Prime
CSOs caution govt on new taxes
What you need to know:
- URA ought to plug areas of tax leakages.
- Fight tax evasion
Civil Society Organisation (CSO) members have cautioned the government against levying tougher taxes on Ugandans and instead offered advice on how to best exploit the existing tax measures to realise more revenue to finance the national budget.
Speaking at the Economic Talk on the National Budget for FY 2024/25 held in Kampala on Tuesday under the theme ‘Promoting a people-centered budget that dignifies humanity,’ the Executive Director of the Civil Society Budget Advocacy Group (CSBAG), Mr Julius Mukunda advised that focus be placed on making the existing tax regime more effective.
In his address delivered shortly before launching the National Budget Month for FY 2024/25 in Kampala, Mr Mukunda advised that Uganda Revenue Authority (URA) moots plans aimed at plugging leakages that cause revenue loss.
“We want URA to think beyond the current revenue collections that they are making and think how to make them more effective and get the other person [evading taxes] into tax bracket,” he said, condemning the latest new tax regime that, once signed into law, it will see government collect Shs1,550 and Shs1,230 on each litre of petrol and diesel respectively.
He argued that this would only worsen the already high cost of living and increase the cost of doing business in the country saying: “Fuel has a multiplier effect on increasing the cost of doing business, simply because of the increment that was put on fuel [in the new tax regime].”
To this end, he advised that the government partners with local governments at various border posts of Uganda to not only boost URA’s thin man-power but lessen the gaps exploited by smugglers to evade taxes.
“It is expensive for URA to man all border posts in this country and I would therefore go into partnerships with border districts with border districts to man those customs and collect taxes on behalf of URA and would give them a commission [off the collections made]. That would be a win-win situation,” he said.
He equally advised that a similar move be considered for authorities within urban centers by partnering with local leaders to help URA collect rental tax.
“What if URA sits with them [local authorities in urban centers] and asks them that as you are collecting the property tax, please also collect for me[URA] rental tax,” Mr Mukunda stated.
This comes at a time when a string of stakeholders within the economic realm expressed displeasure over the government's move to introduce a raft of new taxes that are scheduled to come into effect at the commencement of the Financial Year 2024/25.
The fresh taxes are contained in a set of five Bills that were processed and endorsed by Parliament last month. These include the Excise Duty Amendment Bill 2024; Stamp Duty Amendment Bill 2024; Income Tax Amendment Bill 2024; Value Added Tax Amendment Bill 2024, and Tax Procedures Code Amendment Bill 2024.
In early April this year, in a joint presentation by the State Minister for Finance in charge of general duties Mr Henry Musasizi and the Commissioner General of URA Mr John Musinguzi, it was revealed that URA would tasked to collect a minimum of Shs31.574 Trillion throughout the Financial Year 2024/2025.
This was however questioned by the legislators on the House Committee on Finance chaired by Mr Amos Kankunda, with the majority claiming that the government was being overly ambitious considering several leakages that caused tax evasion in Uganda.
In defense, Mr Musasizi retaliated that URA’s abilities and strategies would enable the government to achieve the said target.
“To achieve this projected target, URA will continue to undertake the following reforms; roll out and enforcement of electronic receipting and invoicing solution,” he told MPs on April 4th at Parliament.
He also went on to note that “the objective of this reform is to ensure that taxpayers can keep clear records, file returns promptly and they can efficiently assess their VAT. I call upon every Ugandan to support this cause.”
