Expert to Uganda: Change revenue collection model

URA officials load impounded goods onto a truck. A tax expert has said Uganda and other African countries have to review their revenue collection models if they are to hit targets. Photo by Abubaker Lubowa.

What you need to know:

Uganda’s tax contribution to the economy has stagnated at 12.5% in nearly over a decade.

Uganda will have to review its tax revenue model if it is to increase the number of taxpayers, a senior tax expert has advised.

According to the Director of Institutional Development at The African Tax Administration Forum (ATAF), Mr Lincoln Marais, Uganda and other African states should embrace revenue collection models that are not just easy to comprehend but also fair across the board.

“What is your revenue collection model like?” Mr Marais asked while responding to a question on how Uganda and other African countries could increase its revenue collections without burdening the tiny formal sector that is already shouldering the biggest tax responsibility.

He continued: “You must be transparent in your application. Provide taxpayers with all the necessary information related to tax matters. And you must ensure that paying taxes is made easy. And taxpayers must at all times know that as a tax body, you have the ability to enforce compliance.”

Speaking last week to some African journalists in Johannesburg, South Africa, Mr Marais said unless African countries get the right tax model, they will keep grappling with revenue collection targets. He, however, was of the view that ATAF is willing to help its members across the continent fix the problem—a reason why ATAF was created.

Worth noting is that over the years, Uganda has been growing its revenue collection rather steadily, although its (tax) contribution to the economy has stagnated at 12.5 per cent in nearly over a decade.

This, according Mr Godfrey Akena, a tax analyst with East African School of Taxation, is explained by the Uganda Revenue Authority (URA) inability to widen its tax base over the same period of time.

To deal with that, ATAF’s Head of Multilateral Cooperation Thulani Shongwe, argues that the population must begin to demand that revenue authorities be part of the segments that demand value for taxes they collect.

With that, Mr Shongwe says that compliance will be boosted, making tax collectors’ jobs easy.

Earlier, the G20 Communiqué in a meeting in Johannesburg, South Africa, endorsed proposals for automatic exchange of tax information between member countries and also made a call for all countries to pursue similar policies. “Developing countries should be able to reap the benefits of a more transparent international tax system, and to enhance their revenue capacity, as mobilising domestic resources is critical to financing development,” reads the G20 leaders’ communiqué.

This debate forms part of wider campaigns to boost tax revenue for individual members’ countries especially in the developing countries like Uganda.

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