Agent Banking Plays Increasing Role in Tax Collection, URA Reports Growth
Highlights:
- URA Records Significant Revenue Growth Through Agent Banking
- Agent Banking’s Expanding Role in Uganda’s Tax Collection
- Bank Agents Facilitate Tax Revenue Surge, URA Reports
Agent banking is playing an increasingly important role in tax collection, as reported by the Uganda Revenue Authority (URA) on Tuesday, October 10, 2023. URA’s finance supervisor, Mr. Ainamaani Tearemwe, made this revelation during a meeting with Housing Finance Bank agent banking agents.
According to Mr. Tearemwe, URA has experienced substantial growth in revenue collections through agent banking. Housing Finance Bank alone has been contributing nearly Shs9 billion in monthly collections. This achievement has been attributed to the accessibility and flexibility offered by agent banking services. However, some taxpayers have expressed concerns regarding the associated transaction costs.
Mr. Tearemwe stated, “We collect Shs8.8 billion in the form of tax and non-tax revenue monthly through Housing Finance Bank’s agent banking system. The money was paid through an average of 3,500 transactions per month.”
Over the years, URA has introduced various payment platforms to facilitate tax payments, including mobile money, online payments, real-time gross settlement electronic fund transfers, and cash payments through bank agent banking.
Agent banking has played a crucial role in extending access to banking services, with the number of agents surpassing 26,800, shared among 22 different banks, as reported by the Bank of Uganda.
Bank of Uganda recently highlighted the rapid growth of agent banking since 2017, contributing to improved access to formal financial services across Uganda. In 2017, there were only 139 agent banking outlets, but by 2019, this number had grown to 11,000. In 2021, it expanded further to 23,000 and had exceeded 26,858 agents by June 2022.
Bank of Uganda emphasized that, as of June, 22 financial institutions were on the agent banking shared platform. This growth trend presents opportunities for financial inclusion and positively impacts various key performance indicators.
