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Kasaija: Tax Avoidance Hurting Revenue Collection

By Drake Nyamugabwa

The Minister of Finance, Matia Kasaija has asked Uganda Revenue Authority and Local Governments to close the existing gaps in the tax revenue management, saying that corruption and smuggling are increasing revenue losses.

The Minister, who was represented by Wilson Twamuhabwa, the Economic Advisor to the Minister made the remarks during the recent launch of The Tax Monitor Study in Uganda that was commissioned by SEATINI and Oxfam to examine Uganda’s current tax system.

 “Uganda revenue generation is low because of the inefficiencies in tax collection by URA and Local government. We need to have more enhanced methods to solve tax avoidance in order to raise revenue,” Kasaija said in a speech delivered by Twamuhabwa.

The Minister said that since tax revenue is the most reliable and sustainable way of funding domestic budgets, there is need to wipe out the ‘smart people’ engaged in corruption and smuggling among other illegal activities to solve tax avoidance and reduce tax revenue loses.

However, he said that despite the challenges, Uganda’s total tax revenue has been increasing over the past years.

“In the last 5 years the total tax revenue continues to grow despite the challenges. We hope to reach our targets,” he said.

The Oxfam report indicates that though Uganda has a robust legal and institutional framework on taxation, the country has not raised its tax-to-GDP ratio compared to other East African countries, which the report shows that it’s due to the challenges in revenue.

The report recommends that government should ensure full autonomy of URA and hold the entity accountable to an agreed set of performance and that the Ministry of Finance should formulate and implement policies that allow self-employed people and small businesses to formalize their businesses easily among other recommendations.

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