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Uganda: Tax Agency to Widen Net

Tuesday, 08 April 2014   (0 Comments)
Posted by: Author: All Africa
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Author: All Africa

Kampala — In a move aimed at growing the tax register and ultimately increasing the country's tax to GDP ratio, Uganda Revenue Authority (URA) plans to cast its tax net further using its Tax Payer registration Expansion Project (TREP).

A recent report by the Uganda Bureau of Statistics (UBOS) places the informal sector as the fastest growing sector in Uganda, accounting for 43.1% of Uganda's total economy.

Additionally, there is a widening gap between the economic growth and the contributions to government revenue, as evidenced by our tax-to-GDP ratio that still stands at 12.7%, the lowest in sub-Saharan Africa whose average is 17%.

The emergence of a dominant informal sector has been named as a major factor in this disparity. The informal sector refers to all economic activities and income derived that would otherwise escape government regulation, taxation or observation. It is mostly hidden and its operations unreported or unknown.

During the reading of the FY2013/14 national budget, the Maria Kiwanuka, the Minister of Finance, Planning and Economic Development proposed that in order to identify tax payers and collect taxes from small businesses that are usually hard to reach, URA should collaborate with the Uganda Registration Services Bureau (URSB), Kampala Capital City Authority (KCCA) and the local governments.

This collaboration is what has been termed TREP. It was flagged off on January 31, 2014 and is earmarked to expand URA's tax register by 103,570 value clients¬ (clients who submit returns and pay income tax) and generate revenue worth Ush12.9bn.

According to Jolly Kaguhangire, the Team Leader of TREP at URA, the purpose of the project is to register small businesses as a means of broadening the tax base.

She disclosed that the project has so far registered over 10,000 taxpayers and as a result this tax head registered the highest growth of 140.69% in February 2014 compared to the same period last year.

This framework is aimed at streamlining and speeding up the process of business registration where a taxpayer will access all services of the three organizations - business registration from URSB, a tax identification number from URA and application for a trading licence from KCCA - under one roof. It will also help the public further learn their rights and obligations.

To register a business with URSB, the taxpayer shall first carry out a search to confirm that they are not using a name similar to another that is already registered. A taxpayer shall then continue to register their business name and obtain an assessment for payment of the fees of Shs 24,000; thereafter they shall obtain their certificate of registration within three days after payment.

The taxpayer will then proceed to the URA team to apply for a tax identification number (TIN) which shall be processed to completion within two days on submission of all physical documents. KCCA shall then assess the client and issue a trading licence within a day after confirmation of the payment.

"The exercise has the on-spot advantage of taking services closer to the business premises and will reduce the inconvenience of having traders visited by URA, KCCA and URSB at different times. It is anticipated that this exercise, which shall run for the next three months, will generate a rich pool of data which shall be captured centrally and shared by all the collaborating agencies," Jolly Kaguhangire explains.

In this Financial Year, Uganda Revenue Authority is expected to mobilize Ush8.5trillion to finance the national budget. However, there all already signs that URA might not hit the target.

This article first appeared on



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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