Faced with a huge twenty-two billion tax liability, a group of Asian investors are said to have falsely declared themselves broke, sponsoring a fraudulent liquidation process, climaxing into the dissolution of their car importation business, all in the name of dodging to pay Caesar what belongs to Caesar, the Investigatorreports.
Without prejudice to the instant foreign investors’ defence, their case is reminiscent of the dubious scenarios where after enjoying numerous years of incentives granted to them by their key promoter, President Yoweri Museveni, they have in the past closed down their businesses, left the country, only to return under camouflage, and landing yet a new set of more handsome incentives. Yes, from the same Man with The Hat!
Uganda’s economy has gone from being an oasis to a desert after several European countries and their powerful financial agencies closed down their cash aid taps, on account of the Anti-gays law. The above state of affairs has since impelled the government of Uganda to become more tougher on tax defaulters and tax collection generally, seeking to bridge the gaps left yawning by the aid cuts launched by the development partners and their powerful financial agencies, in revenge to the President’s ratification of the Anti-gays law.
Before controversially going out of business, the Asian investors in question were trading under the name and style of Crane Auto, dealing in importation and sale of Japanese-made cars. Apart from Uganda, the foreign investors on spot, reportedly operate similar businesses in the United Arab Emirates.
Seeking to be paid what is due to the government of Uganda from them, Uganda Revenue Authority (URA), has now dragged the Asian foreign investors to the Uganda’s Commercial Section of the High Court. Also technically on trial, is the private law firm which conducted the controversial liquidation proceedings, culminating into the dissolution of Crane Auto, facilitating them to wind up, going away without paying taxes due to the government of Uganda.
Appearing before the Court’s head judge, Justice Stephen Mubiru, the team of internal URA lawyers insisted the liquidation was a sinister plot to deny taxes to the government of Uganda. The lawyers requested the judge to remove the veil from Crane Auto or to order its associate companies to meet the taxes due on Crane Auto’s behalf.
Demonstrating Crane Auto investors’ purported dishonesty, URA attorneys told Justice Mubiru how they started off by applying for voluntary winding up, owning up to a tax liability equaling to more than eight hundred million shillings. But that the Asian foreign investors would later make a suspicious U-turn, sponsoring a highly suspicious liquidation process, ending up declared insolvent, hence dodging even paying what they had initially acknowledged to owe to the government of Uganda.
But Counsel Nelson Nerima, representing Crane Auto, argued that reversal of the company’s winding up was no longer possible. Nerima, practicing with the law firm of Nambaale, Nerima and Company Advocates, likened the reversal of Crane Auto’s winding up as alluded to by URA attorneys, to reversal of death which has already happened. “The company is dead my Lord, you cannot cause it’s resurrection,” Nerima submitted.
Court heard that the liquidator gave much time and even physical audience to URA for them to table the actual tax Crane Auto owed to government but that the tax body neglected to do so, ending up caught by the deadlines within which they were legally meant to present the tax liability to the liquidator for settlement. Court is yet to deliver the landmark ruling regarding whether a company dissolved through the process of liquidation can still pay taxes under certain circumstances.
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- Mr. Stephen Kasozi Muwambi is a seasoned crime investigative writer, majoring in judicial-based stories. His two decades’ experience as a senior investigative journalist has made him one of the best to reckon on in Uganda. He can also be reached via [email protected]
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