The Uganda Revenue Authority (URA) will soon implement an accreditation system for top tax payers in a move aimed at improving tax compliance in the country.
The programme, dubbed, Customs Authorised Economic Operator (AEO), will enable compliant organisations to get priority treatment at URA and other tax bodies in the region.
A company or organisation involved in international trade will be required to declare its compliance history to URA for a determination of its eligibility to be an AEO.
Once a company is certified as an AEO, it will be able to conduct business across borders conveniently and in other countries without the usual scrutiny and hassling from custom officials in those countries.
Dickson Kateshumbwa, a URA customs department official, said certified AEOs would be able to transact their declarations electronically without supporting documents, get pre-arrival clearance of cargo, enjoy self management of bonded ware houses, and get priority treatment when cargo is selected for control. They will also enjoy automatic renewal of licenses after paying necessary license fees, and get withholding tax exemption among others.
The same programme has been successfully implemented in Asia, USA, the European Union and South America.
"We are sure the programme will work here because it has succeeded in other countries," Kateshumbwa said, adding that acquisition of AEO status would result in long term reduction of business costs where by costs related to customs enforcement controls shall be avoided. Delays and risks will be reduced and hence insurance costs shall reduce.
With pressure to increase the tax-to-GDP ratio from the current 12%, and to meet its Shs6.3 trillion target for this financial year, Uganda Revenue Authority (URA) is working hard to implement new tax compliance measures to be able to meet its targets and make government happy.
However, some critics have said the programme could have loopholes that unscrupulous companies could exploit to dodge taxes through under-declaring, smuggling and dumping goods on the market.
But Kateshumbwa suggested that they are aware and have taken care of the risks. "Once we realise that a member is misusing the AEO programme, we shall not renew their membership at the end of the year," he said, adding, "We are working on an electronic system to even involve agencies like the police, Uganda National Bureau of Standards and others to ensure that the system is not abused."
At a recent consultation meeting in Kampala, the private sector appeared positive about the new programme. "For us we are open and have been compliant. It is up to URA to look at our books and then give us a go," an official from British American Tobacco told The Independent.
Madhvani Group Board Chairman Sam Rutega said they are aware of the programme and are ready to participate.