The Uganda Revenue Authority has suspended the Ugandan subsidiary of Kenya Commercial Bank from its portal rendering it unable to offer tax payment services.
In a public notice on its website yesterday, URA confirmed that the services had been withdrawn immediately pending resolution of critical issues.
“Notice is hereby given to the general tax paying public that Uganda Revenue Authority has deactivated Kenya Commercial Bank (KCB) from the URA portal with effect from the 21st December 2016 pending resolution of key issues,” read the statement in part.
In an emailed response to The Standard, the parent company, KCB Group said that the Ugandan subsidiary had confirmed the URA decision. According to the subsidiary, the decision was due to a court case.
“KCB Bank Uganda Limited was identified as a garnishee in a court case involving URA and third parties. The Bank acted as garnishee in compliance with an order issued by the Court in Kampala,” said the bank.
A garnishee is a person or entity, quite often a bank or employer, which receives a court order to not release funds held for or owed to a customer or employee, pending further order of the court.
Until the process is completed, URA headed by Doris Akol has directed its clients to use other banks on the portal for payment of taxes. Meanwhile KCB Uganda said that it is engaging with Uganda tax authorities to resolve the issue and restore the service.
“We regret the inconvenience caused to our customers and we are confident that we will reach a resolution at the earliest time possible,” said the subsidiary.
The suspension is a huge inconvenience for customers, especially because KCB Uganda has 16 branches spread out in different regions of the country, making it among the top five banks.
KCB is one of the oldest banks in the region. Initially, in Uganda it used to be exclusively for corporates and high net worth individuals. However return of the bank in 2007 saw the financier open its doors to SMEs and other retail customers.
As of end of 2015, KCB Uganda was among the 22 banks that have been partnering with URA to make it convenient for tax payers to remit their taxes. In the last financial year, the revenue authority failed to meet its target.
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Other top banks offering the service include Barclays Uganda,Equity Bank, Diamond Trust Bank,Citi Bank, Ecobank, Housing Finance and Bank of Baroda Ugandan market is served by 25 commercial banks with the top eight banks dominating three-quarters of the market.