URA moots plan to tax the rich

Sunday April 08 2018

Kampala.

Uganda Revenue Authority (URA) could boost its revenue collections if its plan to ensure that every Ugandan pays their tax due is effected.
The tax collector has severally been blamed for doing little to widen the tax base thus burdening a small section of taxpayers.
A research conducted by URA indicates that High Net Worth Individuals or the extremely rich people, according to Ugandan standards, believed to be about 10,000, are among a category of taxpayers, who do not fully meet their tax obligations.
“They are in several categories,” said Ms Susan Nakato, a URA researchers, who was part of the people that conducted the study on taxing High Net Worth Individuals.
The report was presented to experts, civil society and other stakeholders in Kampala last week.
“There is a category of civil servants and politicians. Many of these often have modest salaries but they have amassed unexplained wealth. And they do not pay taxes on that wealth,” Nakato said.
Many of the High Net Worth Individuals are politicians, among them MPs, who recently challenged a proposal by URA to tax their allowance, on ground that it is not income.
Others in the fold, the study says, include lawyers, architects and engineers and artistes, among others.
According to Mr Ronald Waiswa, another URA researchers, there is no universal definition of High Net Worth Individuals but such people invest heavily, especially in real estate.
“For this category of people it seems it is safer to invest in real estate sector. And in Uganda it is so easy for them to acquire and register property,” Mr Waiswa said during the presentation of the report.
However, such investments are “hidden” in bogus names.
The study was conducted by Ms Jalia Kangave, Mr Waiswa, Ms Nakato, Ms Milly Nalukwago and Mr Patrick Lumala Zzimbe as URA seeks to ensure that all Ugandans in the tax fold sufficiently meet their obligation.
Ms Jane Seruwagi Nalunga, a trade, tax and investment expert said during release of the study that proper tax accountability is a disincentive that largely explains lack of tax compliance.
She said the tax loopholes should be closed and means to tax every eligible Ugandan expedited.
According to Ms Nelly Busingye Mugisha, an advocate of fair and equitable taxation it would take much more than the usual for URA to ensure that High Net Worth Individuals pay their fair of taxes.
“There will certainly be a backlash,” she said.

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