Should members of Parliament, some of whom live large on taxpayers' money, make public the amount of tax they pay to government? Not in this lifetime, some say, writes JEFF MBANGA.
A month after The Observer sent emails to nearly all Uganda’s members of parliament to divulge how much taxes they pay to the Uganda Revenue Authority, in the newspaper’s attempt to raise the levels of transparency among the legislators and also widen the boundaries of tax disclosure, the response remains largely lukewarm.
Less than 10 out of the more than 300 members of Parliament we sent emails to, replied to our request to divulge their taxes, despite being reminded. Of the few that replied, one questioned why they were being unfairly targeted.
Many members of parliament own businesses. For example, legislators such as Abbas Agaba and Felix Okot Ogong each have a fleet of commercial buses, Abdu Katuntu owns a law firm, Chrysostom Muyingo has private schools, while Roland Mugume runs a pharmacy, just to mention a few.
It is widely believed that a substantial amount of money that some MPs earn from the House, and the perks they receive, is channeled towards their private businesses.
As a result, it then becomes vital that the members of parliament at least pay their fair share of taxes to the URA. The members of parliament are the most well-faciliated public servants outside the executive, with each earning about Shs 25 million ($6,940) a month.
While no law in Uganda requires the members to divulge their tax returns, the low response to our email is a key pointer to how difficult it is to hold many public officials, whose livelihood and social lifestyle are largely dependent on taxpayers’ funds, accountable to the people they represent in the House.
“It always hurts me when I meet people like you who only want to know about my financial status without knowing how I came here and how much did I spend,” Elizabeth Karungi, the woman member of Parliament for Kanungu district, replied to our email.
She added: “I appreciate your interest but it is paramount that you equally take interest in condemning the much financial expenses we face before the electorates vote us.”
Other legislators made their feelings against such a tax disclosure initiative quite clear. Sylvia Rwabwogo, the woman member of Parliament for Kabarole district, said she had “reservations on such records being available without lawful procedure to the public.”
She pointed out that she would not divulge such information unless the law required her to do. She said in any case “some people file wrong returns to evade tax.”
In early March, Finance Uncovered, a global network of journalists that mainly investigates illicit financial flows, launched a tax disclosure project in London to have mainly legislators in at least 20 countries, Uganda inclusive, reveal the amount of money they paid to their countries’ treasury.
The project, inspired by Pakistani journalist Umar Cheema, who single-handedly pushed for this type of disclosure in Pakistan, is quite ambitious. Only four countries in the world require their publicly elected officials to divulge their tax numbers. They are Norway, Sweden, Finland and Pakistan.
Nick Mathiason, the director of Finance Uncovered, says it is of public interest that elected officials made clear their sources of income and how much taxes they paid.
“There is, in our view, a clear and substantial public interest in elected representatives fully disclosing their sources of income and their tax payments. This is because elected representatives are paid by taxpayers to make decisions on taxation and on how money is spent on behalf of the country’s citizens. The aim is transparency, accountability and an avoidance of wrongdoing and conflicts of interest,” he said.
Only Gershom Sizomu, the MP for Bunghoko North in Mbale district, and the head of a small Jewish community, told us how much money he paid in taxes. He said he had paid Shs 37.1 million (about $10,280) in Pay As You Earn for the 11 months to March. We could not verify this figure.
Wilfred Niwagaba, the MP for Ndorwa East in Kabale district, gave us a go-ahead to have the Uganda Revenue Authority furnish us with his tax returns, even those from his private businesses. That information is yet to be made available to us. He also supports a policy that requires legislators to make public the taxes they pay.
Gordon Bafaki, the member of parliament for Kazo in Kiruhura district, said he pays all his taxes from his private business and said his payments are “well captured” in the URA system. He did not, however, divulge to us how much he paid.
Like in many other corporate entities, the issue of tax remains a sensitive subject on the floor of Parliament. The last time a debate to have MPs pay any form of tax came up in the House, tempers flared.
That was last year when URA slapped an income tax bill on the Shs 150 million ($41,666) that government had awarded each MP to buy cars. In animated arguments, the MPs, mostly from the ruling party, criticized URA’s attempt to collect tax on the money, and managed to have President Yoweri Museveni to issue an executive order declaring a tax exemption.
Things could change soon, though. By law, the members of parliament are supposed to disclose their assets to the government ombudsman, the Inspector General of Government. In June this year, the legislators will be required to disclose those assets via an online form. There are attempts to extend the disclosure to family members, although the tax component is missing.
However, many legislators do not disclose their assets. There have been calls for government to speed up the amendment of the Leadership Code Act, 2002, to allow punitive measures to be undertaken against those that do not declare their assets accurately and on time.
Still, even with a law in place, the lack of public disclosure, which would help in the process of verification, might not help in tackling corrupt tendencies, be it under declaration or tax evasion, which, for a country such as Uganda, are deeply rooted.
The tax disclosure project is a collaboration between The Observer’s Watchdog and Finance Uncovered UK.