The Independent Uganda: You get the Truth we Pay the Price
Bigger problems
Saka said that taxpayers continue to devise different ways to avoid or even evade taxes. He said, in addition to other challenges causing revenue shortfalls, URA’s failure to collect more tax is being hindered by slow disposal of the cases in courts of law.
He said over Shs 1 trillion is yet to be collected pending adjudication in the Courts and Tax Appeals Tribunal.
“We have also had an increased challenge in the numerous numbers of ex-parte or at times inter-party interim orders issued against Uganda Revenue Authority,” he said, “adding since January, 2016, to date, we have so far been served with interim orders stopping us from collecting over Shs 550bn.”
Saka said that they also have a challenge of subsequent attachment of the bank accounts of the organisation (both operational accounts and the tax collection accounts) through ‘Garnishee Orders’, which not only greatly impairs their work as tax collectors but also affects remittance of funds to the consolidated fund hence negatively affecting government operations and delivery of service.
He said that they have further received some orders instructing URA to release unaccustomed goods or lift ‘third party agency notices’ without any form of security for the unpaid taxes deposited with the URA or the Court.
“This state of affairs is of great concern to us as an organization which is tasked to collect revenue to support government programmes and budgets,” he said.
What next?
Experts say URA’s search for more money requires; a very strong economy that would attract more new taxpayers (big businesses); enhancing URA’s capacity to deal with tax evaders; identifying new sources of taxable areas without killing businesses and ensuring fiscal discipline or avoiding wastage expenditure of collected revenue by spending agencies of government.
In an interview with The Independent on Mar.02, Norbert Kagoro, a partner at Deloitte, an audit firm, said the tax body has consistently recorded increase in revenues yearly but said more needs to be done efficiently.
Beyond URA, he said there is need for increasing production and productivity and so is exports and reduce imports.
“There is also need to attract more foreign investors which all would increase taxable areas and save the country from recording shortfalls,” he said.
Saka said they have noted an increase in imports at the beginning of this year, a scenario that would see revenue collections increase in the coming months.
He also said they expect to collect more corporation tax in the coming months because companies are now able to make their investment decisions basing on full year (2017) performance.
He also said the reduction in the central bank rate by Bank of Uganda from 9.5% to 9% on Feb.13 would necessitate reduction in lending rates and give chance to those that borrow to pay taxes.
Key numbers
- Shs 324bn; revenue shortfall for first half of FY2017/18
- Shs 15 trillion; FY2017/18 revenue target for URA
- Shs 8 trillion; Revenue collected as at January 31, 2018
- Shs 1 trillion; uncollected revenue locked in court cases
- Shs 736bn; amount that government wants to borrow to pay salaries and fund other programmes
- Shs 48bn; amount of money government wants to borrow to pay salaries
