By Irene Kabakama
URA has urged financial sector players and government to digitize processes and reduce on the cash economy as a way of promoting holistic development for the sector. This, the URA Commissioner General John Musinguzi, said during the Ministry of finance tax research conference that was held at Kampala Sheraton hotel, centered on reshaping the tax system to support the financial sector development strategy.
“Digitalization of the financial sector has eased work for URA because it provides a wealth of business data that gives insights on incomes and persons eligible to pay taxes, thus facilitating a conducive taxation environment,” noted Musinguzi.
CG also called upon the regulators and key players to willingly share data that will fast-track taxpayer compliance and positively impact on financial inclusivity for the benefit of Uganda.
The two-day conference was organized by Ministry of Finance Planning and Economic Development together with Digi tax Research Programme of the International Centre for Tax and Development, and started on 14th December, 2022.
Key focus was placed on developing a financial sector development strategy and the taxation of savings and investments.
Moses Kaggwa, Director Economic Affairs at MoFPED added that Financial Sector Development Strategy is a key resource towards shaping Uganda’s transformational Vision 2040 that will move the country to a modern and prosperous country with sustained financial economic growth.
Uganda looks to growing savings in financial institutions to 35% of the GDP by 2040 from 14.5% in 2010. If achieved, this will bring in a significant amount of revenue through increased access to financial services and long term finance, and strengthening innovation, financial markets, infrastructure and stability to facilitate development.
In terms of revenue collection, the financial sector is the third most significant sector that contributed UGX 549.11 billion, making it 9.01% of the total collections in the first quarter of this FY 2022/23.
The formal financial sector is comprised of the banking sub sector, microfinance institutions, non-bank financial service providers and development finance institutions, whereas the informal players include informal savings associations, unlicensed money lenders, and informal forex traders.
Victoria Sekitoleko of Private Sector Foundation Uganda (PSFU), urged key sector players to focus on how to tax the agribusiness. She advised them to also engage the key stakeholders in agriculture in order to listen and pick lessons that shape their perception towards tax reforms and financial sector development.
