URA warns the public against tax evasion

Uganda Revenue Authority (URA) has so far recovered UGX 40 billion and arrested four culprits in the latest tax evasion scam according to Kugonza Denis Kateeba, the Tax Investigations Commissioner .

URA warns the public against tax evasion
Kugonza Denis Kateeba - URA Tax Investigations Commissioner

By John Kusolo

Uganda Revenue Authority (URA) has so far recovered UGX 40 billion and arrested four culprits in the latest tax evasion scam according to Kugonza Denis Kateeba, the Tax Investigations Commissioner .

A one Ssekamwa has been convicted to three years in prison while have requested for pre-bargain. Bwengye is still on trial in court. According to Kugonza, tax fraud is rampant in the country. The VAT scam technically known as missing trader, is a kind of fraud perpetuated by mainly companies or entities that involves formation of companies that in the real sense of the word have no visible or tangible business except fraudulently issuing invoices to reduce the VAT tax liability.

There is a big problem in the cash economy like ours where records and book keeping is not part of the transactions. Generally services, wholesale, trade and construction (including rental) sectors are the most problematic. Then there is also the media, advertising and transport industries among other sectors. URA is engaging landlords, especially for commercial buildings and wants them to keep records and prepare their accounts properly. After that they will be engaged about their tax obligations as well.

Some businesses can be real and indeed render services that attract VAT charge, but they don’t have expenses that will warrant input VAT. So they end up using fictitious invoices to reduce their tax liability. Lately, URA have been combating this kind of scam and have secured some convictions against some perpetrators of this scam.

Then there is the falsification or adjustment of invoices. This normally happens at the customs. Most of the time, invoices are adjusted downwards and that causes revenue loss. We are paying lot of attention here with an intention to crack if not eliminate this scam. Agnes Nabwire Asobola Assistant Commissioner Intelligence says revealed that middlemen are holding onto the tax and the system will be strengthened to avoid loopholes. Also, sensitization will be done on tax education so that the stakeholders are aware .

Kugonza says that URA is on high alert and any staff found in one way or the other to be involved in this scam, will face the consequences. Right now, there is no evidence to suggest that URA officials are involved. But in case there is evidence linking our staff to this fraud—the law will take its course. This scam is done in such a smart way that you cannot tell whether the invoices are forged or not. But URA is looking at all possible ways of verification especially from the source—where it is generated, and in real time. This will be through technology. Discussions in this regard are already under way.

URA prefers dialogue and enforcement will always be the last resort. Everything possible to exhaust this line will be done before switching to the next course of action . That said, there are laws that provide for prison sentences and penalties.Tax crimes can land you up to anything between three to 10 years in prison. Taxpayers are advised that the responsibilities of their business is solely in their hands including the tax liability.