‘54% of Ugandans do not see taxes’ worth'

While many Ugandans say their government has the right to collect taxes, more than half are unhappy and believe the said taxes are not used for the wellbeing of citizens, a perception survey into the taxation regime has established.

According to the survey by the Afro-barometer, a survey research network working in 39 African countries, dissatisfaction is also evident when it comes to how the government spends taxpayers’ money.

“Not only do most Ugandans have trouble finding out how the government uses the tax revenues it collects, but fewer than half think the government uses tax revenues for the wellbeing of its citizens,” the survey report, titled, Value for money? Perceived misuse of tax revenue, corruption, and unfairness erode support for broadening the tax base in Uganda, states.

This, according to the survey, has affected willingness to pay taxes, with the numbers of those who support the government’s right to tax collection falling by

23 percentage points from 2017.

Findings also reveal that many Ugandan have limited knowledge of the taxation regime and find difficulty in accessing information on tax administration and usage.

“Three-fourths (76 percent) of Ugandans say it is ‘difficult’ or ‘very difficult’ to find out what taxes and fees they are supposed to pay. An even larger majority, 83 percent, report that it is hard to find out how the government uses the tax revenues it collects,” the report states.

These findings suggest that the tax system may be too complex for a significant number of citizens to understand and use effectively, and that the government does not provide adequate information about how it uses tax revenues.

The 2019 survey, which gathered responses from 1,200 individuals, mirrors present-day sentiments in Uganda.

Many citizens remain concerned about the taxation system, fearing its potential to affect various sectors.

For example, a standoff between traders across the country and the Uganda Revenue Authority over the implementation of the Electronic Fiscal Receipting System (Efris), and the manner of its implementation, that traders say commenced without due sensitisation, has paralysed business.

Traders have called for the suspension of the system, and penalties so far accumulated until due sensitisation has been done, a position URA has rejected.

President Museveni on Friday consented to the demands; albeit temporarily.

According to the survey’s findings, only 38 percent of citizens are in favour of broadening the tax base into the informal sector, due to perceived unfairness of the tax regime.

The government is currently focused on widening its tax base by tapping into the large informal sector, and the agricultural sectors.

Critics say anecdotal evidence shows that it is deepening—and not widening—the tax base.

The taxman also suffers low levels of trust with only one-third of Ugandans trusting it, while 56 percent of Ugandans say that “most” or “all” tax officials are corrupt.

URA has consistently missed its set targets of collection that experts have severally linked to poor administration, evasion, mistrust, among other reasons.

The tax-to-GDP ratio stands at 13 percent as of June 2023.

Efforts to get a comment from URA were futile by press time.