The Independent Uganda: You get the Truth we Pay the Price
In addition, import substitution – where more locally produced goods that were imported in the past – reduced collections on international taxes.
Expert views
Analysts that The Independent spoke to agree with Akol that the Ministry of Finance, Planning and Economic Development is setting ambitious targets that may not easily be met despite the efforts that the tax authority is putting in to drive up tax revenue.
Ramathan Ggoobi, a senior economics lecturer at Makerere University Business School (MUBS) said that the government has lately become so ambitious in making targets as if Uganda is ending tomorrow.
As a result of that, Ggoobi said, government has been pushed to collect more domestically generated revenue instead of relying on borrowing.
He also said that URA keeps collecting tax from the same people (businesses) which have not even changed in terms of shape, magnitude and capacity.
Way forward
Ggoobi said instead of government giving unrealistic targets to URA, it must think about scaling down on its expenditure.
“I see a lot of things to cut,” he said. “Politics of Uganda has become too expensive for Ugandans to run,” he added.
He also said that there are many projects that have been created in recent times that are not benefiting the people but only those that are running them.
“I am an analyst…I have analyzed our budget and I can tell you that most project managers are hiding these recurrent expenditures under development budget,” he said. “They are buying cars, giving allowances and travelling abroad.”
He also said that there are also agencies that have hired so many people sitting in offices doing nothing and only ‘eating’ taxpayers’ money.
“The budget for politics and administration of the state needs to be cut,” he said adding, “we need to sequence and gradually implement these ambitions in the National Development Plan in addition to having budget discipline,” he said.
Gideon Badagawa, the executive director for Private Sector Foundation Uganda said that expanding the taxpayer register is critical and getting the informal sector to the formal economy is also important for growing the tax base and increasing tax revenue.
He, however, said there are things that must be fixed to support the growth of the economy that would translate into growth in tax revenue.
For instance, he said the youthful population must be fixed to get jobs in key sectors of the economy like agriculture and tourism which would ultimately result into more tax revenue.
“We need to set our priorities right,” he said adding, “ensure that politics does not drive business.”
He also said the government must work towards training and skilling the youth and women who benefit from government programmes. He said the training and skilling programme must also target the private and public institutions.
“It is from this that URA will be able to collect taxes from the thriving businesses,” he said.
Badagawa added that the government’s move to invest big in infrastructure like roads and power dams is a good step to facilitating growth of businesses that turnout to become good taxpayers.
He said the agriculture sector has potential to contribute tax to government for as long as there are moves to support irrigation, agriculture financing, agriculture insurance and more.
Important to note is the good news about the tax register that is slowly expanding. For instance, a total of 63, 979 new taxpayers were added onto the URA register in the first half of this year, which pushed the total number of taxpayers to slightly over 1.5million.
Analysts say that Akol and her team will now capitalize on the new taxpayers and the already existing ones on the register to try to collect the target for the second half amounting to Shs10.4trillion.
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