Digital tool to trace landlords who dodge tax in final stages

David Sseruka (right) at one of his rental units in Nalumunye. PHOTO/Eronie Kamukama

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In June last year, government signed a deal with RippleNami to build a data visualisation system that would match rental properties with their owners as well as estimate the value of rental income from a property. 

A US-based company that government hired to build a digital system that seeks to maximise rental tax collections is now in the final stages ahead of the product launch, according to Ms Jaye Connolly-LaBelle, the RippleNami Uganda chairperson.

The system, which seeks to trace landlords that are non-compliant and those that under declare rental incomes as well as matching properties to real owners, Ms Connolly-LaBelle, said has been undergoing demonstrations with the most recent being a prototype demo at Uganda Revenue Authority (URA).
The demonstrations, she said, were key in creating a system that will help different URA teams among them compliance, tax investigations, process management, service management, and information technology, to identify loopholes as well reaching to the right estimates of how much a landloard is supposed to pay in rental tax.  

“We recently demonstrated a digital user interface prototype of the Rental Tax Compliance System to URA. The prototype provided prospective users with a simulation of the final product for testing and feedback before launch,” Ms Connolly-LaBelle, said in an emailed statement, noting it was critical that the system is tested to see if it support the functions of URA investigators in identifying landlords not declaring or under-declaring rental income.  
In June last year, government through the Ministry of Finance, signed a deal with RippleNami Uganda, an affiliate of US-based RippleNami Inc, to build a data visualisation digital system that would integrate different types of data to match rental properties in Greater Kampala Metropolitan Area with their owners. 

The system will use collected data to classify the nature of occupancy, key among them understanding whether a property is owner-occupied or rented as well as providing a digital address for each property. 
Under the project, RippleNami will aggregate data from URA, ministries of Lands and Local Government, Kampala Capital City Authority, National Identification and Registration Authority, National Water and Sewerage Corporation, National Information Technology Authority and Uganda Communications Commission, to come up with a data base that will attach properties to owners and the value of rental income.

The Rental Tax Compliance System is part of a larger digital component under the Domestic Revenue Mobilisation Strategy 2019/24 in which government is seeking to increase the rate of tax to gross domestic product from the current 12.9 per cent. 
Majority of Ugandans have little or no contribution at all to the country’s tax potential which has seen an exponential increase in debt by about 70 per cent in the last three years. 

Mr Allyn Pon, the RippleNami Inc chief product officer, said the demonstrations have been important in providing accurate feedback that will be important in eliminating major changes at the end of the development. 
“We were able to give URA a detailed representation of the final product. We presented assets, interactions, and integrated details to test user responses. We tested specific components of the product such as navigation, look and feel, data content, user workflow and interactions,” he said, but did not indicate when the final product is expected to be launched.

Government ministries and agencies that have been working to see through the project have noted the system will be a transformation tool that will increase government revenue as well as create a back-to-back documentation platform to improve service delivery. 
Lands Minister Beti Kamya, said it was important that everyone supports government’s plan to improve domestic revenue mobilisation as well as ensuring that everyone complies with their respective tax obligations.  

Part of a larger plan       
Mr John Rujoki Musinguzi, the URA commissioner general, recently said the system was part of a larger plan in which the agency would use technology to improve tax efficiency and service delivery. He said the system would help URA to settle the long-standing complications in identifying the right landlords of properties the income generated from rented properties.