Insurers stopped from paying KCCA fees

By Samuel Sanya

The Insurance Regulatory Authority (IRA) has won an appeal stopping the Kampala City Council Authority (KCCA) from collecting trading license fees from its members.

The city authorities had insisted on the dues threatening to close down the First Insurance Company (FICO) and others in the insurance industry.

JBR Suuza, the Solicitor General has written to the IRA supporting their case as the sole recipients of annual trading license fees for insurance firms.

He explained that provisions within the Insurance Act shielded insurance companies from paying trading license fees to KCCA.

Suuza argued in a three page letter that the insurers are covered by similar provisions that protect banks and financial institutions from paying trading license fees to the City Authority.

Stanbic Bank Uganda recently won a case in the High court against the attorney general blocking payment of trading license fees on the pretext that it does not deal in “goods”. 

“The facts, circumstances and issues that gave rise the above findings of the High Court are “on all fours” with those of the present matter,” the solicitor general said in the letter dated 23rd May 2012.

 “The only and natural implication of the ruling is that providers of insurance services too are exempt from trading license fees,” he added.

Mariam Nalunkuuma, a Communications Officer at IRA said that the payment of large trading license fees to KCCA has been crippling the sector.

“We can now shift our focus to increasing the insurance penetration in the country with little encumbrances,” she added.

However, Peter Kaujju, the KCCA publicist said that he had not yet received copies of the letter and that the insurers have an obligation to remit trading license fees to city authority.

 “The law states that all businesses operating within the KCCA jurisdiction have to contribute money toward the welfare of the city,” he said.