Tax fraud schemes in Uganda are currently taking on many faces as a means to avoid paying tax. Sadly, the key manipulators in this fraud scheme are tax consultants who are hired to manage the tax affairs of their clients but end up abusing this trust.
However, the Uganda Revenue Authority is alert and has thus developed a number of strategies to tackle this vice and deal with these unscrupulous consultants. For example, URA is heavily relying on intelligence led operations and through these a number of fictitious companies have been netted.
Recently, 7 companies involved in suspicious transactions like invoice trading were got like; Izimba Aaron,44 an accountant and director with Izimba & Company Certified Public Accountants. His actions, according to Stuart Aheebwa, the Supervisor Litigation at URA, caused tax loss worth UGX 2.8 billion as a result of falsifying trade invoices and misusing some of his clients Tax Identification Numbers(TINs). Izimba also allegedly changed the passwords of some of his clients TINs and transacted on their behalf.
On February 6th 2023, when Izimba appeared before the Anti-Corruption Court, he pleaded innocent to all the charges. However, he was charged.
Denis Kugonza, the Commissioner Tax Investigations encourages taxpayers to take interest in the affairs of their businesses so that they are not manipulated by their tax consultants.
“If the owner of the business commits an offense and it is later investigated and proven that he or she had knowledge of the crime committed by their tax consultant, they will equally be culpable,” he advised.
The taxpayers if found guilty will be VAT deregistered and their claimed Input VAT is disallowed by URA. Taxpayers should therefore be vigilant in knowing their rights and obligations.
According to the policy, section 62H(c)of theTax Procedures Code (Amendment) Act, 2022 explains that a taxpayer commits an offense if he or she makes a false or misleading statement in the information return. Upon conviction, the offense attracts a fine not exceeding 2500 currency points for each day of default or imprisonment for a term not exceeding ten years or both. Each currency point amounts to UGX. 20,000/=.
Additional Reporting by Immaculate Wanyenze
