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MPs to probe telecoms tax evasion allegations

By Mary Karugaba

Added 9th August 2019 12:38 PM

This was after an investigation by URA in 2013/14 financial year established that 85 customs entries of imports by telecom companies had been wrongly classified attracting duty at a rate of 0% instead of attracting 10%, causing a tax liability of sh3.1b.

MPs to probe telecoms tax evasion allegations

Uganda Revenue Authority officials: Dicksons Kateshumbwa (L)Commissioner Customs, James Odong(C) Assistant Commissioner Process Management and Doris Akol(R) Commissioner General appearing before August 08, 2019. Photo by Miriam Namutebi

This was after an investigation by URA in 2013/14 financial year established that 85 customs entries of imports by telecom companies had been wrongly classified attracting duty at a rate of 0% instead of attracting 10%, causing a tax liability of sh3.1b.

TAXATION   TELECOMMUNICATION 

KAMPALA - The parliamentary committee on Commissions state authorities and state enterprises has instituted a team to investigate allegations of billions of shillings lost in tax evasion by telecommunication companies.

The Committee chaired by Kawempe South MP Mubarak Munyanwa on Thursday put Uganda Revenue Authority (URA) on notice and asked that the Commissioner General Doris Akol and her team provide a schedule of the companies' imports.

This was after an investigation by URA in 2013/14 financial year established that 85 customs entries of imports by telecom companies had been wrongly classified attracting duty at a rate of 0% instead of attracting 10%, causing a tax liability of sh3.1b.

During the meeting, URA officials informed the MPs that out of the sh3.1b tax, the assessment worth sh848m was taken to the Tax Arbitration Tribunal.

URA Commissioner Custom Dickson Kateshumbwa also informed the MPs that one of the telecom companies MTN submitted additional information and on further review, the assessed amount in reference to the Marconi radio transmission totaling to sh81m was cleared owing to the fact that it was classified under a different code as equipment capable of carrying out the transmission.

"In Court, MTN conceded in part to the issues and in a consent order in 2017 agreed to pay sh204.7m. The rest of the issues with the disputed tax amounting to sh643.8m were fully adjudicated upon completion by TAT and the Court ruled in favour of the taxpayer," he said.

Kateshumbwa explained that the wrong coding was a result of technology at the time. "This was new technology in 2005 and at that point of importation. It was at the point of audit that we would discover the problems. But we have since improved," he said.

MP Theodore Ssekikubo argued that given that MTN conceded to some figures, there could have been collusion.

When MPs tried to discuss issues of tax evasion by telecom companies, Munyagwa ruled that the discussion be postponed since there's going to be a comprehensive investigation into the matter.

"I have already written to the speaker of Parliament. We shall discuss all these issues when the committee starts the investigations," he said.

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