BY FLORENCE NAMUGANZA
The Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi has said that key on the Domestic Revenue Mobilisation Agenda is to register more taxpayers to support the strained economy. This was during URA’s strategic engagement with legislators to discuss Domestic Revenue Mobilisation Strategy (DRMS) and come up with more consistent tax policies to enhance local revenue mobilisation initiatives.
The DRMS is a five-year medium-term strategy rolled out in 2019 by government to strengthen Uganda’s internal revenue generation capacity to sufficiently meet budgetary expenditures and hence reduce on donor dependency.
Before the COVID-19 pandemic that caused economic shocks globally, the Finance Ministry and URA had ideated the DRMS to promote import substitution and domestic sourcing of revenue to cut out on reliance on donor funds. With this in mind, the economic growth was projected at 6% facilitated by industrialisation, revenue collections, infrastructure development agricultural modernisation among others. However, with the pandemic shockwaves, the trajectory in the economy dived to 3.8% as of March 2022.
To realign the economy to the set trajectory, Ggoobi said that there is need to have all eligible Ugandans to get involved in boosting domestic revenue by paying their fair share of tax.
“Revenue mobilisation is one of our primary focus on this strategy and this must be done without necessarily increasing the tax burden on those who already paying but by bringing more taxpayers into the tax basket and ensuring they are compliant,” Ggoobi said
Currently, Uganda has approximately two million registered taxpayers. URA however, projects by the end of the strategy implementation 2025, this figure will be at five million.
John Musinguzi, the URA Commissioner General said that Uganda has reached a critical moment in its economic and social development. He called for support from MPs while emphasising the need to give priority to URA’s tax effort in order to sustainably finance the development agenda.
“URA is determined to improve its efficiency in the management and administration of the tax system and to collect every penny of taxes due, with the support of every stakeholder,” said Musinguzi
The DRMS core objective is to improve tax collection and ultimately increase tax to GDP ratio to between 16-18% by 2025. URA projects revenue collections of Ugx 39.2 trillion by the same year. To successfully achieve this, Mr. Musinguzi appealed to the Members of Parliament to be strong advocates and help pass empowering tax policies and laws that will enable the tax body to collect taxes.
The legislators, however, expressed concern for the lack of proper accountability of revenue generated in the country which they say is stifling tax morale. Hon Lucy Akello, the Woman MP for Amuru who also serves as Deputy Chairperson of the COSASE said that there is need to put the little taxes being collected into good use and effectively account for every penny.
On empowerment of potential taxpayers, Hon. Jackson Atima of Arua City said that government should do more avail resources for the rural communities. He added that the infrastructure in the villages should be made better to ease access to markets.
Mr. Musinguzi affirmed the institution’s readiness to collect revenue to fully fund the national budget and also called for support from all the stakeholders especially legislators. He said for instance that the authority is embarking on a comprehensive tax education strategy to promote transparency, information-sharing, partnership with stakeholders, and facilitating taxpayers through improved service provision.
The DRMS is being implemented in partnership with development partners like USAID to enhance tax communication, review in tax policy data analytics and development of IT systems where the agency is expected to spend USD 60 Million.
