''The law provides  for a tax exemption on the employees contribution to the retirement funds. This should be extended to cover the funds' investments as these determine the interest to members, which would in return encourage savings'', a participant at the Alexander Forbes financial services seminar for trustees said.

The Uganda Revenue Authority (URA) charges a 30% corporation tax on  retirement fund investments according to the Provident Fund Act. URA has also extended taxation to retirement funds in government security such as treasury bills and bonds which were initially exempted from taxation.

Yet a number of pension funds invest in  government securities for the security they offer. The taxation is limiting voluntary pensions and retirement top-up schemes to the National Social Security Fund.

Alexander Forbes  Financial Services  held the seminar to acquaint  trustees with internationally-accredited practises. Craig Bentley, the chief operations manager of Alexander Forbes  Financial Services  East Africa, said: Trustees can be sued for mistakes that can lead to losses of the members’ funds. That is why they need to familiarise themselves with the best practises.

Bentley said trustees are expected to seek advice from experts in areas like fund administration and investment if they are not well versed with them.  Uganda has the worst performing pension sector in east Africa, a condition that has worsened the scarcity of long -term funds whose main source in a number of economies is pension and retirement  funds. The country is also  yet to get proper regulations and a regulator for the pension sub-sector, an issue that is currently being advocated by the insurance industry .


Keywords:  uganda banking society