By Henry Mukasa

THE Uganda Revenue Authority (URA) plans to prosecute the managing director of Stanbic Bank, Phillip Odera, for the bank’s failure to remit sh2b to them from the Jacobsen (U) Power Plant accounts.

According to a notice sent to the bank dated January 5, 2010, the tax body has given Stanbic Bank seven days to make payment.

URA was claiming sh17b from the power plant in Value Added Tax arrears accumulated since 2008.

The power plant built and operates the 50MW Namanve thermal power station.
On December 15, 2009, the Commissioner General served an “Agency Notice” ordering Stanbic Bank to freeze the Jacobsen’s accounts and remit the money to URA to enable it recover unpaid taxes.

However, on December 23, 2009, the bank’s legal officer, Dorothy Ochola, wrote to URA saying the “Agency Notice” could not be honoured because there were insufficient funds on Jacobsen’s account.

She also said the Norwegian power firm had secured a court order restraining URA from attaching its accounts.
URA first wrote to Jacobsen in June 2008, asking them to settle arrears amounting to sh14b at the time. However, Jacobsen rejected the claim, saying it was tax exempted.

Following a series of meetings, the company accepted the liability in November, but indicated it would only pay sh14b, the sum minus interest.
Jacobsen argued that they had not been able to clear their tax arrears due to the failure by the Uganda Electricity Transmission Company to pay them for power supplied since 2008.
The transmission company is the sole buyer of the electricity generated by Jacobsen.

However, in its suit at the commercial court on December 17, Jacobsen challenged the tax assessment by URA arguing that tax liability against it was unlawful.

Oscar Kambona, the Jacobsen’s lawyer, told the court that the firm had been misinformed by the transmission company, which had insisted that part of the sales should be exempt from taxes.

In their January 5 letter to Odera, URA acting Commissioner General, Michael Otonga, said they had obtained Jacobsen bank statements which showed that the firm had at least sh2b on its accounts in Stanbic, which the bank should have remitted to the tax body to settle the tax arrears.

URA also observed that the court order from the Commercial Court was obtained and served on December 18, 2009, three days after Stanbic Bank had received the “Agency Notice.”
URA has now shifted the burden of payment of the sh2b from Jacobsen to the bank.

Sources told The New Vision that following the URA attempt to attach its accounts, Jacobsen had finally paid the sh14b. But URA still insists that the company pays an additional sh3b in interest and penalty.

This is the second time the tax body is in a row over remittances with a power supply company. In June last year, URA froze the account of the Bujagali dam sub-contractors.