DFCU on the spot over tax evasions

Dfcu Limited, a development finance institution is on the spot over tax evasions and avoidances.

The company owns different properties which include; Dfcu Towers on Plot 1, Mackinnon Road, Nakasero, Kampala; Plot 36 Jinja Road, Mukono; Dfcu Financial Centre Block 111, Plot 3737, Namanve and Plot 7, Luthuli Lane, Bugolobi.

Eagle Online has learnt that Dfcu limited has not been remitting taxes for Dfcu Towers. The building is situated on the outer core of the Kampala Central Business district, the facility is rented in terms of Square meters.

It has established that a square meter (sqm) at Dfcu towers goes for $1600 per month; a Service Charge of $4 00 per sqm per month; Car parking fees of $3500 per slot per month. The rates above are quoted exclusive of VAT.

Its clients include; AF Mpanga Advocates paying $11,243 per month, Dfcu Bank, Unilever Uganda Ltd, the Kingdom of Netherlands Embassy which occupies the sixth floor and others. Embassy reportedly pays $11,700 per month and paid for five years.

This publication also learned that tenants pay a nonrefundable fee of $ 22,487 and are required to pay a minimum of five months and later three months but they are free to pay more than six months.

The tax compliance audit which was conducted from 2014 to 2020 revealed Dfcu limited under declared its rent income by Shs8.4 billion. The management of the Dfcu and URA held several meetings to deliberate on that issue however; the tax body insisted that they have to pay over face other consequences.

Eagle Online also established that URA was willing to decrease the Ddefaulted and demanded rental tax from Shs6.4 billion Shs3.5 billion but Dfcu defied at ran to Tax Appeal Tribunal. The company has since been ordered to pay 30% of the assessed amount of money before the hearing of the matter.

The under-declared rental income has been increasing from Shs955 million in 2014, Shs356 million in 2015, Shs172 million in 2016, Shs1 billion in 2017, Shs1.5 billion in 2018, Shs1.53 billion in 2019, and Shs280 million in 2020.

Mulengera News reported that George Ochom, the General Manager of Dfcu Ltd claimed that URA made a wrong decision because their auditors misclassified service charges.  

He said some of the tenants like the Embassy got a huge discount but URA officials declined on grounds that the company failed to table evidence. He claimed that Shs3.5 billion was incurred as interest for repayment of the loan which was used to put up the building.