Pension schemes will pay tax to help fund the Uganda Retirement Benefits Regulatory Authority (URBRA) in a move set to give the agency an independent budget.
The tax will also be used to conduct capacity building trainings for the players so as to develop a strong and stable retirement benefits sector.
Schemes receiving mandatory contributions will pay 0.05 per cent of the total assets to the Authority while those getting voluntary contributions will be required to contribute 0.025 per cent of their total assets.
Established in September 2011, URBRA is still fully funded by government. Mr Moses Bekabye, the Authority’s interim chief executive officer said the levy will provide a more sustainable financing stream for the agency in the long term to enable it attain independence which is key in boosting trust and confidence in pension administration.
“Independent regulation is important in dealing with governance issues in the sector and also in terms of addressing the trust and confidence issues,” Mr Bekabye told the Daily Monitor on the sidelines of a trustees’ training workshop on regulatory and licensing requirements in Kampala last week.
Although it is yet to be passed into law, Mr Bakabye said he is hopeful that Parliament will soon pass the Retirement Benefits Sector Liberalisation Bill, 2011. If passed into law, it will end the National Social Security Fund’s monopoly as the sole receiver of the 15 per cent mandatory contributions by allowing other players a foothold in the same space.