How 3,600 bags of rice destined for Kenya ended up on local market

What you need to know:

  • Tax evasion. The commodity is said to have evaded export duties.

Kampala.

On January 3, 2017, Mr Chris Ssengoba Salongo did not anticipate that he would spend the third day in the New Year behind bars.

On that day at about 11 pm, Mr Ssengoba was arrested by Uganda Revenue Authority (URA) enforcement officers and taken to the Jinja Road Police Station to record a statement.

Mr Ssengooba’s crime, according to URA was evasion of export duties. He had sold rice meant to be re-exported to Kenya in Uganda without paying duties.

These are charges he denies.

On October 7, 2015, Gloree International Limited imported goods among them rice into the Ugandan market.
The rice had been imported from Pakistan.

Gloree had not paid taxes on the goods so they remained warehoused until taxes were cleared.

For imported goods to be sold on the Ugandan market, they have to be cleared by URA after payment of import duty.
On three occasions, Mr Ssengoba is alleged to have bought consignments of goods – including rice – from Gloree International.

According to an investigation report by URA, Mr Ssengoba bought 520 bags of rice on July 13, 2016.

At the time, the goods were declared by Ssengoba as being destined for the Kenyan market as re-exports.

On June 2, 2016, Ssengoba is alleged to have bought another 1040 bags from Gloree International under consignment number UGKLA E 13084.

On the same day, he acquired another 1040 bags of rice from the same company.

“The same goods were sold to Mr Chris Ssengooba Salongo while still warehoused and were declared for re-export to Kenya on Entry No. UGKLA E 13087 of 2nd June 2016,” the URA enforcement investigation report reads, in part.

On that same day, the rice was loaded on a truck number KAU 605P/ZD 7284 destined for the Kenyan border town of Busia before being allowed into the Kenyan territory.

Rice never left Uganda
“There were no records at Busia in the export books to prove that the goods were received at the station on the side of the Kenya Revenue Authority (KRA).

The KRA had no corresponding Inward Rotation numbers, the supervisor KRA at Busia categorically stated that Kenya has never received rice imports from Uganda between June 2016 and December 2016,” the report reads.

In other words, the rice never left Uganda at all.
For a period of three months, URA started investigations into this transaction.

With the help of informants and associates of Ssengooba – they were able to track at least 3,640 bags of rice valued at about Shs300m meant to re-exported into Kenya were now in the Ugandan market.

On June 2, 2016, instead of the truck delivering rice to Kenya, the rice ended up at Ssengooba’s stores along Martin Road, Old Kampala. He has able to put the rice on sale in Uganda without payment of duties, which URA officials say causes price distortions and loss of revenue to the tax body.

“In this market, people are allowed import rice and re-export it. When goods are warehoused, it is not until tax payments are made that they can be allowed on the market.

“However, in this case, the rice was declared as re-export to Kenya – subject to Kenyan import taxes – so there was no payment of URA taxes,” Ms Agnes Nabwire Waiswa, the assistant commissioner enforcement at URA told reporters on Wednesday.

She noted that diversion of goods causes price distortions because the culprits are able to sell their goods at much lower prices, compared to those who have paid their dues to the taxman.

For two months, URA officials had trailed Mr Ssengooba until January 3, 2017 when the arrest was made.

Claims refuted
However, Mr Ssengooba refutes these claims.
“I have never bought those tonnes of rice being mentioned. URA has been misinformed about this transaction. I did not break the law because I have always paid my taxes. Yes I did buy rice, but it was never from Pakistan and I cleared all the taxes with URA,” he claims.

In his denial, he blames rogue clearing agents who are using traders Tax Identification Numbers (TINs) to purchase goods and divert them from their intended destination. Mr Ssengooba is expected to be arraigned in court today.

The offender
More info. The investigations by URA reveal that Ssengooba was found with extra bags of rice that were never bought from Gloree Investments.

They also reveal that he was a repeat offender and had been engaged in this business for a while. URA is not sure how many bags of rice Ssengooba has traded illegally since he started engaging in the business. The only consignments that URA could trace were three.

Other informants and arrested associates who URA talked to told them that this was not the first time Ssengooba was engaged in this practice. However, according to him, the first time he bought rice, it was only 48 bags and he has since abandoned rice trade.