Uganda: Under Declaration Remains Major Tax Offence, Says Ura

19 October 2020

Under declaration of taxes remains the biggest crime making up at least 67.4 per cent of tax offences recorded by Uganda Revenue Authority (URA).

This, according to URA, is followed by mis-declaration, which accounts for 14.9 per cent and undervaluation, which makes up 4.07 per cent of the offences registered.

The details are contained in an analysis of customs offences registered during July to September.

Such offences have forced URA to step up enforcement measures in which during the period the tax agency recovered Shs14.4b from 1,468 seizures.

While presenting the revenue performance report in Kampala, URA Commissioner General Musinguzi Rujoki, noted that smuggling, which also partly falls under, under declaration, remains a major offence, which must be fought ruthlessly.

Other offences such as temporary road and transit violations, account for 9 per cent while outright smuggling accounts for 2.9 per cent. Mis-classification accounts for 1.07 per cent while concealment, which had been a major offence until the installation of scanners, accounts for 0.44 per cent, the least among registered offences.

In a bid to boost compliance and influence taxpayers' behavior, URA has instituted various administrative measures to support revenue generation.

The measures include, among others implementation of compliance initiatives such as Electronic Fiscal Invoicing and Receipting Solution, voluntary disclosure, Digital Tracking Solution, enforcement operations and dispute resolution.

Manufacturers have since last year challenged the implementation of the Digital Tax System, which includes digital tax stamps, saying it was a cost burden on their already strained operations.

However, government has insisted that the Digital Tax System is one of the ways through which it will seek to tackle under-declaration of taxes.

Government has already indicated that digital tax stamps have helped URA to bring at least 84 companies into the tax fold that had previously not been compliant.

During the quarter to September, URA said, enforcement measures have been an important factor, helping the tax body to return a surplus in revenue collections from Local Excise Duty, the first time in over three years.

About Shs9.7b was recovered from enforcement activities due to non-compliance and under declaration of production volumes.

Second-quarter projections

URA will be seeking to collect Shs4.4 trillion in the second quarter of the 2020/21 financial years, which is almost twice what was collected in the first quarter.

To achieve this, focus, according to Mr Rujoki, will be put on integrity, accountability, professionalism and commitment.

"We have negative tolerance to corruption and I am calling upon the public and the taxpaying community to join us in this struggle," he said.

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