Shs195 billion paint deal led to URA shake-up

Monday June 1 2020

URA Commisioner General Musinguzi Rujoki took

URA Commisioner General Musinguzi Rujoki took over the tax body in March . FILE PHOTO 


Latest information indicates that when a board member of Uganda Revenue Authority (URA) got wind of a planned State House investigation into allegations of corruption at the tax body, he ran to the Board and proposed an urgent cleanup operation.

Lt Col Edith Nakalema, the head of the State House Anti-Corruption Unit, was expected to go to URA three weeks ago and open investigations into allegations of syndicated corruption.

The board members, however, made quick plans to inform President Museveni about the impending purge at URA and requested him to first allow the board to “fumigate” the tax body. It was resolved that Lt Col Nakalema comes in after the board failed to deal with the corruption.

In the last week of March, the board contacted the President and promised to clean up the tax body, plug the gaps of leakages and ensure accountability of collected revenue. They also promised a new era of integrity, patriotism, and professionalism at URA.
By this time, the President had already appointed Mr John Musinguzi Rujoki, who once served as the head of the Finance and Audit Department of the Special Revenue Protection Service, to replace former Commissioner General Doris Akol and ensure a new team is put in place.

When Mr Rujoki took over URA in March, he came with strict instructions to clean the tax body. Sources say Mr Rujoki spent nearly two months digging up information about URA commissioners and their dealings. Mr Rujoki went to the board on Thursday and shared intelligence briefs on the four commissioners.

Commissioners Dicksons Collins Kateshumbwa, Henry Saka, Silajji Kanyesigye Baguma, and Samuel Kahima tendered in their resignations on Friday. The URA management issued a statement at the weekend confirming resignation of the four big shots and senior management staff changes.


Of the four commissioners who resigned on Friday, three were accused of engineering a Shs195 billion tax waiver in a multi-billion deal involving the purchase of Sadolin Paints by Japanese firm, the Kansai Paint in 2017. The issue of the waiver was resurrected by Mr Rujoki with the backing of the board members.

Kansai Plascon Africa Limited (KPAL), a subsidiary of Kansai Paint, announced the acquisition of 100 per cent of Sadolin Paints’ operations in Kenya, Uganda, Tanzania, Zanzibar and Burundi.

However, the information before the URA board is that taxpayers lost Shs195b through the waiver. One of the officials involved in this deal has since moved to South Africa.

Ms Akol yesterday declined to comment on the issue and referred the matter to the new URA management.
“Please direct any questions to the ,,Commissioner General or Mr Vincent Seruma,” she said.
Mr Rujoki did not comment on the specific reasons why the four commissioners were asked to leave but said the tax body is focusing on professionalism.

“We have embarked on a new era of service and our focus will be integrity and conducting our business with professionalism. It is a job we must do with total integrity,” he said.

Mr Rujoki said the commissioners should be applauded “for retiring willingly. It’s a very honourable culture.”
He said paying taxes is critical and promised that URA will not tolerate staff without integrity.

“We shall not compromise on the issues of integrity,” he said.

Mr Kateshumbwa on Saturday said he was proud of the leadership service and he had no regrets.
“I have decided to take early exit from URA after 14 years of service. Coincidentally my tenure as WCO Council Chair ends in June hence no seeking re-election. Proud of the all-round leadership service in Tax and Customs. 18 reforms in Customs in 5 years, no regrets,” he tweeted.

Resigned or pushed?
Even with the exchanges in the URA board, there were no corruption charges against any of the top officials exiting the national tax body.

Sources told Daily Monitor that on Thursday, some board members wanted to charge the three commissioners linked to the Shs195b waiver but later changed the decision after realising that it will be a waste of time and public funds since the commissioners signed the waiver on behalf of URA.

The fourth commissioner, according to sources, resigned after the board did not renew his contract which was expiring in June this year.

Two board members said this commissioner was accused of amassing wealth and he failed to explain how he obtained money for a posh resort, clearing firms and buildings.

The board sat on Thursday (May 28) and declined to renew his contract. Some wanted the affected commissioner to go on leave of 90 days or be forced to resign with immediate effect. Some had wanted the affected commissioners suspended but this option was not supported because it would delay the cleanup exercise.

Changes at URA
Only on May 28, the URA Board of Directors sat and made recommendations concerning the reorganisation and management of the body.

On Saturday, URA issued a statement and explained that the four senior managers chose to resign on their own and the board accepted their resignation.

Mr Patrick Mukiibi has been moved as Commissioner Corporate Services and named Commissioner Domestic Taxes while Ms Patience T. Rubagumya remains as Commissioner Legal Services and Board Affairs.

Mr Herbert Rusoke stays on as Commissioner Internal Audit and Compliance, as Mr Abel Kagumire remains as Acting Commissioner Customs.

Mr Mathew Mugabi has been appointed Acting Commissioner Tax Investigations, and Mr James Kizza appointed as Acting Commissioner Corporate Services.

Mr John Tinka Katungwesi will be Acting Assistant Commissioner Large Taxpayers Office.
Although URA announced staff changes, sources told Daily Monitor that Mr Rujoki’s instructions is to break the racket and come up with a new team to manage the authority.

The board has also resolved that those in acting capacities should do internal interviews in June and those who will not go through, will be asked to leave and their jobs advertised.