Tax Appeals Tribunal Ruling Highlights Withholding Tax Breaches and Global Money Flows Within Watoto Network » The Hoima Post –

A multi-year comparison of Watoto Child Care Ministries’ filings in the United Kingdom (UK) for the years 2020 to 2024 have revealed a pattern of escalating financial and governance red flags.
A Tax Appeals Tribunal (TAT) ruling of November 2025 has revealed that Watoto Child Care Ministries has engaged U.S based companies linked to senior figures within Watoto Network to provide consultancy, fundraising, music and technology services without remitting withholding tax as required by law.
Paid huge sums, the companies linked to or controlled by James Skinner, a board member across entities in the US, UK and Canada. James Skinner is the son to Gary Skinner, the founder of Watoto Child Care Ministries but retired in 2023 in Uganda.
Gary Skinner however remains a board member in the U.S entity, which oversees international funding flows to Uganda.
Other members of the board of Watoto in UK are Julius Rwotlonyo as chairperson, Jane Penry (Board member), Gary Skinner (board member and founder of Watoto Kampala, Uganda), Ramson Walsh (board member), and Derek Watt also a board member.
Records in the tax case show that the Companies that supplied Watoto Child Care Ministries (WCCM) but as hidden vendors include Makefield Group Business Advisory & Technology, Creative Lab Academy; Heritage Philanthropy Gift of Love Video Production and Scratch Creative.
According to TAT, the companies provided services to WCCM as consultancy, fundraising, music and video production, information technology services and software, music lessons, photography and branding which were deemed by the Tribunal to be consumed in Uganda and therefore taxable as imported services to Uganda.
It is stated that the said companies linked to James Skinner were paid directly by either Watoto Global and or Watoto Childcare Ministry, Inc which argument had been fronted by WCCM in Uganda to challenge the Shs594 million tax assessments on imported services by Uganda Revenue Authority (URA).
In a November 2025 decision, the Tax Tribunal held that payments to the service providers were made from WCCM’s income even though they were paid directly by the donors or by their partner offices. In their defence against the payment, WCCM argued that payments were made directly by donors or partner entities outside Uganda.
According to the ruling, the payments which directly benefited the WCCM or were payments which were dealt with as the ministry directed, hence the payments constituted income sourced in Uganda.
In February 2022, URA’s assessment focused on VAT on imported services, arising from foreign-provided services benefiting Uganda, alongside discrepancies in withholding tax treatment.
Pursuant to the filings, the taxman reviewed the WHT declarations on International payments in relation to its VAT declarations and initiated an audit with the aim of establishing why VAT on imported services was not accounted for during the period January 2017 to December 2021.
Following the audit, URA issued an assessment for undeclared VAT on imported services of Shs594,171,271 for the period January 2017 to December 2021.
TAT heard that WCCM had not accounted for VAT on imported services such as consultancy, website design and maintenance, software subscription, and video production services while WCCM vainly argued that it did not pay any consideration for the services donated to it by foreign persons.
In a twist of events, UK filings acknowledge that Watoto UK trustees exercise significant influence within the Watoto Uganda structure, raising questions about independence and oversight.
Watoto UK filings also report a sudden 116,608 Pounds in travel expenses reimbursed directly to trustees or senior officers in 2024 after reporting zero in the previous year which amounts to an unusually large insider expense line for charity with 1.12m Pounds in annual income and that one that invites conflict of interest.
“…the accounts qualify a large pass through flow to Uganda: 618,802 Pounds granted to Watoto Uganda in 2024 and 45,552 Pounds due at year end. In the restricted funds note, the charity states that 90 percent of sponsorship income is sent directly to Uganda, 100 percent of appeals of visit Watoto monies are passed to Uganda – suggesting the UK entity is largely a fundraising conduit that retains a share for UK operations,” says a governance expert.
The expert says that the accounts identify a Watoto Global Network of related parties 11,186 Pounds paid out to related parties and 192,882 received from related parties in 2024 which suggests that the entity money movement within a network thereby raising transparency and governance questions.
Watoto Child Care Ministries, a U.S -registered charity closely affiliated with Watoto Church in Uganda.
UK 2025 filings indicate that approximately 18 percent of sponsorship income is retained in the UK to cover operational costs.
But observers say that the UK based institution simultaneously moved a low cost virtual office hence operating without a physical office thereby raising questions on how authorities monitor their operations.
“Two expense lines alone – travel reimbursements of 116,608 Pounds and engagements costs of 170,966 Pounds – together exceeded the amount retained under the charity’s stated sponsorship cost structure. Overall, the charity spent 55 percent of all donation income on UK costs, a ratio that is severely of line with charity sector norms and calls into question its fundamental efficiency and commitment to maximizing funds for its charitable purpose in Uganda,” reads a summary of the organisation’s own published numbers.

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