URA: Tax Policy Changes For 2021/22 Are Focused On Easing Compliance

By Ian Rumanyika, Ag. Assistant Commissioner Public & Corporate Affairs, Uganda Revenue Authority

In line with the budget theme of ‘Sustainable Industrialization for Inclusive Growth, Employment and Wealth Creation’   the changes in tax legislation this financial year are geared towards Government’s commitment to industrialization/import substitution, boosting local production, creation of employment, supporting local and foreign investment, easing the burden of tax compliance and encouraging compliance.

This will expand the tax base and increase the tax to GDP ratio of Uganda, leading to growth in domestic revenue so that Uganda can fully finance her national budget and achieve total economic independence

COVID 19 has affected many businesses and Government has put in place several initiatives to enable businesses recover from the socioeconomic setbacks caused by the COVID-19 pandemic. Government put this into consideration in drafting these policy changes among other initiatives.

A brief analysis is on how the Tax Policy measures for last FY 2020/21 performed

As at end April 2021, URA had collected UGX 15.585 trillion against an annual target of UGX 21.63trillion, which is 72.05% of the total revenue

Tax policy and Administrative measures for this FY, that were presented in the Budget of 2020, contributed UGX 905.93Bn as at the end of March 2021, against a target of UGX 854.88 Bn. Out of this, Arrears management contributed UGX 709.37Bn mainly attributed to implementation of Alternative Dispute Resolution and efficiency gains in the arrears management process.

The table below shows performance of Tax policy and Administrative measure:

How URA has re-positioned to deliver on her mandate.

In order to deliver on the expectations from Government in the medium and long term, URA has re-positioned herself by redefining her Mission, Vision and Core values, while placing special attention to the integrity of our staff, processes and systems.

We believe that it’s through this that we shall be able to improve service offering to our esteemed Clients, re-build URA’s Credibility, improve Compliance levels and ultimately deliver Uganda from Economic dependency.

Measures to be implemented:

In order to meet and exceed Clients and Stakeholder expectations, URA has prioritised the following interventions, to be implemented both in the short & medium term:

Process Improvements – Process re-engineering, automation of manual process, processes integration. Simplification and standardization, revamp TIN registration, Improve Tax Education – Review the scope of Tax Education, simplification, and institute mobile taxpayer services (Mobile bus for registration, education and compliance), Tax base Expansion & Maintenance – Research on new tax handles and grow the tax register, Technology and Data – Enhance data security, simplifying the systems for the taxpayers, improve availability of services and improve the capacity of IT infrastructure, Focusing on smart solutions– like Electronic Fiscal Receipting and Invoicing Solution, Digital Tracking solution/Digital Tax stamps. Improve our people and Governance – This will entail among others, developing the desired URA staff culture, integrity enhancement, structural review and functional alignment, enhance Institutional Memory and Knowledge Retention, introducing multi-dimensional selection and recruitment assessment for the different levels,

Below we are the tax policy changes broken down in simpler terms and with justifications.

These policy changes were passed by Parliament and have been assented to by the President of the Republic of Uganda. The tax laws will however take effect from 01 July 2021. Below is a summary of the key policy changes and how you can take advantage of them to grow your business;

Income Tax Amendments

Value Added Tax Amendments

Excise Duty Amendments

Stamp Duty Amendments

The Tax Procedures Code Act Amendments

Mining Amendment Bill, of 2021, The Tobacco Control Act Amendments and, The Fish Act Amendment

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