Four Charged as URA cracks down on Tax Evasion Racket

Four people have been charged in the Anti-Corruption Division of the High Court with tax evasion.

According to a statement released by the Uganda Revenue Authority (URA) Tax Investigations Department, the four are part of a tax evasion racket involving invoice trading and missing trader aided by several tax consultants and companies.

The suspects include; James Ssekamwa Kulubya, Timothy Musoke, Kyambadde Enock and Bwengye Michael William.

The department said that on Friday April 1, 2022, office premises and homes of the four suspects (tax consultants/individuals) were searched where information and exhibits were recovered to aid in the investigation.

“All the four suspects were arrested, interviewed and their statements recorded. They were detained at different gazetted police stations in Kampala pending imaging of their electronic devices and production in court,” the statement read.

The statement further revealed that Kulubya, a resident and LC1 chairman of Bukasa Bukulu village, Buloba Parish Wakiso Sub-county in Wakiso District, was charged with 8 counts of making false statements to a Tax Officer contrary to Section 58(1)(a) of the Tax Procedure Code Act, 2014 as amended.

He pleaded guilty on all the 8 counts as laid out in the charge sheet and was convicted on his own plea of guilt.

He was sentenced to a fine of One hundred fifty (150) currency points for each count on counts 1 to 7 and custodial sentence of 3 years on count 8.

Kyambadde and Muskie were charged with one count of making false statements to a Tax Officer contrary to Section 58(1)(a) of the Tax Procedure Code Act, 2014 as amended.

Both pleaded not guilty and were granted a cash bail of Ugx.2,000,000 each and each of their sureties bonded Ugx.5,000,000.

They are supposed to appear in court again on May 3, 2022 for mention of their case.

Bwengye, on the other hand, was charged with one count of making false statements to a Tax Officer contrary to Section 58(1)(a) of the Tax Procedure Code Act, 2014 as amended.

He pleaded not guilty and was granted a cash bail of Ugx.10 million and each of his sureties given a non-cash bond of Ugx.200,000,000.

He is supposed to appear in court again May 6, 2022 for mention of his case.

Commenting on the same, Ibrahim Bbosa, the Assistant Commissioner Public and Corporate Affairs at URA, said that the suspects have been consulting with more than 20 reputable companies, saying investigations are still ongoing and probably more could be unearthed.

“We have fraud that ranges in billions (50Bn) loss and it’s climbing,” Bbosa said.

He noted that the maximum sentence for dealing in fraud is 10 years.

However, Kubulya was given three years because he pleaded guilty and didn’t waste court’s time.

Between 2006 and 2015, Trade Misinvoicing alone contributed to a revenue loss of $6.6Bn (Shs24.9Tn), according to the 2018 Global Financial Integrity (GFI) Scoping Study on Illicit Financial Flows.

Losses from potential over and under invoicing of imports like worn clothing, salt, stone and cereals, amounted to $4.9Bn (Shs18.5Tn) while $1.7Bn (Shs6.4Tn) was lost through exports like grains, seeds, gold and fruits.

A total of $732M (Shs2.5Tn) on average was lost annually.