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URA Sets Internal Revenue Collection Target At Shs 24.6 Trillion

Abel Kagumire, URA’s Commissioner in Charge of Customs

Uganda Revenue Authority (URA) has set its revenue collection target at Shs 24.6 trillion in the 2021/22 Financial year.

This is outside the Shs 22 Trillion target set by the government through the line ministry, the Ministry of Finance, Planning and Economic Development.

Abel Kagumire, URA’s Commissioner in Charge of Customs made this revelation at the 3rd edition of the Bomba Ya Business Summit at the authority’s headquarters in Kampala on Friday.

However, he stressed that for the authority to achieve this, a number of strategies have been put in place.

Top of this, Kagumire says, is tax education.

“Gone are the days when revenue authorities were known for running after people, closing things, blocking people and we think we want to make our tax education more clear so that we are down to earth to this person who is paying tax to understand why they are paying this tax,” he said, adding, “When they get that philosophy, they will just pay willingly, and they will not leave the burden to a few like we are talking about.”

According to Kagumire, URA wants to grow the tax register from the current 1.7 million to 2.5 million.

“We want to start this financial year with 2.5 million taxpayers and then we see how we grow it. I still think that there are very many Ugandans that are in actually tax paying bracket who aren’t paying tax. They are out there. But I think it is us who are into revenue collection who should pass on this message and tell them the value of paying taxes. Some don’t even know how much, the percentages. Can we break it down and translate it down and that’s why we are focusing on tax education. There is still a lot that we need to do as a government. Not to force people to pay but encourage them to pay and when they pay this tax, it is for their benefit and that’s the philosophy we are going out with,” he says.  

The authority is also “facilitating import of raw materials to facilitate production and manufacturing.”

Kagumire says: “We have our natural markets here. DRC. We have South Sudan. They are our immediate neighbors. They need our agricultural products. There is a lot of money in exporting just in our neighborhoods here. Add value to your bananas, you will see how people will take them. They (our neighbors) are our natural markets. As a revenue authority, we are trying to simplify processes for cross-border trade. To make it easy for you to go.”

He adds that URA is going to focus more on domestic revenue mobilization.

“And we can’t get there unless we encourage Ugandans to go into production,” he said.

The other strategy, according to Kagumire is to employ Alternative Dispute Resolution (ADR).

He explains that: “We have been more into courts. You find a lot of money wasted. We spend a lot of time there. So, we have come up with what we call Alternative Dispute Resolution. We are saying, before we go to court, there should be a win-win situation. Can we dialogue? Can we mediate? Can we sit at a table? If you are failing to pay 100 million. Okay. Is there a way that you can pay 80 million and we close it? Instead of going to court for 20 million? So far it has yielded about 365 billion. And we think we want to continue to encourage that.”

Importantly, Kagumire says the authority has revamped the contact centre (call centre).

“If you call the URA toll line now, you will see someone picking your call at 11pm. Officers are there from 7am up to 11. Maybe with time we will be there 24/7 because there are some taxpayers outside there who may want to call after midnight but we have revamped that call centre. We want to reach out to our taxpayers, be in touch with them so that we remove this tax burden from a few Ugandans and we all contribute to national development,” he says.

Crystal Kabajwara, the Director Tax at PriceWaterhouseCoopers (pwc), commended URA for the empathy towards the taxpayers.

She, however, says businessmen and women need more empathy.

“Empathy. More empathy. I like the flexibility that has come from URA, like giving longer payment periods for taxpayers, deferring tax payments, and filing of returns. That shows empathy but what the business community is saying is that, have more empathy especially around dispute resolution.  When you have a disagreement and you come to audit my business and you give me an assessment of 20 billion shillings or 10 billion shillings. That alone is the difference between life and death for my business. Before you actually make that move, engage with me, understand my business, and understand my pain. What has happened to me? How has covid impacted on me. Let’s try and avoid surprises, engage the business people. We want to see a URA or a government that is open for business. Let’s have that continuous engagement,” she said.

Currently, Kabajwara says there is a lot of uncertainty.

“Times are so uncertain. Every bit of certainty is helpful to business owners. The annual changes around budget reading bring about uncertainty. What we are asking of the government is. Can you take a long term view of tax changes to help us plan better? Help us see long term rather than having an annual change which makes it very difficult for us to plan for employers, businesses, cash flow , working capital. So, let’s take a long term view so that business becomes predictable,” Kabajwara says.

Over the years, Kabajwara said URA’s target has been growing. This, she suggests, puts a lot of pressure on the tax body, from the top leadership right to the bottom and definitely to the taxpayer. She appealed to the government to cut pressure on URA.

Whereas Kabajwara commended the government for financial relief to businesses through Uganda Development Bank (UDB) as well as handouts of Shs 100, 000 for the vulnerable Ugandans through the Office of the Prime Minister, she says that the landlords were not catered for.

“The landlord-tenant issue is a critical one. There was a directive from the government that landlords shouldn’t evict tenants for failure or delay to pay rent. If you go to Downtown right now, you will find so many buildings unoccupied, shops with peoples goods in there and yes, it’s been helpful to the tenants but has there been a corresponding relief for the landlords? And yet we are all in the same country. All being affected by Covid. So, how do you help the landlords in this kind of situation?” she said. Ruth Biyinzika, the Head Skills Development, Private Sector Foundation Uganda (PSFU) while speaking as one of the panelists appealed to business persons to plan for risks and consider product diversification.

“Plan for risks and know a day will come and we no longer have parties. We need to think a little bit more,” she said.

For businesses more than ever, she said, “you need more skilled workers. It’s not about saying Michael is very good at Customer Care. Michael should know marketing. Should know how to drive a truck. You should be able to have an accountant that is also able to sell, able to go online and this for me is very important – digital skills. Things have changed. For me, the digital era has come and it won’t stop.

Biyinzika urged the business community to have a good relationship with their banks.

“Things changed. This was a very trying moment,” she said.

Fabian Kasi, the Managing Director, Centenary Bank on the other hand said: “Be cautious about risks. As us a bank we are now much more cautious about risks and I am sure everybody now understands when you come to us, apply for a loan and we decline.”

He, however, said since the Covid-19 outbreak, banks have embarked on loan restructuring.

“Loan restructuring is one of the activities we quickly took on. Many of them didn’t even understand the implication. For some of them, we knew it would be a big burden. We had to reduce the interest rate for some customers,” he said, adding that they (banks) are still in discussions to see how “we can help the heavily hit sectors like the education sector because we don’t want them to close shop because if they do, it definitely comes back to us.”

One thought on “URA Sets Internal Revenue Collection Target At Shs 24.6 Trillion

  1. It will depend on the consistency of tax payers.

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