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5.2m potential taxpayers still outside tax fold, says URA
Mr Rujoki says that whereas budget demands are increasing, the tax net remains too small to cater for the current needs. Photo / File
What you need to know:
- URA says out of the nine million potential tax payers, only 3.2 million are registers as compliant
Uganda Revenue Authority (URA) has indicated that at least 5.8 million potential taxpayers remain outside the taxable fold yet the tax collector is increasingly under pressure to raise revenue collection.
URA has in the last three years increased campaigns to bring more taxpayers in the tax fold amid a rapidly growing public expenditure curve that has outstripped domestic revenue.
The rapid growth in expenditure has thus resulted into constant revenue shortfall and an increase in borrowing, with some of the money borrowed to fund recurrent expenditure.
Speaking at the launch of the Budget Month in Kampala URA commissioner general John Musinguzi Rujoki, said there was need for Ugandans to pay their fair share of tax if the country is to raise domestic revenues to finance growing needs.
“There are nine million potential tax payers in the country but currently there are 3.2 million taxpayers [on our registers], he said.
However, Mr Rujoki noted that in the last three years URA had managed to bring an additional 1.4 million taxpayers, many of whom, even when they have had been eligible to pay taxes, had not been compliant.
URA has in the last five years deployed a number of measures including digital tracking solutions, tax education and increased enforcement to improve compliance.
Previously, URA has indicated that digital tracking solutions such as digital tax stamps, Electronic Receipting and Invoicing System and a digitised rental tax register have been key in improving tax administration and collections.
However, a report by Ministry of Finance last week indicated that major tax heads such as excise duty, VAT and corporate tax were below target, which is likely to impact expected final revenues for the 2022/23 financial year.
Government has increased targeted revenue collections for the 2023/24 financial year from Shs29.8 trillion to Shs33.3 trillion, as a way of increasing Uganda’s tax to gross domestic product ratio by 0.5 percent per annum.
However, some experts have warned that the increase could be ambitious given that the economy has been dampened by dissipating Covid-19 effects, inflation and global conflicts.
Under the 2023/24 Budget government has indicated it will seek to fully monetise the economy through commercial agriculture, industrialization, expanding and broadening services, digital transformation and market access.
At the same event, Mr Ramathan Ggoobi, the Ministry of Finance permanent secretary, said the 2023/24 Budget stands at Shs52.72 trillion, of which Shs33.3 trillion is expected to be generated from domestic revenues, Shs8.25 trillion from project support, Shs2.78 trillion from budget support and Shs8.35 trillion from domestic refinancing.
He also indicated that by the end of the 2023/24 financial year, Uganda’s gross domestic product is projected to expand to Shs206.54 trillion, which in turn is expected to accelerate growth in GDP per capita to $1,182 up from $1,093.
Monetise economy
Under the 2023/24 Budget government has indicated it will seek to fully monetise the economy through commercial agriculture, industrialization, expanding and broadening services, digital transformation and market access.
