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The money was paid from the Shs120 billion that was recovered from tax defaulters.
Last year, URA increased the penalty for taxpayers who provide false or misleading statements about their businesses. The increment which took effect on July 1, 2022, was part of the penalties that were installed as a way to improve compliance. Defaulters face a penalty of Shs110 million as opposed to the previous Shs4 million.
The URA assistant commissioner of public and corporate affairs, Ibrahim Bbosa told Daily Monitor that they received 117 cases last year from whistle-blowers. From these cases, they assess unpaid taxes worth Shs180 billion but were able to collect only Shs120 billion. Hence the Shs3.5 billion payment to successful whistle-blower reports.
Under the Tax Procedures Code (Amendment) Act, 2022, URA is obligated to pay five percent or Shs100 million of the tax assessed to whistle-blowers on successful reports of non-compliant taxpayers.
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Rewarding whistle-blowers is a long-term measure through which the tax body seeks to improve tax compliance.
However, the tax body official said that tax evasion is sometimes sophisticated which can lead to prolonged investigations that can go on for years hence frustrating whistle-blowers.
Tax evasion also includes offenses against 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.
“Tax evasion can be sophisticated, leading to prolonged audits and or investigations. Some investigations take years to complete, especially when information is not readily available or the process involves lengthy litigation and objections. This makes informers particularly impatient and challenging to manage,” Bbosa said bj h