Members of Parliament serving on the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE) have expressed worry about the increasing amount of tax arrears, totaling sh5 trillion as of December 2023, which Uganda Revenue Authority (URA) has yet to collect.
This concern arose following a query outlined in the December 2023 Auditor General’s report, which noted a rise in tax arrears from sh4.8 trillion in 2021/2022 to sh5 trillion in 2022/23. Notably, government agencies constitute the largest proportion of entities failing to remit taxes owed.
During a session with the committee, URA Commissioner General, John Musinguzi, attributed this trend to the impact of the COVID-19 pandemic on various businesses.
Musinguzi highlighted, “I think the major factor is global, the impact of COVID-19 on businesses. When COVID-19 emerged, the Government implemented measures to ease the burden. Some of these interventions included allowing taxpayers to pay in installments and waiving penalties and interest. However, despite these efforts, there are businesses that haven’t fully recovered due to prolonged closures and loss of markets. Consequently, the portfolio of tax arrears continues to grow.”
In response to queries, Musinguzi also defended the implementation of the Electronic Fiscal Receipting and Invoicing System (EFRIS), citing Uganda’s annual loss of approximately sh4 trillion in uncollected Value Added Tax (VAT).
His explanation came after Medard Sseggona (Busiro East) questioned why URA’s enforcement of EFRIS had caused disruptions in the business community, leading to a confrontation between President Museveni and traders at Kololo. Sseggona described this standoff as an embarrassment for Uganda.
