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Ugandans Ignorant of Taxes Levied By Gov’t- Survey

Kikuubo is a popular hub for traders in Kampala. Many Ugandans are ignorant of taxes levied by Government

The majority of Ugandans don’t know the number of taxes levied by the government, this is according to the latest Twaweza’s Sauti Za Wanainchi Survey.

Taxes enable the government to reduce donor dependence and invest in the public services that allow society and the economy to thrive – as outlined in the government’s Domestic Revenue Mobilization Strategy (DRMS, 2019- 2024).

The survey, whose findings were released on Tuesday shows that about seventy percent of the citizens are most likely to be fully aware of and pay VAT than any other tax in the country.   The second most mentioned type of taxes is unofficial levies; which thirty percent of the citizens claim to pay.

Twaweza’s Sauti Za Wanainch Senior Programme officer, Marie Nanyanzi says those that pay taxes and levies said they do so with the expectation the taxes will help improve public services (64%).

The second most cited reason for paying taxes is because it is compulsory (27%).

Interestingly, the survey found that wealthy people are more likely to mention service delivery (71%) as a reason to pay tax while poorer people are more likely to point to taxes being compulsory (36%).

The two forms of tax that citizens recall paying are VAT (69%) and unofficial levies (30%), well ahead of other forms of taxation.

It is likely that many of those reporting that they pay unofficial levies are referring to the (often compulsory) financial and/or in-kind contributions that residents of a particular area are required to make towards local development initiatives.

A number of tax and taxation experts have in the past urged the government particularly Uganda Revenue Authority-URA to increase taxation awareness. Many have indicated that tax morale or the intrinsic motivation to pay tax is very low among Ugandans.

They have observed that the willingness of taxpayers to voluntarily comply with their tax obligations beyond fear of being punished or fined remains low.   Because of low tax morale, Uganda Revenue Authority foots a hefty bill for tax enforcement.

Francis Robert Kabuye,  from the Federation of Small and Medium Enterprises Uganda while commenting on the findings suggested that the government should provide more accountability to the citizens to motivate them into paying taxes.

Maurice Kibalya, the Bugabula South MP agreed with a section of Ugandans who indicated their motivation for paying taxes was the need for improvement in service delivery.

URA has recently made efforts to increase tax morale by trying to account to Ugandans about infrastructure constructed using local taxes. It is common to find billboards next to an infrastructure project with a URA message thanking the taxpayer.

Despite those efforts of trying to reach out to inform and engage today’s – and future – taxpayers towards a culture of tax compliance in which citizens see paying taxes as an integral aspect of their relationship with their government, the Sauti Survey found that some Ugandans are still avoiding to pay tax.

Kibalya suggests that URA should cast the net wider to catch the big tax evaders whom he said are usually big people in government.

Isaac Arinaitwe, a Senior Economist in the Finance Ministry’s tax department says that there have been efforts to increase tax collection through Information Communication Technologies(ICTs). According to the survey, seven out of ten citizens (70%) are aware of URA although there are significant variations between groups.   Men are more aware than women (77% of men, 63% of women), urban residents are more aware than rural (81% against 65%), and the wealthier and more educated are also likely to be more aware of URA.

Regionally, most citizens are aware of URA in Greater Kampala (84%) and Central Region (87%) and the least citizens are aware in Western Region (57%). However, only 1 out of 20 citizens (5%) have ever had contact with URA.

Among them, half rated this interaction as good. However, among citizens more broadly, ratings of the performance of URA are more mixed: 2 out of 10 citizens say that URA performs well (20%), similar figures are unsure (23%) and 1 out of 10 say they perform badly (11%).


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