pay, [further] telling [Akol] that this money will be replenished through supplementary funding,” Kagugube said.
The said letter was written by the ministry of finance permanent Secretary and Secretary to the Treasury, Keith Muhakanizi, himself a beneficiary.
Muhakanizi’s letter was a response to the one Akol wrote in December 2015 asking him to appoint her as the accounting officer for the bonus payments.
Muhakanizi first asked Akol to seek permission from the minister of finance to reallocate money from the tax refunds budget. The money was later drawn from URA’s expenditure budget of the current financial year (2016/17).
In her testimony, Akol admitted that she did not get the minister’s authorisation. She said it became untenable because at the time the budget ceiling had been reached and no reallocation could be made.
IRREGULAR
“As the board which authorises the budget, we find it irregular that money that was not authorised in the budget is paid out without our knowledge,” Kagugube said.
But Akol told MPs that his board was not required to implement the budget.
“Once the board has approved the budget, its implementation is the responsibility of the commissioner general under Section 9 of the URA Act and Public Finance Management Act [PFMA]. With instructions from [Muhakanizi], the money was paid out, it was not a reallocation. There was no need for the board’s approval at that point because the board is not required to approve allocations neither under the URA Act nor PFMA,” Akol said.
She further said that since the transaction did not relate to URA activities, it was not necessary for her to inform the board because it did not have any role to play.
She also disagreed with Kagugube’s assertion that the payment was irregular. She said the board got to know about the handshake at the right time.
She said last week was the time management was required to furnish the board with the half year report. The monies were paid out in July 2016, one year after both Akol and Kagugube were appointed to their respective positions.
sadabkk@observer.ug