Members of parliament on the Public Accounts Committee have grilled the permanent secretary ministry of public service, Catharine Bitarakwate, and other ministry officials for failure to deduct Pay As You Earn tax from political leaders and commissioners’ gratuity.
Basing on the Auditor General’s report for 2021-2022, the committee found that in 43 local governments political leaders and district service commissioners were paid gratuity of over Shs1.3 billion which was not subjected to PAYE computations and deductions leading to a loss of tax revenue of over Shs363 million to government.
In response, Bitarakwate explained that the Integrated Personnel and Payroll system had initially been configured on provisions of the Pensions Act on the understanding that gratuity which is a terminal benefit is not taxed although it was later clarified.
However, the committee chairperson who also doubles as Bardege–Layibi MP Martin Ojara Mapenduzi was not satisfied with her explanation, saying the ministry was not doing enough to address the loopholes.
