The informer reward regime has been strengthened by the decision of Justice Ssekaana Musa given in favour of Uganda Revenue Authority ( URA) in the case in which an informer, David Olaka had taken the tax body to court.
Olaka 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 Shs 2.171 billion tax recovery.
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 upon receiving information on tax evasion use more skill and expertise to discover more tax loopholes which may result in recovery of more taxes.
The court said 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.