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ADJUMANI: Contractors vow to drag CAO to police for snubbing clarification over Shs700m tax fraud

Adjumani, (UG):- The disgruntled DRDIP contractors in Adjumani District want the Chief Administration Officer (CAO) Mr Oryono Grandfield investigated by the police and other government investigative machinery with the view of prosecution for refusing to respond to their petition over non-remittance of Withholding taxes to URA initially amounting to over shs 442m

On April 6, 2024, the aggrieved DRDIP Contractors petitioned CAO Oryono seeking clarification on unremitted withholding taxes and issued an ultimatum of three working days but Mr. Oryono blatantly refused to yield to their demands.

“The action of CAO leaves us with no option but to write to the police CID headquarters and other government anti-graft agencies so that they will get to the bottom of the matter”. Mr. Tiondi Godfrey said.

More revelations by contractors

Mr. Tiondi divulged that more complaints are being filed by the contractors upon media reports showing the amount of withholding tax cash not dispatched to URA rising to shs 700m as four more contractors have volunteered information.

Mr. Okori Jimmy, the MD of God Willing General Traders Ltd said he was awarded the full rehabilitation of the Ukusijoni -Ajeri road contract with a total project value of 868.463.310, which he signed on June 8, 2021.” Upon completion of the road works a deduction of shs 52m was made from the contract value and when I tried following the documents showing evidence of remittance to URA he was tossed for two weeks until he grudgingly left for Lira district.

Why the CAO has not responded to the Contractors

Speaking to Daily Express on, April 15, 2024, Mr Oryono conceded that he has not filed a response to the petition of the Contractors because they did not consult him and rushed to the media as if his office was reluctant to address the matter.

“My office is not an agent of withholding taxes it is the duty of the community project management committee (CPMC) leaders and the contractors so the issue of non-remittance of withholding taxes by my office cannot arise”. Mr. Oryono defended.

He said his office has engaged the management of URA and the office of the chief finance officer to help the contractors and CPMC officials to have the mess sorted out so that the contractors will get evidence of payment of withholding taxes.

“Already some of the aggrieved contractors have received receipts of payment of Withholding taxes after following the guidelines citing Kate Contractors’ Construction Company Ltd”.

He said his office facilitates the process of deduction of the 6%in withholding taxes and has the cash remitted to URA and the rest of the processes are handled by CPMCs because they manage the sub-project accounts including effecting all payments.

The Aggrieved contractors have however rubbished the explanation of CAO Oryono as inadequate misleading and fraudulent because the deductions of 6%withholding taxes are executed in the office of district DRDIP desk office(DDO) in the presence of CPMC officials who issue payments cheque less 6% and contractors are advised to witness as community facilitators fill clearance and bank withdrawal receipts which are then deposited in the office of the project sub accountant Ms. Achen payment vouchers purportedly for clearing the taxes.

More evidence emerges

In a document seen by DailyExpress referenced as “payment clearance” that was addressed to the manager Stanbic Bank which was cleared by Mr Gulam Abubakar DRIP desk officer and CAO Oryono on November 28, 2023, the purpose of the request was indicated as payment of 6%withholding tax and a withdrawal receipt of shs 5.107.104 was attached to the document but the contractor who preferred to remain anonymous said he has not received any evidence of tax clearance from URA.

“The bank withdrawal receipt is gutsily filled by the community facilitators and handed over to the project sub accountant and one wonders why a cash withdrawal receipt is needed for transferring cash to the URA instead of using cheques”.

According to exhaustive investigations, most of the contractors do not have copies of the Clearance documents and withdrawal receipts from the banks, they were simply informed that their payments have been remitted to URA accounts pending feedback but since the 2018-2019 Financial year to date, the contractors have not received documents of remittances of withholding taxes from URA.

The MD Kate contractor Mr Tiondi Godfery has equivocally and categorically denied the explanation of CAO Oryono and produced documents showing over shs 86m deducted in withholding taxes from 3 contracts he has executed since financial 2018-2019 to date.

Mr Iranya Douglas, the MD of Analogue Investments Ltd told DailyExpress on Thursday, April 18, 2024, that CAO Oryono appears to be in panic mode because the aggrieved parties are on record and wrote to his office detailing their grievances with an ultimatum of three working days to file a response which he patently defied.

