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URC Managing director Sendegeya before COSASE

Uganda Railways Corporation Owes NSSF Shs2.8billion

by Max Pat
posted onFebruary 17, 2022

Members of Parliament are concerned how Uganda Railways Corporation (URC) accumulated a debt of over Shs2.8billion in unpaid remittances to National Social Security Fund (NSSF).

The MPs sitting on the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) made the observation while meeting officials from URC led by the Managing Director, Stanley Sendegeya on Thursday, 17 February 2022.

Sendegeya told the committee that the corporation has for the two years struggled to pay staff salaries, creditors who include suppliers and this has subsequently affected their remittances to NSSF, a figure that has risen to over Shs2.8billion.

“The fact is that there is no money right now. URC has been struggling to pay staff until recently when we managed to reduce the arrears. The other burden is how to clear NSSF. We are having discussions with NSSF to be patient as we plan to remit the arrears in bits,” Sendegeya said. He called for Government’s support to fund URC for the next two years to enable them gain financial equilibrium for sustainable growth.

Hon Charles Bakkabulindi (NRM, Workers’ Representative) blamed URC for failing to prioritise social welfare of their employees during future retirement. “It is unfair that URC continues to deduct five per cent from their employees’ salaries and yet they are not meeting their 10 per cent obligation to form the required 15 per cent remittance to NSSF. NSSF should use the law that we recently amended to compel URC to pay the money,” Bakkabulindi said.

According to COSASE Chairperson, Hon Joel Ssenyonyi, URC employees are losing out on the annual NSSF interests accrued from their savings because of adamancy from their employer to remit their contributions to the fund.

“It is not making sense that URC with a net worth of Shs3.5 trillion is struggling; the entity cannot pay creditors, staff and NSSF. The entity is worth so much but struggling to pay so little,” Ssenyonyi said.

As amended by Parliament last November, section 13 (A) of the NSSF Act now provides a tough deterrent penalty to employers who deduct a voluntary contribution from employees and fail to remit to the fund. In accordance with the new law, an employer who offends this section will pay 20 per cent of the amount deducted but not remitted as a fine.

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