URA to collect over Shs660 million in penalties for tax evasion

Since the beginning of February 2024, the authority has imposed penalties on 110 entities found in violation of the EFRIS regulations.

The enforcement efforts are not limited to EFRIS violations but extend to breaches of the digital tax stamps system. In a notable operation yesterday, URA's enforcement team in Arua confiscated over 8,000 cartons of vodka and whiskies from a concealed warehouse in Arua city, lacking the required digital tax stamps. This single operation is projected to generate upwards of Shs50 million in fines.

The crackdown on tax evasion comes amid repeated calls from the Uganda Alcohol Industry Association for the government to clamp down on illicit alcohol production. Such operations do not only dodge taxes but pose significant health risks to consumers due to the absence of standard quality checks.

In response to these challenges, the Ugandan government, through URA and the Uganda National Bureau of Standards (UNBS), introduced the Digital Tracking Solution (DTS) in 2020. This system aims to combat the illegal trade of regulated products by ensuring that all products have digital tax stamps for easy tracking and verification of standards throughout the supply chain.

This initiative is part of a broader revenue mobilization effort by URA, which started in January 2024. It involves over 201 officers conducting spot-checks for compliance with the EFRIS system, the use of digital tax stamps, and investigating rental tax defaults. Enforcement actions are taken against VAT taxpayers evading enrolment in EFRIS and manufacturers bypassing the Digital Tax Stamp requirements.

Sandra Kaitare, the Assistant Commissioner of the Petroleum and Mining Division at URA, highlighted the penalties for non-compliance.

VAT taxpayers avoiding EFRIS registration face a 6 million Shilling penalty, applicable monthly. Manufacturers failing to affix digital tax stamps to their products are subject to fines and confiscation of goods until compliance is achieved.

Vodka and whiskies are among 13 categories mandated to carry tax stamps since 2019, facilitating accurate excise duty payments. Other products under this directive include beer, soda, bottled water, and various beverages and commodities.

Kaitare emphasized that while penalties are an essential tool for enforcement, the primary objective remains the smooth operation of businesses and the promotion of fair trade practices. The success of URA's enforcement efforts is measured by the reduction in the number of non-compliant taxpayers, aiming to foster a compliant and healthy business environment in Uganda.

This content was created with the help of an AI model and verified by the writer