NSSF gets Shs4.5b from non-compliant employers

Thursday December 13 2018

Mr Richard Byarugaba, NSSF’s managing director.

Mr Richard Byarugaba, NSSF’s managing director. PHOTO BY CHRISTINE KASEMIIRE 

By Christine Kasemiire

Kampala. National Social Security Fund (NSSF) reports 30 cases of uncompliant employers to court monthly, recouping Shs4.5b.
Information revealed by the retirement fund indicates that on average, the 30 cases taken to court monthly culminate into recovery of Shs4.5b annually.
Given that the year has 12 months, the fund on average reports 360 cases of uncompliant employers to court.
According to the law, employers with over five workers are required to remit 15 per cent to NSSF on a monthly basis. Of that, 10 per cent is contributed by the employer and 5 per cent is set aside from staff salaries.
Although the law dictates so, the remittances do not always happen.
Companies dodge complying with the law through under declaring contribution amounts, under declaring number of employees and non-payment of contributions.
Mr Geoffrey Waiswa, NSSF head of business recently in Lira emphasised the consequences of non-compliance by employers.
An employer found to be noncompliant, he said, is culpable of a 10 per cent fine in addition to the 10 per cent contribution he makes.
A noncompliant employer is also liable to pay the 5 per cent contribution that their employee would have paid.
A report released by Mr Richard Byarugaba, the managing director NSSF, revealed that despite the number of cases taken to court, 62 per cent of registered employers have been compliant this year.
“To date, the compliance rate of our employers is 62 per cent. This implies that 62 per cent of the expected payments of this financial year have been made,” he said.

Compliance levels
During the year, financial and insurance companies, utilities and energy as well as manufacturing and mining companies registered the highest compliance levels with 76, 73 and 72 per cent respectively.
He said, schools tend to hide in the fact that they have holiday periods in which salaries are not paid, which is not always the case.
Security companies are, however, non-compliant because of the high labour turn over and unreliable cash flows from their customers.

Worst sectors

The worst sectors are education, media houses, security companies and government agencies, Mr Byarugaba says at about 49 per cent.