URA Suspends Auction of Nakumatt Products as Client Commits to Pay Debt

Uganda Revenue Authority (URA) has Monday called off an earlier scheduled auction of indebted retailer Nakumatt supermarket after the business committed to clear their outstading taxes. Nakumatt Supermarket main outlet at Oasis Mall and two other branches in Kampala were closed off by URA in August over non payment of taxes amounting to Ush 300 million.

This was going to be the second auction after the first one on September 6 where URA auctioned perishable goods from which Ush 100 million was recovered, according to URA Spokesperson Vincent Seruma.

Seruma told SoftPower on Monday that Nakumatt promised to clear the remaining liability of Ush 200 million by close of business on Monday and to that effect, the auction was cancelled. The liability includes Pay As You Go (PAYE) and Value Added Tax (VAT) taxes in the last five years. The unpaid taxes exclude the interest accrued over the period

“The client is making payment today. We went slow in terms of publicity of the auction because every taxpayer at some point may have financial difficulty. Eventually, they settle their taxes.”

“We always want to give an opportunity for the taxpayer to meet their obligation without rushing to sell their merchandise. In addition, we are open to discussion with the taxpayer on when they are willing to make payment.”

On what happens if today’s commitment is not met, Seruma said URA will not remove the seals on the supermarkets until the payment is made.

“In an attempt to make the taxpayer not to lose completely, we agreed with Nakumatt to auction off the perishable items and we generated over Ush 100 million,” he added.

Nakumatt, one of East Africa’s biggest retail chains has so far shut down operations at five of its branches in Uganda including; Acacia Mall in Kololo, Village Mall in Bugolobi, Victoria Mall in Entebbe, Katwe Branch and Mbarara Branch.

This came at the heel of wide skepticism by customers over the growing empty stalls in the supermarket which left many suspicious of its future.

In addition to non payment of taxes, Nakumatt is battling numerous suits by a number of suppliers and landlords in Uganda, over colossal amounts of unpaid arrears.

Last month, over 100 former employees of Nakumatt Supermarket filed a petition to Trade Minister Amelia Kyambadde to help them recover their savings with the in house Savings and Credits Cooperative Society (SACCO) worth Ush 500 million.

It is estimated that Nakumatt owes about Ush 4.7 billion ($1.343m) to its suppliers alone.