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Kampala Traders, Traders Agree On Tax Education

As part of its ongoing sensitization campaign on the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and Digital Tracking Solution (DTS) in the Kampala Central Business District, URA engaged traders in Edmul and Giant Plaza early this week.

Traders were tipped on the usage of EFRIS, complying with DTS, presumptive taxes, and using other URA systems during the door-to-door engagements. According to field reports, some traders are compliant and have settled their tax obligations.

On the other hand, traders expressed concern about what they described as disruptive operations that are frustrating their clients. They asked government agencies to collaborate on such operations as opposed to conducting them independently.

Ag. Manager of Tax Education Michael Masembe the proposal, pointing out that the tax authority is aware of "taxpayer fatigue" because different government entities contact taxpayers at various times. He emphasized the Taxpayer Register Expansion Program (TREP) which was created to address the issue.

“There is some mileage that we have achieved towards that front; it is a work in progress, and there are efforts to confront that challenge,” he stated.

On the enforcement of EFRIS and DTS in downtown Kampala, Masembe clarified that this is only being conducted in areas where engagements have previously taken place.

“We agreed with the leadership of the business community that before any enforcement is conducted within the Kampala CBD, there is intensive tax education, especially on the new interventions that URA is rolling out; this is what we are doing currently,” he emphasized.

According to Masembe, the engagements, which commenced in August, last year, will continue throughout this financial year.

PAYING TAX COLLECTORS: Uganda Revenue Authority Wants Extra Shs169bn To Pay Salaries Of The Newly Recruited Staff

The Commissioner General of Uganda Revenue Authority (URA), John Rujoki Musinguzi, has told the Parliament’s Finance Committee that he needs an extra Shs169bn to pay the salaries of newly recruited staff.

“So out of the proposed numbers for structural review, our prayer is that in the next financial year, the entire structural review requires Shs169bn but our prayer is to do 60% in the first year, and then 40% in the following year so that in two years, we are able to implement the recommended and approved new structure that will improve efficiency and tax collection,” Musinguzi said.

According to Parliament, in the last two years, URA has failed to utilize all its wage allocations from the government. Parliament further reveals that URA's wage bill will rise to over Shs366.770bn, given the Shs197.77bn that has been approved in the 2024/25 national budget.

Tax collection

The Minister of State for Finance, Henry Musasizi, has revealed that URA is expected to collect taxes worth Shs31.574trn to finance the 2024/25 national budget. He said this is an increase of Shs1.9trn from the current target of Shs29.672trn, which the Authority is expected to collect in FY 2023/24.

Musasizi made the revelation while appearing before Parliament’s Finance Committee where he led the team from URA to defend their 2024/25 national budget. Yesterday, the Minister said that the recently tabled tax proposals on cement, fuel, land transactions, etc are intended to raise revenue to the tune of Shs1.902trn.

“To achieve this projected target, URA will continue to undertake the following reforms; roll out and enforcement of electronic receipting and invoicing solution. The objective of this reform is to ensure that taxpayers are able to keep clear records, file returns in a timely manner and they are able to efficiently assess their VAT. I call upon every Ugandan to support this cause,” the Minister said.

Tough call

Agnes Apea (Amolatar District Woman MP) wondered about the magic URA will use to collect this money given the revenue shortfalls the Authority has recorded in the recent past.

“What is new and what is really magical that you are going to do to raise the expectation of this country that you are going to raise additional Shs1.9Trn? I think that will put us at risk. We are better off maintaining the revenue that we generated last year because, after all, we have never seen a year that we have achieved a surplus of 2%. I have a problem of over-exaggerating our projections and for me that is where the problem comes from.”

Jane Avur, the Vice Chairperson, Parliament’s Finance Committee said: “Whereas our annual target revenue collection is about Shs29.6Trn, up to the first half of the year and later on in the Commissioner General’s report up to the end of the year, we are still at Shs19Trn, we would like to know as a Committee, what corrective measures have you come up with for us to hit the target come June 2024? Because a lot of activities have been planned by different sectors and a lot of commitments have been made by Government based on that target.”

URA Impounds Motors In Mbale Transporting Smuggled Goods

Uganda Revenue Authority reveals that their enforcement team recently in Mbale impounded four motor vehicles and eight motorcycles, which were conveying smuggled goods that included wheat flour, sugar, and cement.

URA Customs officials said that smugglers had resorted to using motorcycles and small cars to ferry the contraband from the consolidation stores.

“After hitting them hard, the notorious smugglers from the areas of Bukwo and Kapchorwa have resorted to offloading their loot in consolidated stores in Kaserem and Kamus villages from where they ferry to final destinations using small vehicles and motorcycles,” said Enforcement.

Four vehicles, including three Fuso trucks with registration numbers KDB 674Y, UBE 128M, and UAY 105G, as well as a Toyota Carib UAP 803D, were seized. Eight motorcycles were also taken into custody; six of them had number plates registered in Kenya.

Upon inspection, it was discovered that these were transporting 250 kg of sugar, 69 cartons of wheat, and 600 bags of Kenyan cement.

A similar operation was conducted on January 24, when a Fuso truck carrying contraband was intercepted. The Supervisor Customs Enforcement for the Eastern Region stated that the offender in this instance will be required to pay UGX 48,794,756 in taxes and penalties.

Despite smugglers’ ever-changing tactics, the Mbale Team-Lead notes that URA has increased intelligence-led targeted operations at the porous borders in addition to targeting consolidation centres.

According to sections 199(iii) and 200 of the East African Community Customs Management Act (EACCMA), the owner of a means of conveyance used in smuggling is liable to a fine not exceeding USD 5,000.