MAY 6, 2010: URA Under Fire As Revenue Dips

URA Under Fire As Revenue Dips

SOURCE: The New Vision

Patrick Jaramogi

Kampala — THE Uganda Revenue Authority is to blame for the decreasing revenue collections.

Issa Ssekitto, the Kampala City Traders Association spokesperson, said the tax body's double standards in taxation was part of the problem.

"We want equity and transparency regarding tax issues. In this country, it is the 'big fish' and political heavy-weights who get tax waivers and exemptions," he claimed.

Ssekitto wondered why a poor trader in Kikuubo (down-town Kampala) should pay sh40m for a container of goods and a 'big fish' pays just sh10m for the same container.

He was speaking at a tax justice workshop organised by the Southern and Eastern Africa Trade Information and negotiations Institute (SEATINI)-Uganda at Hotel Africana recently.

He said people will continue dodging taxes unless URA and the Government explain to citizens what brings about disparities in taxation and where they put the taxes collected.

"You have very bad infrastructure and you expect somebody to pay taxes? A widow in Owino Market, with a capital of sh200,000, is charged sh1,000 daily, yet a boda-boda rider with a sh3m captital base, is not paying any shilling due to politics. Is this fair?"

Ssekitto said if every Ugandan paid their taxes, there would be no need to borrow from donors.

"People want to pay taxes, but they need equity. Those getting billions of shillings don't pay taxes, leaving the ordinary citizen to carry the burden of paying taxes," he said.

The SEATINI-Uganda country director, Jane Nalunga, said a "poor man" cannot pay tax.

She said URA should improve its sensitisation, suggesting that the tax body starts door-to-door campaigns.

"Provision of social services will lead to tax compliance. The revenue collected should be ploughed back," she argued.

URA's Kalyebbi Magoola revealed that currently, there were shortfalls of about sh200b.

Meanwhile, Magoola has said reliance on external assistance is undermining Uganda's economic development and sovereignty

The tax guru argued that developing using loans was economically destructive.

Uganda has been presenting deficit budgets, with domestic resources covering 63% of the expenditure compared to 37% from external aid.

"Tax and aid have different effects on the behaviour of the Government.

"Tax systems reinforce the accountability of the Governments to citizens, while aid makes accountability to donors, not citizens, a bigger priority," he said.

Magoola also said the ability of Ugandans to pay tax was worrying.

He pointed out that internationally, it is accepted that improving taxation capacity in developing countries was the best option to achieving development.

"But that is not the case in Uganda. Out of the 30 million plus population, only 41,402 (0.14%) tax-payers are formally registered, excluding employees whose PAYE is deducted at source," he said.

He added that 26,525 people (0.09%) paid sh100,000 or more tax in the 2008/09 financial year.

He said the taxman was having shortfalls because sometimes tax issues are politicised.

Magoola also revealed that URA had started tracking the revenues remitted to the consolidated fund in the Bank of Uganda.

"Our work is to collect revenue, but we also now want to know how the revenues we collect are utilised. We, however, have little control over that," he said.