URA recovers Shs62.5b from fraudulent activities

The Uganda Revenue Authority (URA) tax investigations department has recovered Shs62.5b from tax from alleged fraud activities.
Speaking during a review of the tax collectors’ performance, URA Commissioner General Doris Akol, said the tax agency had in the financial year 2018/19, through the tax investigations department concluded investigations on 88 cases resulting into recoverable revenue worth Shs62.51b, warning that they will use all avenues to recover unpaid taxes.
The investigations have since resulted into the Ministry of Finance recommending cancellation of tax registration for involved taxpayers as well as blacklisting others.
Ms Akol said URA had implemented the compliance campaign under the “The Missing Trader VAT fraud scheme” as an initiative to deal with the rampant tax fraud.
This missing VAT trader fraud scheme involves theft of Value Added Tax (VAT) from government by fraudulent taxpayers who exploit gaps within the internal and or multi-jurisdictional trading.
Taxpayers have previously presented fake invoices seeking to claim VAT on purchases from traders who did not sell them any such goods.
This fraud scheme, according to Ms Akol, is executed by organised crime groups often consisting of professional tax agents.
While deliver his 2018/19 budget speech, Finance Minister Matia Kasaija, noted that one of the major challenges undermining tax effort was tax evasion with about 30 per cent of eligible VAT not collected.
This, he said, translates into a loss of about 4 per cent of tax to Gross Domesic Product (GDP), noting that about Shs1b had been recovered from companies evading tax and another 2,100 companies were undergoing comprehensive review to determine unpaid liabilities.
According to the annual revenue performance report, during the 2018/19 financial year, a number of compliance actions including 142 domestic tax compliance audits and 282 customs post clearance audit, 7,946 compliance advisories, 51 spot inventories, 2,752 compliance visits, 42 self-health and 3,766 returns were examined to determine whether taxpayers correctly assessed, reported and paid their tax liability.
During the same period, 88 rulings and convictions were secured, out of which 33 convictions were, 37 ruled in favour of URA. Twelve cases went in favour of taxpayers while six cases had split judgments.
Recoveries and enforcement

Recoveries were made through debt collection as a result of heightened enforcement, which involved issuance of warrants of distress, publishing of non-compliant taxpayers and signing of memoranda of understanding with different taxpayers.
In the custom department, enforcement interventions led to 9,152 seizures of which 8,000 were for dutiable goods and 1,152 for non-dutiable goods.
This yielded revenue worth Shs78 billion for which major recoveries were achieved from outright smuggling, undervaluation, mis-declaration, mis-description and false documentation.