URA: Compliance, debt collection and fighting fraud yields sh383 bn

Kampala, Uganda | THE INDEPENDENT | Uganda Revenue Authority’s continued focus on compliance management, debt collection, customs enforcement and investigation of fraudulent schemes ensured the tax body saved sh383 billion in collections in 2018/19.

Compliance initiatives yielded sh151.18 billion, debt recoveries brought in sh92.45 billion, customs enforcement had sh78.48 billion saved while investigations were concluded on 88 cases resulting into recoverable revenue worth sh62.51billion.

At the end of the financial year, Uganda Revenue Authority collected sh16.6 trillion against a target of sh16.4 trillion – registered a surplus of sh259 billion.

Releasing the annual revenue figures in Kampala early this week, URA Commissioner General Doris Akol said efforts would be stepped up to change the tax paying culture in the country.

“To instill a taxpaying culture among taxpayers, URA shall take any errant taxpayers to court for prosecution to serve as examples to other taxpayers for non-compliance in their tax dealings. This shall be done in accordance with the existing tax law at hand and tax administration procedures” Akol said.

Akol said other than recovered monies,  several initiatives aimed at educating taxpayers on their tax obligations through customized and tailored tax education initiatives played a key part in the success of the past financial year. The new target for FY 2019/20 in now sh20.3 trillion. 

ANNUAL REPORT SUMMARY FY 2018/2019 

The compliance initiatives that resulted in sh151.18 billion recovered were:

• 142 domestic tax compliance audits and 282 customs post clearance audit
• 7946 compliance advisories
• 51 spot inventories
• 2752 compliance visits
• 42 self-health and 3766 returns were examined to determine whether taxpayers have correctly assessed, reported, paid their tax liability and fulfilled other obligations in line with laws and regulations.

Prosecution

Eighty eight (88) rulings and convictions were secured, out of which thirty three (33) were convictions, thirty seven (37) cases ruled in favour of URA , twelve (12) cases ruled in favour of taxpayers and six (6) cases had split judgement representing an average success rate of 80% against a target of 65% performing at 123%.

Recoveries from the Debt Collection Unit

The total debt recoveries amounted to sh92.45 billion against an annual target of sh80 billion representing a performance of 1115.56%. These were recoveries made by our Debt Collection team as a result of enforcement action taken like; issuance of warrants of distress, publishing of non-compliant taxpayers and signing of M.O.U under the facility of allowing taxpayers to pay the outstanding tax liabilities in instalments.

Customs Enforcement

Enforcement interventions led to 9,152 seizures of which 8,000 were for dutiable goods and 1,152 were for non-dutiable goods. This yielded revenue worth sh78.48 billion.

Recoveries were majorly as a result of offences like; outright smuggling, undervaluation, mis – declaration /mis – description and false documentation. The top most risky items included: electrical cables, rice, neutral spirit, garments, chewing gum, textiles, wines, footwear, motor vehicles and motor cycle spares motor vehicles, foot wear, hardware items, rice, wheat flour, motor vehicle tyres, textiles and kitchen ware, garments, printed circuit processing equipment.

To reduce on these offences, URA have implemented a number of measures like; purchase of more electronic seals, deployed scanners at all major boarder points and implemented valuation controls on tariff specification codes by origin. URA are hopeful that these initiatives will enhance risk management and contribute to URA’s capabilities to manage transit supervision, combat smuggling and other customs offences.

Investigation of Fraudulent Schemes

A number of initiatives was implemented  to reduce on tax fraud. The Tax Investigations Department (TID) concluded investigations on 88 cases resulting into recoverable revenue worth sh62.51bn.

URA rolled out “The Missing Trader VAT fraud scheme” which involves the theft of Value Added Tax (VAT) from Government by organized fraudulent taxpayers who exploit the way VAT is treated within internal and or, multi-jurisdictional trading.

In this scheme, taxpayers’ present invoices seeking to claim VAT back on purchases from traders who did not sell to them such goods. This allows the fraudster to fictitiously reduce their VAT payable. This fraud scheme is executed by organised crime groups often consisting of professional tax agents.

URA registers biggest surplus in history https://t.co/2MOfGRYCXe pic.twitter.com/vVNcndes8O

— The Independent (@UGIndependent) July 15, 2019