Falsifying tax statements will cost your business Shs110m    

Ms Diana Kisaka speaks addresses taxpayers during the post budget engagement in Fort Portal city on Friday. PHOTO| ALEX ASHABA

What you need to know:

  • The penalty for a taxpayer who provides false or misleading information to Uganda Revenue Authority about his or her business has been increased from shs4m to Shs110m.

Uganda Revenue Authority (URA) has said taxpayers who provide false or misleading statements about their businesses will face a penalty of Shs110m. 
The penalty, which has been raised  from Shs4m, is part of the larger pool of penalties that will take effect on July 1 as a way of improving compliance. 
Other penalties relate to offences committed against the Electronic Receipting and Invoicing System (EFRIS) and Digital Tax Stamps, which will require an offending taxpayer to pay 1,500 currency points or imprisonment not exceeding 10 years or both. 
   
Each currency point translates into Shs20,000, which means that such an offence committed under EFRIS and digital tax stamps will attract Shs30m.
Offences against EFRIS and digital tax stamps will include failure to fix or activate tax stamps, forgery of EFRIS invoices, interfering with EFRIS control devices, failure to use EFRIS, forgery of tax stamps and printing over or defacing tax stamps.
Another form of penalty of 2,500 currency points or Shs50m will apply on a taxpayer who fails to file information relating to automatic exchange of information, maintain records for purposes of automatic exchange, making false or misleading statements in the information exchange and omission of a statement made in the information return.

Speaking at a regional taxpayer post budget engagement in Fort Portal City, Ms Diana Mwondha Kisaka, the URA acting commissioner domestic taxes, said the new penalties were among the tax amendments that will apply during the 2022/23 financial year. 
The amendments, she said, seek to improve revenue collections and enforce compliance given that there is a big mismatch between the number of Ugandans on the URA register and estimates of income generating activities. 
Therefore, Ms Kisaka said, the penalties will act as a deterrent measure as well as improve compliance.
“We have decided to increase this penalty. Some people give false information to URA. If we discover we shall impose a penalty of Shs110m on your business,” she said. 

The penalties will be key is helping URA to realise its 2022/23 financial year tax collection target of Shs25.6 trillion. 
The Shs25.6 trillion collections will seek to fund the 2022/23 Budget of Shs48 trillion of which about 53 percent, is expected to be financed by tax and non-tax revenues sourced internally.
Mr John R Musinguzi, the URA commissioner general, said the current tax register has about 2.4 million taxpayers while estimates indicate that there are about seven million people who are engaged in income generating activities. 
This, he said, indicates that majority of Ugandans, who should be contributing to the tax basket, have found a way not to. 

However, Mr Musinguzi noted, the introduction of the digital tax stamps and EFRIS will partly improve the collection of local Excise Duty and Value Added Tax, noting that use of digital tax stamps will enable tracking and tracing of a product right from production or importation through distribution to consumption. 
URA has been introducing a number of digital tax solutions some of which have already been implemented while others are being built.  

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