Three Indians who are directors of Wellex Hardware Limited led by Jigar Chandarana were convicted by the Anti-Corruption Court in Kololo for generating and selling fictitious invoices.
They were convicted on 5 counts of making false statements to a tax officer contrary to Section 58(1)(a) of the Tax Procedures Code Act, 2014.
Each of the accused person was sentenced to a fine of shs 20,000,000 or to face Five (05) years imprisonment in default.
Accordingly, URA’s lawyers were able to secure shs 102,878,055 in taxes which Wellex Hardware Limited agreed to pay fully as assessed.
According to information obtained by this website, investigations into the tax affairs of Wellex Hardware Limited commenced in 2022 after URA’s intelligence received information about an Indian businessman that was suspected of trading tax invoices among different companies that registered for VAT purposes.
The availed information further indicated that the directors of Wellex Hardware Limited were at the top of this syndicate where they made sales to their clients/consumer but generated and sold a number of tax invoices to beneficiaries for a commission.
However, it is also revealed that the directors oftenly declared these fake invoices as output VAT in the period between 2018-2022 till their criminal activities were ended by URA’s tax investigations team.
Some of the beneficiaries of this tax crime syndicate include China Railway No.3 Engineering Group Ltd (CR3) a wholly owned subsidiary of China Railway Group Limited, one of the biggest construction enterprises in the world.
The company is also ranked among the Fortune Global 500 and is listed on the Shanghai and Hong Kong stock exchanges.
It is stated that China Railway No.3 Engineering Group Limited claimed input VAT of shs 211,869,259 from fictitious purchases of shs 1,117,051,439 and thus causing revenue loss to the government of Uganda.
The URA Commissioner of Tax Investigations Denis Kugonza has often called out taxpayers to be on high alert and distance themselves from dealing with such unscrupulous individuals.
Their involvement in these kinds of tax fraud schemes have consequences to not only the unsuspecting taxpayers, but on the entire economy.
He also encourages taxpayers who have any outstanding tax liabilities to come forward and fulfill their obligations before the end of this Financial Year 2022-2023.