Uganda: Fuel Tax Avoidance Operation Uncovered
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Monday, 09 February 2009 |
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A fuel dumping and smuggling racket that could have cost the government
huge sums of money in evaded taxes has been exposed following an
investigation by Uganda National Bureau of Standards.
Among the suspected culprits are officials working with Shell Uganda
Ltd, the market leader in petroleum products in the country. UNBS’
investigation established that Shell has recently been in possession of
suspected smuggled and untaxed fuel. The discovery followed a routine
check at Shell Malindi in Kibuye and Shell Kaazi in Najjanankumbi both
located on Entebbe Road in Kampala.
Under current regulations, fuel destined for the Ugandan market is
supposed to be marked at the border by adding a special chemical
technically known as a ‘marker’. This is meant to differentiate fuel
for the local market from fuel in transit. Once a marker is
added, it would also mean that customs duties have been paid while the
fuel in transit does not attract such dues. To ensure compliance, UNBS
does spot checks from time to time.
Mr Ivan Kyayonka, Shell’s country director said “the only thing we have
discovered is that UNBS has under-marked our product. The
reconciliation between us and URA is clear; we paid all taxes,”.
In this particular case, dumping, a process where fuel on transit to
other countries is deliberately offloaded and sold would occur, while
smuggling implies the fuel arrived into the country illegally. URA
officials declined to comment on the saga with the tax body’s
spokesperson, Mr Paul Kyeyune referring us to the Assistant
Commissioner in charge of Trade, Richard Kamajugo.
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