The informer reward regime has been strengthened by the decision of Honourable Justice Ssekaana Musa given in favour of URA in the matter of David Olaka Vs URA, where the reward claim of Shs241.53bn was dismissed.
The informer had initially provided information to URA and about tax evasion by MTN and had obtained payment in this regard from URA. He however came back for more, claiming his information resulted into a further Shs2.171bn tax recovery.
The Court ruled that URA receives all sorts of information and conducts routine audits which result in tax recovery and thus there is need for care to be taken in order to avoid mixing up information and rewarding a person who is not entitled to a reward.
The High Court further stated that mere receipt of information is not enough, but must be received following the due process, must be new and substantial in collection of revenue in question, in order to stamp out illegitimate rewards.
Court observed that URA may on receiving information on tax evasion use more skill and expertise to discover more tax loopholes which may result in recovery of more taxes and thus this should not be claimed as new information in order to give an informer money, lest all informers will start making endless illegitimate claims for rewards and gain unjust enrichment to the detriment of all Ugandans.
The case was dismissed with costs awarded to URA.
The Taxman pays 5% of the total tax recovered to all informers who give genuine information about non compliance, that results into recovery of revenue.
URA’s legal department headed by Patience T Rubagumya, the URA Commissioner Legal Services and Board Affairs has in recent months won several tax related cases against big companies.
