Privacy and compelled disclosures in bank records: Who wins and Why?

In a unanimous decision, the Constitutional court last week affirmed the right to privacy under a legal challenge brought by a number of commercial banks through their umbrella association, Uganda Bankers Association, against Uganda Revenue Authority and the Attorney General as the respondents. Not surprising, the court tossed out URA’s arguments. 

We are told that URA had by a subpoena (a subpoena is an information or document request or demand) sought compelled disclosures of information as bank records kept by the petitioners of all their bank customers that was seen as bordering on unwarranted intrusion in the way of being too invasive, arbitrary, overbroad and unduly coercive. 

According to a reporting made by this publication on March 10, 2023, and reported by other news channels, in part, the petition followed concerns of how rogue public and security officers could use the data to blackmail ultra/super rich individuals (not you and I) or even rob them when they move the money.

Due to limited space, our focus is on the constitutionality of the governmental conduct at issue leaving aside the question of potential political witch-hunt, identity theft concerns and protecting a small bourgeoisie class of high net worth bank clients’ information from state surveillance. 

In balancing the state’s competing interest in maximizing efficiency in tax reporting, collections and tax compliance on the one hand and safeguarding an individual’s privacy and security from arbitrary invasions by governmental officials, the lead judgment of Justice Christopher Madrama-Izama, as the rest of his other decisions, makes him a towering figure on the bench in providing interpretational knowledge of the law.   

However, flipping the argument, may a limited in scope subpoena for an individual’s bank records made to a third party and if so, required by a tax body to detect and prosecute acts of tax evasion be subject to compelled disclosures without a court order in the form of a search warrant? Put the other way, may you as a bank customer have a reasonable expectation of privacy in your monthly account statements, cancelled checks, deposit slips as part of a bank’s business records that it uses in its ordinary course of business? To suggest that anyone does, is open to challenge despite court’s narrow decision.

Dear reader, you would be forgiven to mistake your opinion contributor as being bedfellows with URA or that is courting for a retainer until one takes a deep look at an identical dispute that went as far as the U.S Supreme Court over a person’s expectation of privacy in information voluntarily turned over to third parties in which the highest court in that country ruled and its decision is still good law to this day, that there’s no expectation of privacy in financial records held by a bank. See United States v. Miller, 425 U.S. 435 (1976). 

Under the Miller analysis, the court stated that bank disclosure of customer documents was not uncommon since it long had been settled law that Internal Revenue Service (IRS) summonses served upon a third-party bank did not violate any depositor’s fourth amendment rights. 

What remains to be told is whether the struck down provisions of the Income Tax Act properly construed, had a legitimate and valid purpose, whose implementation and application by overzealous governmental officials as we see with the limitless scope of URA’s subpoena was what should have been at fault than the law itself. That appears to be the case, which the Supreme Court ought to settle in keeping with the decision in Miller. 

In the aftermath of Miller, decided over 40 years ago, history tells us that state legislatures and Congress passed a raft of legislations to skirt around the radical view presented by Miller’s case which frankly is the solution here that our Parliament should interest itself with in safeguarding the privacy of an individual’s bank information than maintain the false narrative and belief that the constitutional privacy protection which the Constitutional court put to test is a one size fit all. Like it or not, there are clear exceptions as Miller rightly so screams in our faces from the rooftop!

James Tamale

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