With dwindling revenues from international trade taxes, the focus for Uganda Revenue Authority (URA), according to the Commissioner General, Mr John Musinguzi Rujoki, will focus on domestic tax collection.
Speaking at the post Budget E-Conference yesterday, Mr Rujoki said the Coronavirus disease (Covid-19) has rapidly changed the way the tax prefect operates, necessitating the tax body to adapt accordingly.
He said: “We can no longer rely only on international trade and foreign assistance. We need to look within us as a country for sustenance.”
Over the years, the contribution of international trade taxes has been steadily declining partly as a result of Uganda entering into a common external tariff with several countries in the region as well as at the continental level.
Once the Customs Union is introduced as is the case within East African Community (EAC) and other continental blocs, the same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country they are entering.
Also strides made in import substitution, though not on a massive scale, explain declining international revenue collection.
According to the new Commissioner General, as an instituion that strives to better her capabilities to transform, transition and build a versatile culture for its future, URA has started another season of growth with a new strategic direction: Collecting taxes generated domestically.
Impact of Covid-19
Despite the impact of the pandemic resulting into a revenue deficit of more than Shs2 trillion, he said URA will seek good practices in and beyond the industry and foster a culture of innovation.
“We shall be committed to promoting novelty and be ready to share good practices locally, regionally and internationally. We will continue to apply risk management principles to focus our efforts on areas where we will have the biggest effect on compliance,” Mr Rujoki said.
“We shall consistently pay attention to rules and regulations and take responsibility for our actions through. Note that URA has capacity to detect fraud and those on that side of the fence, will face the law,” he said.
He said implementing tax education and nurturing SMEs will be top on the agenda. This will be in addition to strengthening accountability and transparency.
According to the director economic affairs at the Ministry of Finance, Mr Moses Kaggwa, government will limit borrowing to reduce pressure on the budget.
Ms Jane Nalunga, SEATINI Uganda executive director, noted that leakages in double taxation agreements should be closed, exemption and tax holidays should be audited.