NGO board tasks URA on delays, grant exemptions

Uganda Revenue Authority (URA) has been tasked to address delays in processing applications and issuing grant exemptions.

According to the Non-Governmental Organization (NGO) Forum, such delays make donors withdraw grant offers since they operate within strict deadlines.

Speaking during a quarterly dialogue on Thursday, Uganda NGO Board chairman Xavier Ejoyi said the delays further hinder the effectiveness of NGOs.

"Tax exemptions are required by donors as a precondition for granting funds to organizations. Delays from the URA in clearing grant exemptions lead to failures in meeting donor obligations, and sometimes donors refuse to provide grants because deadlines are missed. The delays in tax exemptions for vehicles and imported products have, on occasion, resulted in increased costs for NGOs," Ejoyi added.

There are about 14,000 NGOs in Uganda, which have directly and indirectly benefited approximately 12.4 million people.

Statistics from the NGO Forum indicate that in the FY2016/17, NGOs mobilized over Shs4.7 trillion, representing about 18 per cent of the country's GDP.

Ejoyi explained that NGO operations are based on donor agreements and contracts, noting that when URA delays approval, funds are often returned to donors.

"There is a lack of clarity regarding the requirements for tax exemptions, and staff often request information beyond what is necessary, causing further unnecessary delays," he said.

Other issues raised included ambiguity in tax regulations, inconsistency in tax treatment, difficulties in interpreting and understanding tax regulations relevant to NGO operations, and cases of misplaced or lost documents.

Commissioner of Customs Abel Kagumire noted that tax exemptions are created by law, and as the tax authority, URA is mandated to facilitate the process as long as an individual or organization is found eligible.

"The main challenge is the lack of information, which sometimes forces people to travel for services unnecessarily. For example, if you bring in cargo through a port where customs clearance is available, the process can be facilitated, and you're only required to have a customs clearing agent," Kagumire elaborated.

He added, "If it's an NGO bringing goods into the country, they are required to provide specific documents related to their operations, and someone is usually asked to attend an interview. Often, they resist attending the interview."

According to URA, many people are unfamiliar with the clearance process for goods entering the country, which causes delays as they attempt to clear the goods themselves.

"The agent is supposed to help you make a declaration, which is a specialized process. A regular person might not be able to handle it, especially if it exceeds the officer's mandate," he said.

Kagumire further guided that when an international staff member comes into the country, they are required to have a recommendation from the Ministry of Foreign Affairs, and the same applies to cargo coming from abroad.

"We also encounter cases where people import vehicles that exceed the 15-year limit set by the Traffic and Road Safety Act," he remarked.