94 per cent of taxes collected through banks - URA report   

Tax collections through banks, according to URA have been important in closing revenue leakages. PHOTO | PHOTO

What you need to know:

  • Tax collection through commercial banks has been improving since December 2018, growing from 68 percent to 94 percent for the period ended December 2020.

At least 94 percent of taxable revenue is collected through commercial banks, according to a Uganda Revenue Authority presentation on the importance of the Banking Sector in the tax mobilisation agenda.  
In a presentation dated December 2, URA indicated that revenue collections through commercial banks had grown by 26 percent since 2017, signaling an improvement in tax efficiency and closing of leakages. 

The presentation indicated that during the period ended December 2018, at least 68 percent of tax revenue was collected through banks but this has since improved. 
The improvement has seen collections climb to 74 percent during the period ended December 2019, before rising further to 94 percent in the period ended December 2020. 
However, URA does not indicate which banks bring in the most collections. 

During the period ended December 2018, URA indicated, Shs14.46 trillion was mobilised as taxable revenue, of which Shs9.78 trillion was collected through commercial banks. 
Commercial bank collections have since improved, growing to Shs12.31 trillion out of the Shs16.62 trillion that was collected for the period ended December 2019, before improving further to Shs15.76 trillion out of the Shs16.75 trillion that was mobilised for the period ended December 2020. 

URA has in the last five years engaged a number of initiatives as it seeks to widen the country’s tax base. 
The initiatives seek to explore the digital economy as the main driver to close tax leakages, corruption and losses resulting from handling of physical cash by URA agents across the country. 
Early this year, URA implemented the Electronic Fiscal Receipting and Invoicing Solutions in which traders are required to issue e-invoices and receipts. 
In the same measure, URA in 2019 implemented Digital Tax Stamps, which in the first year of implementation brought close to 84 spirits firms, nine wine companies and four beer manufacturers into the taxable fold. 

During the period, at least 42 water producing companies that had not been paying taxes, according to a document prepared by URA were brought into the taxable fold. 
Tax avoidance and under declaration are still  a major challenge for URA as the country struggles to raise the tax to gross domestic product to at least 15 per cent.  Over the years, tax to gross domestic production has been low increase to above 10 per cent in the early 2000s before stalling to under 12 per cent. 

Recently, while celebrating 30 years of URA, President Museveni noted there were several tax leakages that had denied government a lot of revenue as well as stalling efforts to improve the tax to gross domestic product level. 
However, URA has previously indicated that it has been doing some innovations as well as improving in enforcement measures to close tax leakages. 
Such measures, among others include voluntary disclosure, tax ledger reconciliation, improved client relationship management and out of court settlements.