By John V Sserwaniko
The Parliamentary report that was sparked by Mukono South MP Jackson Muyanja Senyonga’s whistle-blowing has recommended prosecution of SGS top officials and their accomplices in the ministries of Land and Works for offences relating to tax evasion. In the very basic terms tax evasion refers to when a would-be tax payer pays less tax as a result of disclosing falsified information concealing part of his tax liability. Individuals and corporations can be liable for this offence and in the SGS’ case it’s the latter. The foreign firm was in March 2015 contracted to implement the mandatory motor vehicle inspection aimed at establishing their roadworthiness. Barely three years into implementation, the deal run into trouble when concerned citizens acting through public-spirited legislators like Muyanja Senyonga petitioned the Speaker of Parliament raising lots of concerns. Acting in public interest as usual, the Speaker Rebecca Kadaga duly instructed the Physical Infrastructure Committee of Parliament to investigate the matter only to discover so many fraudulent things as was elaborately captured in our previous SGS story (titled “Parliament Rejects SGS Deal: Accuses Foreign Firm of Fraud, Tax Evasion”) posted a few hours ago on this very news website (www.mulengeranews.com).
TAX EVASION:
In their report, the MPs disclose several instances of tax evasion characterizing transactions involving SGS regarding land transactions that ordinarily attract Stamp Duty which is a form of tax. That SGS has been using UGMVIS Property Holdings Co Ltd, one of its subsidiaries, as a Special Purpose Vehicle to engage in land transactions. All these transactions by law attract Stamp Duty which the MPs elaborately show that SGS has been evading. The MPs hold the SGS Uganda Country Manager Christopher Dubois personally responsible for these tax offences. `The SPV was locally incorporated in Uganda to buy land for the SGS projects especially the 7 Motor Vehicle Inspection sites. The MPs illustrate their point using majorly land acquisition transactions at the Kawanda site and the one of Nabbingo. The Registration of Titles Act (RTA) is the principal law when it comes to land transactions. And Section 54 makes it mandatory that every land transfer instrument must attract Stamp Duty. Such transfers can only be effective on payment of requisite taxes by the parties involved.
THE KAWANDA CASE:
The report shows that at Kawanda, SGS bought two plots namely Plot 580 and Plot 577. They are both on Block 107 Kyaddondo respectively measuring 0.037 and 1.581 hectares. The two title deeds were transferred from the vendor Industrial Steel Masters Ltd to purchaser UGMVIS Company Ltd on 31st March 2016 at exactly 10am. This is a subsidiary company of SGS. Each transfer must have its own transfer instrument number but in this case, two transactions were based on one instrument numbered WAK00079414. It’s only the payment of the Stamp Duty that legalizes the transfer but in this case, the SGS officials preferred to have two land transfer transactions covered under one transfer instrument, which clearly contravenes the RTA. “In this case, one instrument number was criminally used to validate two transactions,” one of the committee members explained to Mulengera news website. The report specifically says: “By using the same instrument number to effect two transactions, SGS succeeded in avoiding payment of Stamp Duty to the government on one of the transactions for which they should be held culpable.”
THE NABBINGO SAGA:
Here the SGS planned to have the other inspection site and the land bought is particularized as Plot705 & Plot 706 Block 331 Busiro and it respectively measures 0.404 and 0.406 hectares. From the undisclosed seller/vendor, the transfer was effected on 31st March 2016; same day and same hour/minute which the MPs say is practically impossible. The time for both was 11: 00am under the Instrument Number WAK00079434. “Again Stamp Duty was evaded and this tax evasion is an offence over which SGS should be sanctioned,” the report recommends adding that the SGS boss’ accomplices in the Lands Ministry should also be further investigated and prosecuted.
THE NAMANVE FRAUD:
The report adds that even the Namanve plots’ transfer was shrouded in fraud whereby there are two plots with two registered separate owners namely SGS and its two subsidiary companies namely UGMVIS Ltd and SGS Automotive Uganda Ltd. The Namanve plot is 1299 on Block 242 Kyaddondo and it measures 4.4410 hectares with a 99 year lease effective from 1st July 2016. The transfers covering the three transactions were effected under same Instrument Number WAK00093205. Another Namanve piece of land was bought and transferred from MMAKS Nominees Ltd on 10/4/2017 at 11:08am under the instrument number WAK00122294. This same Namanve plot same particulars and same acreage; same 99 year leasehold is owned by SGS Automotive Uganda Ltd of PO Box 63 Kampala as well as by Sumaria Properties Uganda Ltd, an entity that got the transfer under instrument number WAK00116057 effected on 20th February 2017 at exactly 12;48pm. The MPs note that another source of suspicion relates to why the subsidiary companies have the same address. “All these point to one conclusion that SGS is a fraudulent organization that shouldn’t be entrusted with a monopoly of providing a sensitive service like mandatory motor vehicle inspection and managing national motor vehicle data bank. Such functions are sensitive,” the MPs argue in their 96 page report. “SGS has questionable reputation which exposes the country to serious security risks.” The MPs then conclusively recommend that: “The contract should be rescinded on criminal and unethical grounds committed by SGS.” Whereas the 35 MPs unanimously agree on the findings indicting SGS and its godfathers at the Port Bell Road-based Works Ministry, they are disagreed on what must be done. Majority recommend continued suspension of implementation of inspection exercise for not less than 3 months to allow room for renegotiation. The minority of 9 MPs recommend termination on grounds the contractual breaches by SGS are so glaring that the GoU can safely repudiate the contract.
FRUSTRATING AG/PPDA:
The MPs also want the Works Ministry officials to be penalized for the way they frustrated efforts by PPDA and the Attorney General to appeal the 2010 High Court decision shielding SGS against being scrutinized by PPDA via administrative review proceedings. In fact according to sources in the AG chambers, the ministry officials refused to cooperate and to share relevant documents something that frustrated the AG’s determination to appeal against the Judicial Review decision in favor of Eng Sabiiti and his SGS accomplices.
COMMITTEE MEMBERS: The members include Abraham Byandala, Kafeero Sekitoleko, Henry Maurice Kibalya, Dennis Sabiiti, Burundo Musingo Alex, Mbeiza Margaret, Richard Okoth Othieno, Paul Musoke Sebulime, James Waluswaka, Lawrence Mangusho, Robert Kasolo, Paul Asaba, Moses Angundru, Wamala Nambooze, Mark Angel Dulu, Amos Mandera, Robinah Nabanja, Boaz Kirabo Ninsiima, Guma Gumisiriza, Cecilia Ogwal, William Nzoghu, Elijah Okupa, Angiro Gutmoi, Jonathan Odur, Sempala Kigozi, Francis Mwijukye, Julius Ocen, Anne Mary Tumwine, Steven Birahwa Mukitale, Keneth Cheborion Soyekwo, Samuel Okwir, Francis Takirwa and Margaret Muhanga. The dissenting 9 members behind the minority report include Kibalya, Okoth Ochieno, Waluswaka, Wamala Nambooze, Nzoghu, Gutmoi, Sempala, Ocen and Mwijukye. For comments on this & other Mulengera news stories, reach us on 0703164755
