Incorrect Import and Export Prices Cause Uganda to Lose Millions

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Global Financial Integrity (GFI) found that $835 billion of the $1. 6 trillion in potential trade mis-invoicing among the 134 developing nations it studied in 2018 occurred between those nations and 36 advanced economies.

According to the Uganda Revenue Authority (URA), import overvaluation was most notable for cereals, vehicles, electrical machinery, plastics, and iron and steel items. While import undervaluation was most noticeable for used clothing, salt, stone and cement, chemical products, and pharmaceuticals.

Abel Kagumire, commissioner of customs for the URA, explains that the trade mis-invoicing is motivated by tax evasion, the payment of bribes and kickbacks, the avoidance of trade regulations, the exploitation of trade incentives, and the evasion of capital controls.

URA has also given the Customs department the ability to check whether financial transactions are legal in order to combat this vice. The process of auditing a trader’s invoice is lengthy and many traders opt to just pay the taxes and move on.

Monitor.

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