The Uganda Revenue Authority (URA), responsible for tax collection, has expanded its taxpayer count from 1.7 million to 4.4 million in the last few years but still has not yet achieved its goal of reaching 10 million.
It has pointed out several challenges in this effort, including limited resources and pushback from traders regarding tax enforcement.
At the Uganda Revenue Authority Integrity Forum, traders in the city expressed various challenges that negatively affect their businesses. They contend that these problems not only obstruct the expansion of the tax base but also diminish their profits.
“The primary issue we must address is excessive taxation. For example, during the lockdown, import duties were raised from 25 to 35 percent. Such steep taxes create difficulties for traders, and they are actively trying to combat these hurdles to remain afloat.
Consequently, they end up spending considerable amounts to clear their goods, which leads to the necessity of bribing to ensure sufficient profits,” stated Godfrey Katongole, Chairperson of the Kampala Arcade Traders Association.
On the other hand, URA’s Commissioner General, John Musinguzi, attributes these difficulties and cases of corruption to a lack of manpower within the authority, which currently has only 4,000 employees to serve a population of 50 million.
Conversely, URA remains hopeful that despite the limitations on the current number of taxpayers, tackling corruption will allow them to attain their goal of 10 million tax contributors, up from the current 4.4 million. Reaching this goal will aid in alleviating the tax burden.
“Over the last four years, we have raised our tax base from 1.7 million taxpayers to 4.4 million, and we are continuing this trend. Our objective is to achieve at least 10 million taxpayers—not just in number, but ensuring that taxpayers are onboarded, supported, and educated so that everyone contributes their fair share.
Once we achieve this figure, we will engage with the Ministry of Finance to propose adjustments to lower some tax rates, because by then we will have a sufficient base to ease the burden on all for the betterment of the nation,” Musinguzi explained.
To enhance accountability, URA set up the Integrity, Compliance and Ethics Division four years ago, where the minimum penalty for misconduct is termination.
