Impact of NGO Act 2016 (“the Act”) on your operations

 

Dear Esteemed Client,

It is estimated that there were about 13,000 NGOs in Uganda as at July 2015. Ugandan law had gaps in dealing with the registration status of NGOs. By way of a statutory instrument, the NGO Act 2016 came into force on 14th March 2016.

This Act repealed the NGO Act, Cap 113 as amended in 2006.  Various press reports have given conflicting information on the interpretation of the various provisions of the NGO Act 2016.

We set out below some key clauses and areas of concern;

  1. The Act establishes an NGO Bureau with powers to consider all applications for permits, blacklist and revoke existing permits. This Bureau will also have branch offices. The NGO Bureau is given broad inspection powers.
  1. All nongovernmental organisations in Uganda must incorporate. This changes the registration status of all currently registered NGOs. This means all NGOs must attain legal personality before a permit is renewed or issued by the NGO Bureau.
  1. Some NGOs are exempt from the mandatory registration process for a set time period.
  1. The relationship between registered organisations in Uganda and their foreign affiliates is to be carefully scrutinized.
  1. All Community Based Organisations (CBOs) must be registered. Further CBOs are to operate only at sub county level. Therefore you should take care to partner and or contract with registered CBOs.
  1. NGOs will have representatives at all levels of the NGO Monitoring process. Further NGOs are permitted to be self regulating.
  1. NGOs are allowed to have both not for profit and commercial or business activities. However there are tax implications for engaging in commercial activities which we are happy to explain.
  1. Filing of Annual Returns is mandatory. Further special obligations are imposed on all NGOs in Uganda including; restrictions on areas of operation.
  1. Dissolution of NGOs is well provided for in the Act. Further inactive or dormant organisation shall be closed.
  1. A detailed appeals process from decisions of the NGO Bureau or district NGO monitoring Committees is provided for in the Act. This changes the old system of complaints and appeals.

 

The NGO bureau is working together with the Uganda Revenue Authority, the Financial Intelligence Authority and other security agencies to have a road map on all active and inactive NGOs in Uganda.

Please note that there is an urgent need to be fully compliant with the legal regime including the tax component.

Quality assurance mechanisms have been designed to assist not for profits self regulate and have better fundraising opportunities with donors.

 

In case you have any queries or if you require clarification on this and other legal issues, please contact us via email – info@africalawassociates.com

Please let us know if you need assistance with aligning your operations with the new Act and with other regulatory requirements.

 

Disclaimer: This Alert is not intended to constitute legal advice which can only be given having regard to particular facts and circumstances. This is intended to provide general information and is subject to terms of engagement with ourselves. Always seek professional advice from a qualified lawyer on any specific legal problem or matter.