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Agent banking becoming important to tax collection - URA
Agent banking has been key in bringing banking services nearer to the people. Photo / File
What you need to know:
- URA says it is recording large growth in revenue collections through agent banking
Agent banking is increasingly becoming important in tax collection, according to Uganda Revenue Authority (URA).
Speaking at a meeting of Housing Finance Bank agent banking agents, Mr Ainamaani Tearemwe, the URA finance supervisor, said URA was recording large growth in revenue collections through agent banking with Housing Finance Bank alone returning a monthly collection of close to Shs9b.
This, he said, had been possible due to accessibility and flexibility of agent banking, even as he noted that some tax payers had raised concerns regarding costs involved in tax transactions.
“We collect Shs8.8b in form of tax and non-tax revenue monthly through Housing Finance Bank [agent banking system]. The money was paid through an average of 3,500 transactions per month,” Mr Tearemwe said.
Over the years, URA has been putting in place various platforms through which taxpayers can pay taxes, among which include mobile money, online payments, real –time gross settlement electronic fund transfer and cash payments through banks agent banking.
Agent banking has provided access to banking services, with the number of agents growing to more than 26,800. These are shared by 22 banks, according to Bank of Uganda.
Bank of Uganda recently noted that agent banking had rapidly grown since 2017, paving the way for improved access to formal financial services across Uganda.
For instance, the Central Bank noted that in 2017 the number of agent banking stood at just 139, but experienced exponential growth in 2019 to 11,000, before expanding further to 23,000 in 2021 and to more than 26,858 agents by June 2022.
“As of June, there were 22 financial institutions on the agent banking shared platform … the total number of agents for institutions licensed to provide agent banking services was 26,858,” Bank of Uganda said, noting that the growth provides fertile ground for financial inclusion in addition to other key performance indicators.
