A KCB Uganda’s client that is involved in a dispute with the Uganda Revenue Authority (URA) has landed the lender at odds with the tax collector prompting it to be struck off from the tax payment portal.

“The general tax paying public is informed that Uganda Revenue Authority has deactivated KCB from the URA portal with effect from December 21, 2016 pending resolution of key issues,” URA said Thursday.

In the statement to taxpayers, URA also advised them to seek services from other banks available on its portal.

Without revealing the reasons why it disconnected the bank, URA’s assistant commissioner for public and corporate affairs Sarah Banage told The EastAfrican that the matter was “serious” but added discussions were ongoing.

“This is the first time we have done this to any of the 25 banks that we work with; that means it was a serious matter,” she said.

“We could not continue; it felt important that we warn our taxpayers to use other banks” Ms Banage added.

URA allows banks to facilitate payment of taxes through its online portal.

The move is likely to cause unease among some KCB clients as it comes barely a week to the December 31 deadline when taxpayers are required to settle their provisional and presumptive income taxes.          

Third party

Responding to queries from The EastAfrican, KCB Uganda said that the bank had been caught up in a dispute between URA and a client that saw it receive a garnishee.

“KCB Bank Uganda Limited was identified as a garnishee in a court case involving URA and third parties. The Bank acted as garnishee in compliance with an order issued by the court in Kampala,” KCB said.

“KCB Bank Uganda Limited is actively engaging with URA to facilitate the reactivation of the bank on the URA portal,” it added.

A garnishee is a third party who is served with a court order to surrender money in settlement of a debt or claim.

KCB Uganda Limited is a wholly-owned subsidiary of Kenyan-based KCB Group.

It started operations in November 2007 and currently owns 16 branches spread across Uganda.

Besides Kenya and Uganda, KCB Group also has operations in Rwanda, Burundi, Tanzania and South Sudan.