He said all the disgruntled contractors want is a comprehensive explanation on why money deducted from their total contract value for the payment of 6% withholding taxes was not remitted to URA?” If CAO Oryono can not account for contractors, then he will be held to account before the offices of the law.

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The contractors noted that even then there has been indiscriminate levying of the taxes whereas contracts on roads and bridges have been declared withholding tax exempt some of the contractors were forced to pay the purported tax.

They cited the example of Shataman Construction Company which was awarded the Eraji bridge connecting Lewa to Ayilo I and II refugees’ settlements with a project value of over shs 1bn did not pay while God willing contractor that rehabilitated the Ukusijoni-Ajeri road with a project value of shs 860m was deducted shs 52 in withholding taxes.

Several anomalies including manual hacking of sub-project accounts were also unearthed a typical example is three classroom blocks in Kozeiza village, Adropi sub-county, where DRDIP officials manually hacked the sub-project account and printed a bank statement without the consent of the account signatories and CPMC officials.

A Senior government official working with Adjumani district local government who preferred anonymity has disputed the procedure used for payment of withholding taxes by the DRDIP desk office arguing that money to URA is not supposed to be paid by cash, you either use cheque or I.A.T(inter-account transfer).

He said the documents used for tax clearance from the office of DRDIP are irregular and the law does not warrant the filling of bank withdrawal receipt because you don’t pay tax to URA in cash as a tax agent, the sub accountant raises the against after requesting for payment slip from URA and the cash is then transferred to URA accounts with details of the contractors, immediately the cash lands the accounts’ of URA, the contractors would receive electronic notifications through SMS or email.

A legal expert based in Adjumani insists that the CAO and his cohorts who are directly involved in the payment of withholding taxes to URA are criminally liable in two folds; For failing to remit the cash deducted from the payments to contractors and snubbing to offer explanations to the contractors for the delay, above all such huge money can not lie idle in government accounts for all these periods.

“It is unprocedural to argue that since financial 2018-2019, to date you have not remitted cash deducted from the contactors total project value in withholding taxes six years down the road and you want to convince the contractors that you are keeping the money safe in governments accounts, surely is DRDIP Adjumani office holding the accumulated shs 700m?”.

Why elected leaders have remained silent

On the question of political leaders’ intervention on the matter, the contractors believe the burgeoning calculated reality is to remove the principal threat to business peace and stability in the district by investigating their complaints with the view of prosecuting those found culpable.

If losing shs 700m by the business community cannot attract the attention of elected leadership then utterly lost in the mix has been the role of political leaders in combating corruption but backing CAO Oryono in his alleged fraudulent action is closely linked to being his proxies.

There is no leader in Adjumani willing to prevail over CAO Oryono to show restraint in work with the aggrieved contractors and impose a new normal on him by joining the losing contractors.

The Adjumani RDC Mr. Taban Data Peter said he has picked the information on the alleged tax fraud from Media reports and he has already taken the matter with the Executive director of DRDIP DR. Limlim Roberts and asked him to issue an explanation to the aggrieved contractors and the public so that their grievance is sorted out harmoniously.

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Public reacts

Leku Saviour a resident of Adjumani town council reacting on social media stated “This is disrespectful to the office of URA being in Adjumani district, how can u report difficulties in remittance to URA when the office is walkable distance from Adjumani district headquarters to consult and get free guidance from the officer’s around”.

Prince Omiboy another resident said “In this case the desk officer will die alone even if he was involved in the sharing of withholding taxes, I’m not sure up to 400M since 2018 is still available in the office of the desk officer.

 Oduvala, a concerned resident insists that the accused officers must vomit the money into the treasury accounts.

“Shameless people. How can you deduct money and not remit to URA and say there has been a problem remitting it?” he wondered.

 Solomon Agwe stated that; This understandably is a clear sign the CAO is being shielded or protected by political leaders in Adjumani who have kept tight lips despite our cry.

During the last Ministry of Public Service transfer list, the name of Adjumani CAO was touted to have surfaced, while the transfer was affected by the public service as a routine exercise, our CAO has remained put, delivering continuous disservice.

The future of Adjumani as a district is surely never bright.

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