Mps Want Tax Policy Review for Better Domestic Revenue Mobilization

Dr. Keefa Kiwanuka, the Chairperson of the Finance Planning and economic developement speaking to Journalists after the meeting

Members of Parliament sitting on the finance, planning and economic development committee have  said that there is need to review the domestic tax policies is the country is to better mobilize taxes domestically and avoid external borrowing.

The call was made by the vice chairperson of the committee Hon. Avur Jane Pacuto and Woman MP Pakwach on the sideline of a domestic revenue mobilization for development meeting organized by Uganda Revenue Authority (URA) with Members of Parliament and officials from USAID on Monday at Kampala Serena Hotel.

Dr. Keefa Kiwanuka, the Chairperson of the Finance Planning and economic developement speaking to Journalists after the meeting 

“Our Demand is that can we enhance domestic revenue so that we can reduce on borrowing, and that can only be done better if there are proper systems to administer tax laws that are passed by Parliament”.

However, the Mps said that if the laws are a hindrance for domestic revenue mobilization, then there is need to review them by the Ministry of finance planning and economic development before presenting it to parliament.

The Committee’s demand is based on the fact that government has come up with a budget estimate of UGX43t, and the target set for URA is to collect about UGX25t in the next financial year.

However, the committee also questioned the possibility of URA realizing the UGX25t target set by government in the next financial year, given the fact that they are already running on a deficit of UGX1t in the current financial year, and also the fact that the economy is still recovering from the covid-19 economic shockwaves.

During the meeting the stakeholders sought to understand better the operations of URA bearing in mind that there is a clear document that guides URA in how it can domestically raise revenue.

Despite the operational challenges in tax administration, the committee noted some level of improvement, and if URA is better supported, it would be able to raise more revenue domestically.

The Committee advised the Authority to use the existing systems like the electronic Fiscal receipting and invoicing system (EFRIS), the scanners at the border points, digital tracking system among others for domestic revenue collection.   The committee also tasked the Authority to fast track tax leakages.

“That one has come out very clear because of lack of those revenue points at border posts because our goods are able to go out and other goods come in without control, and also the issue of corruption despite the many electronic channels of revenue collection. They need to closely monitor their staff to avoid these revenue leakages”.

The spokesperson of the Authority Ibrahim Bbosa whilE speaking to journalists after the meeting said that the discussion with the MPs and other stakeholders focused on how better the country can mobilize taxes domestically to finance the national budget and reduce external borrowing.

He said that there were a number of concerns put across by the MPs and one of them was taxation, and the burden of taxes, and he said that it is due to the narrow tax base of over two million people. He further said that they have strategies in place to expand the current tax base to about five million in the next four years through tax education especially easing the process of acquiring a tax identification number (TIN).

When asked about how the Authority plan to tap into businesses operating digitally, Bbosa had this to say:  “We have so far managed to profile 16 companies that deal in the digital economy and we are continuing with that endeavor, but there are two challenges that we have and one is the need for some legal instruments that need to be approved to give us authority to profile companies legally to help them get internet gateways to monitor online businesses which is still a work in progress.”

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