Govt losing millions in fake insurance stickers

By Faustin Odeke

The Government and insurance companies in Malaba and Busia are losing millions of shillings in revenue to unscrupulous clearing agents who forge Third Party insurance stickers and temporary road licenses paid on imported cars.

The scam was exposed last week when the Police in Malaba intercepted seven cars destined for Kampala from Mombasa with forged stickers of Leads Insurance Corporation pasted on them.

Paul Okongo, the Malaba traffic officer, said out of the 15 cars in the convoy, eight managed to elude arrest and proceeded to Kampala.

The impounded cars parked at Malaba Police Station include two Toyota super customs, two Toyota Noahs, one Premio and two commuter taxis.

“These people get a genuine insurance sticker of a particular company, scan it and then duplicate it into several copies,” said Okongo.

He said Saidi Mirad, the convoy leader of the impounded cars, has recorded statements with the Police, while John Mwebe, the clearing agent at the center of the forgery is on the run.

Okonge said the Police is organising an operation to crack down on the vice.

He said in case of an accident, the driver and passengers of vehicles without genuine insurance would not be compensated.

Clearing agents who preferred anonymity said the scam is common, adding that vehicles with forged sticker are usually driven at night.

 Each car entering Uganda is charged between sh50,000 and sh57,000 for temporary road license and 25,000 for insurance stickers.

Godfrey Rutaro of Aisha Trading Company that imported the cars said he sent sh1,815,000 to Mwebe to secure third party insurance, but he was surprised when the vehicles were impounded.

Ziporah Katoko of Leads Insurance and Simon Etyang of National Insurance Company said for the past two days, they have only cleared two cars yet they see hundreds of cars crossing from the parking yard with insurance stickers on them.

Geoffrey Baluku, the executive director of Paluku Agencies, a clearing firm in Malaba, said they have lost businesses to junior firms because they connive with fraudsters and clear cars for as low as sh4,000.

“Many agents no longer charge clearing fees on the cars because they are comfortable with the forgery,” Baluku noted.

Uganda Revenue Authority (URA) officials at the border refused to comment on the matter.

But a source who preferred anonymity confirmed that the fraudsters are costing the tax body millions of shillings in tax evasion on temporary road license.

The source further revealed that URA is currently carrying out an audit to establish how much is lost in such deals before they can device means to tackle the problem.