Uganda Cooperative Alliance Runs Broke, Defaults to Pay 1.6bn in Taxes due to URA, Prompting Matia Kasaija to Plead for Them in Letter to Speaker Anita Among

By Ben Musanje

Uganda’s long-serving apex body for cooperatives, the Uganda Cooperative Alliance (UCA), has fallen into financial collapse, defaulting on over UGX 1.6 billion in unpaid taxes, prompting the Minister of Finance, Planning and Economic Development, Matia Kasaija, to appeal to Parliament for a waiver of its tax arrears.

In a letter addressed to the Rt. Hon. Speaker of Parliament, Anita Annet Among, and dated September 30, 2025, Kasaija requested Parliament to approve a waiver of the tax arrears owed by UCA to the Uganda Revenue Authority (URA).

The appeal was also copied to the Clerk to Parliament and the General Secretary of UCA.

Kasaija explained that, pursuant to Section 43(1) of the Tax Procedures Code Act, Cap 343, URA had recommended a waiver of VAT arrears totaling UGX 1,313,376,467 due to the cooperative’s financial difficulties.

He stated that the Ministry had reviewed URA’s submission and was satisfied that the outstanding taxes could not be effectively recovered, noting that UCA’s financial condition made recovery impractical.

He further noted that the purpose of his correspondence was to seek Parliament’s approval to waive the tax liability in accordance with the law.

Legal and Administrative Background

Section 43 of the Tax Procedures Code Act, Cap 343, empowers the Minister of Finance to recommend remission of tax arrears that are irrecoverable due to a taxpayer’s financial inability. Such remission, however, requires approval by Parliament.

In this case, URA’s letter dated July 18, 2025 (Ref: URA/CG/10.0) had identified UCA’s long-standing VAT arrears and highlighted that the institution’s financial position made collection impossible.

The Finance Ministry agreed with URA’s findings and concluded that the tax debt could not be effectively recovered.

UCA’s Financial Troubles

UCA, historically the backbone of Uganda’s cooperative movement, has struggled in recent years with operational inefficiencies, declining member contributions, and governance challenges.

Established to promote and coordinate cooperative societies across Uganda, the body has grappled with heavy debts, limited revenue streams, and the erosion of its accumulated assets.

The arrears owed to URA stemmed primarily from unpaid VAT obligations accumulated over several years. URA initially attempted recovery but later recommended a waiver, acknowledging that enforcement would likely yield no results.

Kasaija’s Appeal to Parliament

In his letter, Kasaija appealed to Parliament to consider the broader social and economic implications of allowing UCA to collapse under its tax debt.

He emphasized that the Ministry’s position was based on legal provisions, as well as URA’s assessment of UCA’s inability to meet its obligations.

The letter, officially received by Parliament on September 30, 2025, carried the reference number TPD 280/304/01 and was formally titled “Waiver of Outstanding Tax Arrears for Uganda Cooperative Alliance (UCA)”.

It included official Ministry contact details and was issued from Plot No. 2–8 Sir Apollo Kaggwa Road, Kampala.

Kasaija signed off in his capacity as Minister, highlighting the Ministry’s mission to formulate sound economic policies, maximize revenue mobilization, ensure efficient allocation and accountability of public resources, and achieve sustainable economic growth.

What Happens Next

Parliament’s approval is now required for the waiver to take effect. If granted, UCA will be relieved of over UGX 1.3 billion in VAT arrears, which may prompt debate on government intervention for financially struggling institutions and the precedent it sets for future tax waivers.

While the Ministry stressed the legal and practical basis for the request, critics may question why a historically significant institution has become dependent on government bailouts. Proponents argue that preserving UCA is critical to reviving Uganda’s cooperative sector, which has historically empowered farmers, SACCOs, and other rural economic groups.

A Symbolic Turning Point

The appeal underscores the financial fragility of institutions once central to grassroots economic empowerment. Approval of the waiver could stabilize UCA, but refusal may lead to enforcement measures, asset seizures, or even dissolution, further weakening Uganda’s cooperative movement.

In conclusion, Finance Minister Matia Kasaija has asked Speaker Anita Among and Parliament to approve a tax waiver for UCA, citing the body’s insolvency and inability to pay. The move highlights growing financial challenges in key national institutions and sets the stage for a critical discussion on balancing tax enforcement with the preservation of Uganda’s cooperative legacy. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).