Uganda: Car Dealers Evading Tax – URA
Car dealers in Uganda who are unregistered importers are set to face the wrath of Uganda Revenue Authority as the tax body moves in to catch tax evaders.
Last week, the tax body said more Ugandans were importing cars in the pretext of owning them, but when they reached the country they would sell them without paying tax on the income earned. URA says these are mostly civil servants and private sector employees who are not registered as car dealers, and are thus evading taxes.
Speaking to car bond owners in Bugolobi recently, URA officials said the trade was lucrative. URA assistant commissioner for compliance Silajji Kanyesigye said some Ugandans imported cars almost every month yet they didn’t declare them as business.
“We know them,” Kanyesigye said. “And those importing vehicles without registering for VAT are going to be handled as they clear at the border. We have realized some people have been doing business without paying taxes,” he added. Most Ugandans import used cars from Japan.
Patrick Mukiibi, the commissioner for investigations at URA, described the tax evasion as a “growing trend and an issue that we have to handle once and for all.”
Mukiibi said this had been happening for many years. He was speaking at a workshop were URA sensitized car dealers on how well they could work with the tax body.
Patrick Opolot, a URA official, said when you looked at the transaction with customs, the records were good but when you checked in domestic taxes, it was realized that some vehicles were either under-declared or not declared at all.
The tax body also said that some car bond owners were reluctant to withhold taxes from agents. Some bond owners, the tax body said, were not remitting PAYE from their employees.
“A vehicle is worth Shs 150m, but you record that it was sold at Shs 75m for you to pay little tax,” Opolot said.
Meanwhile, car dealers blamed URA for its slow system. They said sometimes it took them a week or more to clear a vehicle because the electronic system is always off.
