In a high-profile crackdown on customs fraud, three Kampala-based businessmen have been remanded to Luzira Prison after being charged with masterminding a Shs 4 million tax evasion scheme, in a case that has sent shockwaves through Uganda’s freight and logistics industry.
The accused — Dick Kanakulya, Director of Lyon Shipping and Freight Company; Enock Tayebwa, hotel proprietor and entrepreneur; and Amos Kabetayo, a licensed customs agent — were arraigned before the Anti-Corruption Court on April 17, 2025.
The trio faces charges of fraudulent evasion of customs duties under Section 203(e) of the East African Community Customs Management Act, 2004.
The Alleged Offence
According to the prosecution, the men conspired to under-declare a consignment imported on March 13, 2025, through Entry No. UGKLCAS2967 at Nakawa Customs.
The goods — declared as just 20 cartons of Aimee PVC ladies’ handbags packed in a 40-foot container — were allegedly misrepresented to dodge the proper tax burden.
The Uganda Revenue Authority (URA) estimates the fraudulent declaration cost the government over Shs 4 million in lost revenue.
“These actions not only violate customs regulations but severely undermine efforts to increase domestic revenue,” said a URA official involved in the investigation.
Additional Charges and Court Proceedings
In addition to the primary charge, Kabetayo is accused of making a false declaration, while Tayebwa faces an extra charge of causing a false document to be made, in violation of Section 357 of the Penal Code Act. If convicted, they each face a maximum sentence of three years in prison.
All three suspects pleaded not guilty before Principal Grade One Magistrate Christopher Opit.
Their legal team requested time to explore a plea bargain with the Directorate of Public Prosecutions (DPP), leading to an adjournment of the case to May 15, 2025, for bail proceedings.
“This being a matter involving significant national revenue loss, the court must weigh justice with the rights of the accused,” noted Magistrate Opit during the session.
A Pattern of Economic Crime
The case comes amid heightened efforts by enforcement agencies to stamp out customs fraud and tax evasion. Just weeks ago, a separate case involving businessman Eric Oyonkulu resulted in a custodial sentence after he was caught with over 100 uncustomed mobile phones and power banks in Jinja District — goods worth Shs 13.7 million.
Though the scale of Oyonkulu’s offence was smaller, it set a tone for judicial intolerance toward economic crimes.
“Even for first-time offenders, imprisonment is appropriate where the offence is widespread and harmful,” the ruling in that case read.
Repercussions Across the Business Sector
The charges have put Uganda’s freight, logistics, and hospitality sectors under scrutiny. Kanakulya’s Lyon Shipping and Freight Company is a major name in the shipping industry, while Tayebwa is known for his stake in Nooks Hotel.
Kabetayo has served as a customs agent for years, raising questions about systemic gaps within customs clearance processes.
“This is a wake-up call,” said a logistics industry consultant. “It signals serious intent from regulators to go after those gaming the system — and that will have ripple effects on how companies approach compliance.”
National Impact
URA’s annual reports indicate Uganda loses more than UGX 1.2 trillion annually through smuggling and customs fraud.
With the government pushing to ramp up domestic revenue collection and cut reliance on external loans, high-value cases like this are viewed as crucial tests of enforcement resolve.
As the accused prepare for their next court appearance, legal experts suggest this case could set a landmark precedent in Uganda’s ongoing fight against economic crimes involving collusion between business operators and customs insiders.
