Digital number plates company sued over fraud, tax evasion

A concerned citizen, Kagingo Muhammad Brutus, has petitioned the High court seeking an interim injunction to halt the ongoing rollout of digital number plates and the collection of automated express traffic penalties, citing fraud, illegality, and conflict of interest in the process.

In his suit, Kagingo alleges that Joint Stock Company Global Security, the firm contracted to implement Uganda’s controversial digital number plate project, is fraudulent and non-existent in law.

He claims the company was struck off the Uganda Registration Services Bureau (URSB) register for failing to file returns for over five years and was not legally recognised when it was awarded the multi-billion shilling contract.

He further argues that Global Security was never gazetted, as legally required, before it began collecting traffic-related fees, casting doubt on the legality of the now-suspended Express Penalty System (EPS).

Kagingo states in his affidavit that the entire process has been riddled with irregularities – from the dubious legal standing of the contractor to the opacity of the penalties being levied on motorists.

Missing VAT, conflicts of interest

Kagingo also accuses the firm of tax evasion, alleging that traffic penalty receipts are not reflected on the Uganda Revenue Authority’s Electronic Fiscal Receipting and Invoicing System (EFRIS), suggesting non-remittance of Value Added Tax (VAT).

Kagingo further alleges a conflict of interest involving Attorney General Kiryowa Kiwanuka, who, while serving as the government’s chief legal adviser, is also a partner at K&K Advocates, the law firm representing Global Security in the case.

He argues that the same Attorney General charged with upholding public interest shouldn’t be the same person to defend a company accused of defrauding Ugandans, saying it undermines public trust in the country’s legal institutions.

When the interim application came up for hearing on Wednesday before deputy registrar Simon Zirintusa Kintu, the state represented by Mark Muwonge from the Attorney General’s office and Richard Babigamba of K&K Advocates raised preliminary objections, seeking dismissal of the application with costs.

They argued that Kagingo had improperly listed two Russian nationals, Ivan Shkardan and Makhmutov Damir, directors of Global Security, as individual respondents instead of suing the company as a legal entity.

The registrar directed both parties to file and exchange written submissions, with a ruling on the interim injunction expected on July 10, 2025.

The digital number plate project was announced in June 2021 by Security minister Maj Gen Jim Muhwezi, as part of President Yoweri Museveni’s ten-point security master plan to combat urban criminality.

Every motorist would be required to install tracking-enabled number plates, at their own cost. The 10-year contract was awarded to Global Systems LLC, a Russian firm, with a revenue-sharing model heavily tilted in the company’s favour 70 per cent to the company in the first two years, shifting to an even split in year four, and eventually 70 per cent to government from year six onwards.

But the rollout has been marred by legal challenges, public outrage over harsh penalties, and concerns about data privacy and national security. Legal heavyweights Male Mabirizi and Isaac Ssemakadde have also filed suits challenging the project.

Following a wave of protests and social media uproar, the ministry of Works and Transport this week announced the suspension of the Automated Express Penalty System (AEPS) with immediate effect, citing a “comprehensive review.”

“Effective tonight at midnight, implementation of AEPS is suspended,” the ministry said in a late Wednesday statement.