Ugandan employers; pay NSSF contributions within 30 days deadline or face penalties

29 March 2023, 4:35 pm

Byamukama Alozious >

Director Patrick M. Ayota at the center and other officials from NSSF, SME’S and Law society at the press conference on Tuesday in Kampala

For the future safety of workers, Employers in Uganda have been urged to pay National social security Fund also now as NSSF irrespective of the number of workers employed

The deadline commands that within only 30 days, employers should have registered with the National Social Security Fund (NSSF) and remit social security contributions for their employees, NSSF Managing Director Patrick M. Ayota has announced.

Ayota addressing the press at Workers House in Kampala on Tuesday morning said that employers who complete registration will not suffer any financial penalties that kicked in from January 2022 when the National Social Security Fund (Amendment) Act was assented to by President Yoweri Museveni and published in the Uganda Gazette.

“Given that the law came into force a year ago, employers should have registered and started remitting social security contributions for their employees effective January 7, 2022. However, only 3,200 have registered with the Fund. We, therefore, call upon unregistered employers across the country to take advantage of the next 30 days to regularize their status with the Fund,” Ayota said.

The employer registration drive is being undertaken to operationalise the new provisions in the NSSF Act, as amended, specifically Sections 7 and 13 A that introduced mandatory contributions by all workers regardless of the size of the enterprise or the number of employees, and section 13A which introduced voluntary contributions.

The NSSF is targeting to register 50,000 new employers and 1.2 million new members over the next 5 years.

Ayota said that unlike in the past when the definition of an employer was ambiguous, the NSSF Act, as amended, now provides clarity on who is eligible to pay NSSF for their employees

“Section 1(d) of the NSSF Act, as amended, defines an employer to include the Government, a company registered or incorporated under the Companies Act, 2012, a partnership registered under the Partnership Act, of 2010, and a trustee incorporated under the Trustees Incorporation Act, Cap. 165.”

“It also includes a business registered under any other law for the time being in force governing the establishment of business entities, the governing body of an unincorporated association; and a manager or a subcontractor who provides employees for the principal contractor. All employers that fall within these categories should register with the Fund,” he said.”

Ayota added that it makes good business sense for an employer to fulfill their social security obligations because an NSSF clearance certificate is now becoming a requirement before any company can do business with the Government or government agencies.

“We have established partnerships with most Government agencies to ensure that employers must first regularize their status with NSSF before they do business. In addition, we are establishing partnerships with all regulatory agencies to ensure that before any entity is given a license, they have a clearance certificate from NSSF that proves their registration and compliance with the NSSF Act.

For any business in Uganda, it makes perfect business sense to fulfill their social security contributions,” Ayota said.

Employers have multiple options to conveniently register with the Fund and start contributions through the online self-service channels via the NSSFGo Mobile App and Web App. Physical Registration is also available at all branches in all major towns countrywide. Employers require their URA Tax Identification Number (TIN) and URSB Business Registration Number (BRN).

Speaking at the same media conference, the Uganda Law Society Chief Executive Officer, Moses Okwalinga Opolot urged employers to register with the Fund to avoid onboarding avoidable financial penalties.

“In practice, the penalty for non-compliance with NSSF is very burdensome because it is compounded every month an entity does not pay. For the legal fraternity, NSSF compliance is already a requirement by the Law Council before a practicing certificate can be issued. For our members in the legal fraternity, the advantages of compliance are very evident,” he said.

John Walugembe, Executive Director of The Federation of Small and Medium Enterprises-Uganda also urged their members to take advantage of the window offered by NSSF.

“There are opportunities in regularizing registration with NSSF, especially for the Small and Medium Enterprises who currently dominate Uganda’s business terrain, but also face many challenges. I urge our members to take advantage of this opportunity provided by the Fund to register so that we are not caught on the wrong side of the law,” he said.