URA Tax Investigations Crack Down on Fraudulent Customs Exemption Claims

In a renewed push to protect national revenue and uphold tax integrity, the Uganda Revenue Authority (URA), through its Tax Investigations Department, is cracking down on a disturbing trend of fraudulent customs exemption claims involving forged documents and false project declarations.

Investigations have revealed that some taxpayers are deliberately forging subcontract agreements and misrepresenting government-funded projects as donor-supported in order to unlawfully access tax exemptions on imports such as construction materials, machinery, and vehicles.

“These exemptions are designed to support real development—not to enrich fraudsters through deception and forgery,” a senior URA investigator stated.

Modus Operandi: How the Fraud Is Committed

In most cases under investigation, perpetrators submit fake or altered subcontract agreements to justify claims that they are implementing donor-funded projects. In reality, the projects are entirely financed by the Government of Uganda, and the claimants have no legitimate contractual role.

By falsifying documents and misrepresenting the funding source, the perpetrators attempt to illegally secure duty-free importation privileges. Several fraudulent cases have already been linked to government infrastructure projects—particularly in the road and bridge construction sector—where documentation was fabricated to imply donor involvement.

Investigators have recovered forged letters of subcontract, manipulated project correspondence, and even altered financial agreements in applications for exemptions. In some cases, entities falsely claimed to be executing work under World Bank or African Development Bank funding, only for cross-checks to confirm 100% GoU financing.

Legal Consequences: Fraud Is a Crime

URA is reminding taxpayers that such acts amount to fraud, punishable under Section 203 of the East African Community Customs Management Act, 2004.

Those found guilty of submitting false declarations, forged documentation, or obtaining customs exemptions through misrepresentation face:

Prosecution and criminal charges

Heavy financial penalties

Revocation of exemptions

Seizure and forfeiture of imported goods

To date, the Tax Investigations Department has instituted enforcement measures, including:

Seizure of goods falsely imported under exemptions

Cancellation of fraudulently granted exemptions

Initiation of legal proceedings against culprits

Ongoing administrative reviews for flagged importers

URA is also working closely with government ministries, agencies, and development partners to authenticate project documents and funding sources, ensuring only genuine claims are approved.

Recommendations: Strengthening Systems and Promoting Compliance

To curb this growing abuse, URA—through its Post-Clearance Audit (PCA) and Tax Education divisions—is calling on all taxpayers, contractors, and importers involved in government or donor-funded projects to uphold the highest standards of transparency and integrity.

Key recommendations include:

Stronger vetting of all exemption applications through inter-agency collaboration.

Mandatory document verification with funding agencies and project implementers.

Public education campaigns targeting contractors and suppliers about lawful exemption procedures.

“Exemptions are not entitlements—they are privileges extended in good faith to support Uganda’s development agenda,” said a PCA official. “URA will not tolerate abuse of this system by a few dishonest actors.”

Public Engagement: Whistleblower Protection and Community Role

URA is also urging members of the public and private sector stakeholders to report suspected cases of customs fraud through its anonymous whistleblower platforms, which guarantee full confidentiality and protection of informants.

This citizen-driven vigilance, combined with stricter oversight and real-time document authentication, will ensure that tax incentives serve their intended purpose—supporting national development and promoting equitable growth.

Conclusion: Integrity First, Fraud Nowhere to Hide

With tighter enforcement, improved cross-agency coordination, and heightened public awareness, URA is closing the loopholes that dishonest taxpayers have long exploited. The authority reaffirms its commitment to supporting legitimate taxpayers while sending a clear message: fraudulent claims will be detected, punished, and permanently disqualified.

As the economy grows and public services expand, safeguarding revenue is no longer optional—it’s a national imperative.