Space Holdings Limited has been directed by the Inspectorate of Government (IGG) to refund sh2.9 billion to the Ugandan government, representing unpaid taxes since 2018. The Deputy Inspector General of Government, Anne Twinomugisha Muhairwe, warned that failure to comply within 30 days could lead to the prosecution of the company’s CEO, Martin Mugarura.
The directive from the IGG comes in response to a whistleblower complaint alleging that Space Holdings Limited failed to remit value-added tax (VAT) and withholding tax to the Uganda Revenue Authority (URA) after selling a warehouse to the Electoral Commission. The company is instructed to deposit the funds in the IG assets recovery account at the Bank of Uganda.
Investigations by the IG revealed irregularities, including the issuance of withholding tax exemption certificates by URA officials, causing financial loss to the government. The IG report outlined that Space Holdings Limited neither declared nor paid the VAT to URA, and the company provided a false tax invoice to the Electoral Commission.
According to Muhairwe, the company’s actions were in violation of established procedures, as applications for waivers should be forwarded to the finance ministry by the URA Commissioner General. A URA tax audit in February 2023 identified the company’s tax liability at sh2.7 billion.
The IG’s findings also highlighted that Space Holdings Limited had requested a tax waiver of sh2.4 billion from the finance minister, Matia Kasaija, citing cash flow challenges. Despite receiving the funds, the company refused to remit them to URA.
The Space Holdings Limited managing director, Martin Mugarura, declined to comment when contacted.
