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Auditor General Urges Banks To Share Data With URA To Bolster Revenue Collection

A number of banks were recognized and appreciated for their support in revenue mobilization.

 By Francis Otucu

Innovation, compliance and service delivery topped discussion at the Serena Hotel on Friday as Uganda Revenue Authority (URA) engaged stakeholders at the 5th Annual Banking Conference.

The conference was convened by the tax body under theme, “leveraging the use of technology to foster compliance and enhance service delivery.”

Participants which included banks, telecoms and microfinance institutions posed questions such as ‘how to do we provide accurate data of our clients to URA without breaching the element of confidentiality?’ which they claim is a major issue to do with trust.

This came after the Auditor General’s office put forward some of the challenges the Government through URA (tax collector) faces while dealing with agents (banks, telecoms and microfinance) of revenue collection.

According to the Auditor General, some banks, telecoms and microfinance do not provide accurate information about their clients. Other challenges include delays in remittances, redundancy of data, fraud, non-compatibility of users on the digital systems which poses the risk of data leakage among others.

Keto Kayemba, the Assistant Auditor General in the AG’s office said that banks are closer to their clients’ deposits and as such, she says, it is the banks to ensure that URA collects what they are supposed to collect. She says there is a need to widen the tax base from the current 1.7 million. This, Kayemba says can be done through formalization of the informal sector.

She says banks are the custodian of information and that banks should endeavor to share information with URA.

She, however, emphasized the need by banks to take advantage of technology and innovation.

Mathias Katamba, the Chairman Uganda Bankers Association, who also doubles as the Chief Executive Officer at dfcu Bank said previously, means of payment to URA through the bank was mainly by cash and that things were manual.

He noted that currently, things are integrated in the URA portal. He says banks act as agents to enforce agency notices for tax defaulters and that banks have now incorporated TIN numbers during the account opening process.

This increases visibility, Katamba said.

He added that with 17 million bank accounts in 562 UBA member branches across the country, the banks could bring more people to the tax net.

He revealed that notices by the banks to tax defaulters also enhance compliance.

In terms of innovation, there is the use of agent banking. This, he said, means one can now pay taxes from anywhere without having to go to the banking hall. There is also the option of making online payments using visas.

He, however, said there is a need for tax education. He noted that the banks do awareness campaigns in a number of areas. He advised URA to join them in these campaigns so as to use the same platforms to carry out tax education.

Katamba said banks are continuing to invest in technology. “We will not stop investing in this,” he assured URA. “We used to do ledgers, make calls from headquarters to the branches. We pledge to be a good and even a better partner,” he said.

Lawrence Olobo, the Assistant Director Quality Assurance at the Bank of Uganda said the Central Bank ensures 99% compliance. This, he said, comes with timely remittances to the URA. “We look at compliance as an obligation. Tax collection is a source of deposits for the banks. Even if URA had not talked about innovation, the commercial banks themselves would have done so,” he said.

“When banks deposit taxes through EFT etc, we automatically remit to URA, including an automatic statement for their own reconciliation,” he said. According to Olobo, since the Covid-19 outbreak, the BoU has been relying on electronic portals to supervise commercial banks. He appealed to stakeholders to harness the new developments coming on board and not run away from challenges but work together.

He appealed to URA to consider using mobile money as a source of revenue collection where agency banking does not reach.

Irene Mbabazi, the Assistant Commissioner Compliance at URA recognized the role of banks in revenue collection.

“Through you (banks), tax payers are able to pay their taxes,” she said.

She added that URA has gone into digital tracking as well as electronic invoicing which she says helps protect genuine taxpayers and ensure record keeping respectively.

Mbabazi said URA is looking for data to try and find out who is not meeting their tax obligations. When this is done, she said, the tax collector will be able to meet its revenue collection targets.

 After gathering this data, Mbabazi said URA will go to the next step of ensuring a data driven decision.

URA Commissioner General, John Musinguzi, said the tax body wants to exhaust all options of dialogue before moving into enforcement.

“We appreciate dialogues. We will implement all agreements of this dialogue,” he said.

Musinguzi said  in a bid to have more people embrace tax payment, URA is still doing a lot of content, identifying the right partners before going into proper tax education.

Awards

At the close of the banking conference, URA rewarded the Most Compliant Bank, Most Innovative Bank and Best Client Service.

Citi Bank took home an award for Best Compliant Bank with 1st and 2nd runner-up being Bank of Baroda and KCB respectively. In the category of Most Innovative Bank, GTBank emerged winner. Standard Chartered Bank emerged 2nd runner-up in this category while Diamond Trust Bank managed 1st runner-up position.

Under Best Client Service, Diamond Trust Bank emerged winner. Standard Chartered Bank again emerged 2nd runner-up with Stanbic Bank making it to 1st runner-up position.

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