Business

Tax body loses Shs7b in illicit trade annually

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By Ismail Musa Ladu

Posted  Friday, February 1   2013 at  02:00

In Summary

The collections. Shs8.5 billion was collected out of seizures at tax collection points.

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Kampala.

The tax authority loses revenue worth Shs7.2 billion annually due to the government’s failure to control illicit trade. Illicit traders are increasingly using technology to manipulate customs clearance documents, making it difficult for Uganda Revenue Authority (URA) to meet its revenue collection targets.

URA manager in charge of prosecution, Mr Peter Muliisa, said the loophole should be fixed urgently. In the last half of the financial year, the URA enforcement department collected about Shs8.5billion out of seizures at tax collection points.
Normally, illicit dealings manifest in several forms including counterfeits, Local Tax evasion, and smuggled genuine goods for commercial and own use.

According to statistics the British American Tobacco, (BATU) whose product is one of the most smuggled, the economy (government coffers) and legal businesses lost about $9million in profits and what government could have gotten in form of revenue last year alone to illicit traders.

The Kampala City Traders Association (Kacita) said this is caused by lack of punitive laws. “We are doing our best to educate our traders against engaging in illicit trade, but the laws are letting us down,” he said.

Private sector Foundation executive director, Mr Gideon Badagawa, said business associations, like Kacicta and Uganda Manufacturers Associations among others, must develop a code of conduct that first internally deals with its errant members involved in illicit trade before the law takes it course.

Director of Public Prosecution (DPP) Mr Richard Butera has not only proposed a law that will claim the proceeds from illicit trade but also launched a guideline called Prosecutor’s manual on illicit trade.