You’ve no business with bank clients’ accounts, court tells URA
What you need to know:
- The justices say the directive of the tax body infringes on the privacy of bank clients.
- The petition was filed at the time when account details of Ms Justine Bagyenda, then executive director in charge of commercial banks supervision at Bank of Uganda, were leaked to the public and consequently published by several online news sites.
The Constitutional Court has ruled that it was unconstitutional for the Uganda Revenue Authority (URA) to demand from commercial banks details of each account holder.
In a unanimous decision of the court, five justices held that the directive of the tax body, infringed on the privacy of the bank clients, which is guaranteed by the Constitution.
“A declaration that the notice impacts the right to privacy of all bank account holders as enshrined in article 27 (2) of the Constitution in a manner that far exceeds what is necessary to accomplish the objective of tax collection and is accordingly beyond what is accepted and demonstrably justifiable in a free and democratic society,” held Justice Christopher Izama Madram who wrote the lead judgment.
He added: “Further, though the petition concerns issues of public interest, the actions of the second respondent (URA) subjected the petitioners to unnecessary costs and inconveniences.”
Article 27(2) of the Constitution provides that no person shall be subjected to the interference of the privacy of a person’s home, correspondence or communication, the country has no comprehensive law to safeguard personal data.
To that effect, the justices went on to condemn the tax body by ordering it to pay all the legal costs that the 29 commercial banks used in successfully litigating this petition.
The Attorney General, who was the second defendant, was excused from paying costs on grounds that he was not directly involved in issuing the unconstitutional notices to the commercial banks.
“In the premises, the costs of the petition should follow the event and I would make an order awarding costs to the petitioners as against the 2nd respondent (URA) only. As for the 1st respondent (AG), he was not directly involved in the matter and I wouldn’t make an order,’’ he added.
According to the notice by URA, the banks were supposed to avail records of their clients, including the account name, Tax Identification Number (TIN), National Identification Number (NIN), address, telephone number and email addresses to the tax collector, a move that was aimed at raising more tax revenue.
The other justices, who concurred with the lead judgment were Fredrick Egonda Ntende, Elizabeth Musoke, Monica Mugenyi, and Christopher Gashirabake. The petition followed a March 16 letter by the URA’s Commissioner of Domestic Taxes, Mr Henry Saka, asking all the commercial banks in the country to provide information on all account holders from January 1, 2016 to December 31, 2017.
The petition was filed at the time when account details of Ms Justine Bagyenda, then executive director in charge of commercial banks supervision at Bank of Uganda, were leaked to the public and consequently published by several online news sites.
The other requirements were the total cash deposits in the respective accounts for the period starting January 2016 to December 2017 and total cash withdrawals from those accounts over the same period.
The petition followed concerns of how rogue public and security officers could use the data to blackmail cash-rich individuals or even rob them when they move the money. The other concern was about the security of the data and also how such information could be used to target the government’s political opponents.
Banks that sued URA and the Attorney General are ABC Capital, Bank of Africa, Bank of Baroda, Bank of India, Barclays Bank, Centenary, Citi, Commercial Bank of Africa, Dfcu, Diamond Trust, Eco Bank, Exim Bank, Diamond Trust, Equity, GT Bank, KCB, Pride Micro Finance, Stanbic, Opportunity, Finance Trust, Mercantile Credit, United Bank of Africa, Uganda Bankers Association, Finca, NC, Standard Chartered, Tropical, Credit Bank, Orient, and Cairo International.