"You are producing Fake Items"- Digital Number Plate Company Sued Over Fraud & Tax Evasion

A concerned Ugandan citizen, Kagingo Muhammad Brutus, has petitioned the High Court, seeking an interim injunction to stop the implementation of the digital number plate project and the collection of automated express traffic penalties. He cites widespread fraud, legal irregularities, and conflicts of interest surrounding the initiative.

In his petition, Kagingo challenges the legitimacy of Joint Stock Company Global Security, the firm contracted to deliver Uganda’s contentious digital number plate system. He claims the company was deregistered by the Uganda Registration Services Bureau (URSB) for failing to file annual returns for over five years and therefore had no legal status when it was granted the multi-billion shilling contract.

Kagingo further asserts that the company was never gazetted as required by law before it began collecting traffic-related fees, raising serious doubts about the legality of the now-suspended Automated Express Penalty System (AEPS).

He alleges the entire process is plagued by irregularities, including the questionable legal standing of Global Security, lack of transparency in the enforcement process, and the apparent absence of VAT on receipts from penalties — a possible sign of tax evasion. According to him, these receipts do not appear in the Uganda Revenue Authority’s Electronic Fiscal Receipting and Invoicing System (EFRIS), indicating non-remittance of Value Added Tax (VAT).

Kagingo also points to a potential conflict of interest involving Attorney General Kiryowa Kiwanuka, who, while serving as the government’s chief legal officer, is also a partner in K&K Advocates — the firm representing Global Security in court. He argues that this dual role undermines public trust, as the Attorney General is tasked with defending a company accused of defrauding citizens.

During a hearing before Deputy Registrar Simon Zirintusa Kintu, state representatives — Mark Muwonge from the Attorney General’s chambers and Richard Babigamba from K&K Advocates — raised preliminary objections. They argued that Kagingo had wrongly sued two Russian nationals, Ivan Shkardan and Makhmutov Damir (Global Security directors), in their personal capacity instead of suing the company as a corporate entity.

The registrar instructed both parties to file written submissions ahead of a ruling scheduled for July 10, 2025.

The digital number plate initiative, introduced in June 2021 by Security Minister Maj Gen Jim Muhwezi, is part of President Museveni’s broader ten-point security strategy to combat urban crime. The project requires motorists to install GPS-enabled number plates at their own expense.

The 10-year contract was awarded to Global Systems LLC, a Russian firm, under a revenue-sharing model initially favoring the company (70% to the company in the first two years), gradually shifting towards the government over time.

However, the project has faced fierce criticism, legal pushback from lawyers such as Male Mabirizi and Isaac Ssemakadde, and growing public concern over harsh traffic fines, data privacy, and national security risks.

Amid mounting protests and backlash on social media, the Ministry of Works and Transport recently suspended the AEPS system, citing the need for a comprehensive review. “Effective midnight tonight, the AEPS implementation is suspended,” the ministry announced in a statement issued Wednesday evening.