Shs9.7 billion lost in e-portal glitch, Auditor General says

The government is currently losing out on nearly Shs10 billion in non-tax income due to a bug that was found in the portal the taxman uses to clear imports, including general goods and automobiles.

A new government audit reveals that many imports remain uninspected for quality because the electronic-portal system, a stand-alone standards administration scheme used to clear imports, as well as collect tax revenues from them, is backdated.

The portal operated by the Uganda Revenue Authority (URA) and the ASYCUDA World systems, allows them to link with the Uganda National Bureau of Standards (UNBS) systems for quality control, according to Auditor General John Muwanga.

He explains that this bug gives the false impression that inspections were carried out prior to the shipments being routed to UNBS, preventing them from going through the required pre-verification of conformity (PVOC) processes.
PVoC
Enacted by the UNBS Act of 1983, the PVoC is an inspection and verification program carried out by the Uganda National Bureau of Standards (UNBS) through appointed inspection agents to ensure the quality and safety of imported goods entering Uganda while safeguarding consumers from substandard products.

Verification of compliance to technical regulations and standards is provided for in Article 5 of the World Organisation (WTO) Agreement on Technical Barriers to Trade (TBT).

A government evaluation conducted during the 2022/23 fiscal year discovered that 336 cases had avoided examination thus far, costing the state an estimated $2.63 million, or Shs9.7 billion, in lost non tax revenues.

This results from the items’ inaccessibility under the PVOC procedures, which would have allowed the state to collect non-tax revenues in the form of a 15 percent surcharge on the cost, freight value, and insurance. 

“Management [of UNBS] explained that three staff have been interdicted while investigations are on-going (both internal and by the Police criminal investigations department). I advised UNBS Management to expedite the investigations and take appropriate action,” Mr Muwanga stated in an audit report.

Helmsman Quality & Technology Services Limited, a Chinese enterprise, is among the providers of PVoC services in Uganda.

It was also previously investigated in August of last year by the Parliamentary Committee on Tourism, Trade, and Industry, which last month recommended that it be terminated because of concerns raised by the revelation that the company lacked offices in the two locations under supervision—Dubai and India.

The Committee also learned that the aforementioned firm, one of the six that UNBS hired for this job, does not have any offices in Uganda.

These discrepancies compelled the committee to call for investigations in the matter by the Director of Public Prosecution (DPP), citing apparent fraudulent processes.

The World Trade Organisation has contracted UNBS and other companies to inspect and verify goods in compliance with its requirements. 

These companies include Bureau Veritas Uganda, TUV Rheinland Middle East, Quality Inspections and Services Inc. Japan, and Societe Generale Desurveilance.