Anti-Corruption court convicts top City businessman for VAT fraud


 

The Anti-Corruption Court, yesterday afternoon convicted Alikiriza Leonard, the Managing Director of Nyaks & Lenny Enterprises Ltd and Leds (U) Ltd on 6 counts of making false and misleading statements to a Tax Officer contrary to Section 58(1) (a) of the Tax Procedures Code Act, 2014 causing a tax loss of UGX. 497,397,982 in respect of LEDS (U) LTD and UGX. 1,980,032,566 in respect of Nyaks & Lenny Enterprises Ltd.

 

Alikiriza Leonard was jointly charged with Musisi Majidu an agent of Xing Dongmin and Hongai on two counts of conspiracy to commit a felony contrary to Section 390 of the Penal Code Act Cap 120. The accused were however acquitted on the charge of conspiracy.

 

This was a VAT fraud case which involved alleged transactions between the accused person’s companies (Xing Dongmin and Hongai) both being fictitious entities. The accused filed VAT returns purporting to have transacted with the two fictitious companies and claimed input tax credit on the basis of the said transactions.

 

The Prosecution presented 10 witnesses to prove

its case and Court found that Alikiriza as the Managing Director of both Nyaks &Lenny Enterprises Ltd and Leds (U) Ltd, knowingly and recklessly made false and misleading statements claiming to have hired trucks from Xing Dongmin and Hongai to transport limestone from Karamoja to Tororo Cement factory.

 

Alikiriza was accordingly sentenced to a fine of 150 currency points, 25 for each count or three years imprisonment in default for each count. He was also ordered to pay the taxes in respect of Leds (U) Ltd amounting to UGX. 497,397,982 and 50% of the taxes due in respect to Nyaks & Lenny Enterprises Ltd amounting to UGX. 990,016,283; a total tax of UGX. 1,487,414,265, within six months from the date of judgment.

 

A revision application, seeking 100% payment of taxes due for Nyaks & Lenny Enterprises Ltd is to be filed.

 

This is a major win in the fight against the vice of invoice trading which causes huge revenue losses. Great credit goes to our Tax Investigation Department for the thorough investigations and the unwavering dedication of our Legal Services and Board Affairs team that enabled us to secure this conviction.” – Patience T Rubagumya, URA Commissioner Legal Services and Board Affairs.

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