NSSF collects Shs 6 billion from new members 

Patrick Ayota, the managing director of the National Social Security Fund, has issued a 30-day ultimatum for all employers to register with the Fund and remit social security contributions of their employees.

According to Ayota, employers who complete registration will not suffer any financial penalties that started in January 2022 when the National Social security Fund (Amendment) Act was assented to by President Yoweri Museveni and published in the Uganda Gazette.

The law spells out that any member who fails to meet his monthly contribution is liable to a penalty of 10 per cent per month on the outstanding amount that should have been contributed.

He said that given that the law came into force a year ago, employers should have registered and started remitting social security contributions to their employees effective January 2022. However, only 3,200 have registered with the Fund, according to the figures from the fund.

From June 2022 to February 2023, the fund collected Shs 6 billion from newly registered entities. Of the Shs 6 billion, 56 per cent of that money came from employers that employ less than five people. In tandem, the fund collected Shs 15 billion from the newly registered members.

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.

NSSF is targeting to register 50,000 new employers and 1.2 million new members over the next five years from the small and medium enterprises. The fund targets both employers and entities for this mandatory drive. The fund has provided multiple options for new members and employers to register with the fund and start making contributions.

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.

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.

“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,” Ayota said.