Sendaula gears up for new task

Former Minister of Finance, Planning and Economic Development Gerald Sendaula, who is also the current chairman of Private Sector Foundation Uganda, was recently appointed chairman Uganda Revenue Authority board of directors. He spoke to Faridah Kulabako about his new role and how he will balance responsibilities as a top man in the two busy organisations.

You have come in at a time when the government is emphasising the need for greater compliance in tax payment and efficiency in revenue collection, how will you ensure increased compliance and efficiency in the system?
We have to improve the methodology of tax collection. The revolution in information technology makes it possible for goods to move from the exporting to the importing country without paying taxes.
We can’t be left out; that calls for extra vigilance and training of staff which is already ongoing. Sensitising people to create awareness about the importance of paying taxes is also crucial.

The Finance Minister Ms Syda Bbumba said Uganda’s tax to GDP ratio is low, how will you improve it in your tenure?
It’s true that Uganda’s tax to GDP ratio has stagnated between 11-12 per cent for so long. That means that for every Shs100 a Ugandan earns, only Shs12 is paid as tax. The myth of the low ratio can be stepped up through efficiency in tax collection. Kenya’s tax to GDP ratio is 24 per cent while Tanzania’s is over 16 per cent. Uganda can also do better. We only have to ensure an efficient tax administration system and increase the tax base by tapping into all those areas which had been left out, cheating us on our percentage.
If everything is done efficiently, am sure our tax as a ratio to GDP will get higher.

What do you anticipate as challenges in your new responsibility as chairman of the URA board of directors?
There are two outstanding issues. The Customs Union, which is in its infancy and paperless flow of goods between countries. The Customs Union will be a challenge for Uganda for some time to come because we have to know whether all taxes will be collected at the entry point in Mombasa for all goods coming into the East African market and how these taxes will be shared among the countries concerned.
The revolution in handling the flow of goods globally also poses another challenge.
The revolution eliminates the use of paper enabling goods to move from an exporting to the importing country when all transactions have been done online. At the end of the day, goods find themselves at the destination without paying taxes.

How will you tackle them?
It requires training of staff in up-to-date technologies, which URA has embarked on because it was part of the negotiations to put in place the Customs Union.
We also have to ensure the necessary equipment is put in place and everyone in the organisation is updated on IT equipment to follow the movement of goods and also make the flow of goods faster.

How do you plan to balance the burden of expectations of being chairman PSFU and URA board of directors?
Appointing me as URA chairman board of directors yet I am also the chairman of PSFU is not strange.
The private sector is the main tax payer in Uganda and it must be at the centre when authorities are discussing and handling tax issues.
My presence at the board means that the private sector’s interests will be fully represented.
For instance issues of non-tariff barriers where trucks are stopped at weighing bridges and other road blocks, which are not for tax payment, delay goods on the road affecting people’s businesses.
That calls for laws, which have turned into non-tariff barriers to be reviewed by the government through the Ministry of Finance to enable Uganda catch up with the rest of the countries in the region.