Cargo and Freight company, Quantum Express Logistics Limited (QEL) has described their closure by tax governing body, Uganda Revenue Authority (URA) as “unreasonable” and proof of their “notoriety in broadcasting their otherwise lacking- competence and vigilance.”
URA last week closed QEL, a company owned by city businessman Matthew Kanyamunyu over unpaid VAT arrears amounting to Shs13 million, dating from as far as 2016.
The company claims the decision taken by URA was uncalled for and irrational since the same Authority owes them Shs300 million in Withholding tax.
“Over the last five years, QEL has paid close to Shs500 Million in taxes to URA. Over the same period, there has accrued close to Shs300 million owed to us in withholding Tax (WHT) credits,” George Odeke the QEL General Manager wrote in a statement to ChimpReports.
Withholding tax is the portion of employees’ wages that is not included in their pay because it is remitted directly to the tax authorities. It reduces the amount of tax employees must pay when they submit their annual tax returns
“We found it unreasonable that they should take such brash action when the body effectively owed us over 10 times more,” Odeke added.
URA Manager for Debt collection Stanley Kabyemera told ChimpReports on Wednesday that URA signed a memorandum of understanding with Quantum Express Logistics in 2016, one which they breached.
“We had it last year and it was supposed to expire in February this year,” said Kabyemera.
“We contacted them in February and they had not made the payment. Out of the four months, they had only paid for two yet the payments are supposed to be made monthly,” he added.
In the statement, Odeke revealed that “sometime at the end of Last year (2016), URA carried out an audit and claimed to uncover Shs12 Million in unremitted VAT dating back to the year 2012 and added to it penalties of UGX13M.”
“URA then threatened to withhold our licensing over the outstanding VAT payments and penalties amounting to UGX 25 Million.”
Odeke said that the company sought audience with the Commissioner General with a view of offsetting the insignificant VAT arrears with Withholding Tax credits, one which they couldn’t get.
“Despite many reminders to her office no action was taken to resolve our concerns until last week when URA unilaterally and without warning closed our offices,” he said.
He revealed that the company is consulting with its lawyers to seek legal redress of the matter.
Kabyemera said that the closure of QEL was to allow them to settle and honour the Memorandum of Understanding they signed in 2016.