Tax body, Uganda Revenue Authority (URA) has Wednesday closed the offices of the weekly newspaper, The Observer over non payment of taxes amounting to Shs 2.9bn.
In a statement issued by The Observer late on Wednesday, the Management said their officers had been sealed off due to claims by the tax body that the news outlet had defaulted on its tax obligations.
“This afternoon, Uganda Revenue Authority (URA) sealed off our offices in Kamwokya claiming that we have not met our tax obligations,” the statement read in part.
“The truth is we have been in several meetings with URA since December 2018, trying to settle the discrepancy between their figures and ours”.
The Observer adds however that there is a “miscommunication” between the enforcement department and the domestic tax department.
“Our appeal and negotiations were not communicated” the Management of the newspaper further stated, adding that URA’s endorsement team proceeded to close their premises without being updated by the domestic tax department.
When contacted by SoftPower News regarding the issue, Ian Rumanyika, the Manager Public and Corporate Affairs at URA confirmed that indeed URA made an enforcement and closed The Observer offices.
“They have a liability of Shs 2.9bn. The issue is Pay As You Earn (PAYE) and Value Added Tax (VAT). This has happened over a period of time. They have been negotiating on how to pay,” Rumanyika said.
He said there was a Memorandum of Understanding (MoU) between The Observer and URA on how to settle the outstanding taxes but that the newspaper did not meet it’s obligations.
“There was an MOU that was supposed to be effected in January but they did not fulfil their obligation, so we had to enforce”.
Asked what the conditions are for the premises to be reopened, he said “they have to come back to table and renegotiate”. This, he said, involves the news organization making some financial commitments before the MoU can take effect.
On The Observer’s concerns that there are discrepancies in their figures and URA’s Rumanyika said there was a reconciliation and agreement on what amount was supposed to be paid as is the case whenever an audit is undertaken.
In its statement, The Observer said: “We are in talks to see to it that this problem is sorted out as soon as possible”.
In 2013, the newspaper which since its launch came out once a week, decided to scale up so as to make tri-weekly news publications.
This was sustained for four years until October 2017 when The Observer reverted to a weekly newspaper largely due to financial constraints that print media in general is grappling with.