April 01st 2020 was no fool's day prank for URA's Commissioner General, Mr John Musinguzi. He received the instruments of power that ushered him into holding the reins for revenue administration at Uganda's tax body - Uganda Revenue Authority (URA). While his investiture came amidst turbulent times at the Nakawa based organisation, he has scored major points in transforming revenue mobilisation for the liberation of Uganda's economy.
He set the ball rolling, riding on three principles of Patriotism, Integrity and Professionalism, to create a transformational revenue services for Uganda's economic independence.
URA has consistently registered a growth in revenue collections every financial year. For instance, in FY 2020/2021, URA topped revenue growth in the East African region with a 14.99% growth in collections. Musinguzi registered 1% growth in Tax to GDP ratio and Net revenue of UGX 19,263 billion. Despite the outbreak of the COVID 19 pandemic and other global crises that affected the economy, URA collected UGX 21,659.44 billion - the highest collection in the history of our country. The revenue grew by 12.44% as compared to collections for FY 2020/21, signalling hopes for further growth in revenue mobilisation.
While the institution was marred with allegations of corruption with notable figures like the President of Uganda dubbing URA as a den of thieves, there was glaring evidence of revenue deficits and unpolished practices within the tax body.
Musinguzi, in his maiden address to URA staff, said "My focus in URA will be to tackle corruption, Tax education, enhance the human resource function, improve stakeholder relationships and leverage on technology and research to improve the integrity and revenue collections and growth of URA."
Tackling Corruption
For the last three years of leading revenue mobilisation, he has battled against corruption in the tax body. So far, 67 staff were dismissed on grounds of corruption including 3 who have been prosecuted and convicted accordingly. Another considerable number of staff have answered to queries on how they perform their duties once reported for wanting behaviour by either their colleagues, line managers or whistle blowers. This has greatly subsided many forms of corruption that staff are equally desisting from.
In 2021 the Management of URA adopted the Comprehensive Integrity Strategy (CIS) to fight corruption internally and improve service delivery and revenue collections.
In addition, the URA Board of Directors, where Mr. Musinguzi is a member, incorporated robust policies such as URA Code of Conduct, Lifestyle Audit Policy, Anti-Fraud and Corruption Policy, and Prevention of Harassment, Sexual Harassment, and Abuse of Office Policy; to fight corruption amongst staff.
To date, Musinguzi continues to investigate credible corruption allegations against staff and subject those who are found culpable to disciplinary hearings. The guilty are punished accordingly through termination, dismissal and the most recently instituted direction of prosecution in courts of law.
"This is something we do to keep ourselves in check in the course of conducting URA business," explained Mr. Musinguzi.
Leveraging on technology
URA has capitalized on technology and science to enhance revenue administration and growth in collections aimed at surpassing the target. This is facilitated by several digital applications enhanced by URA such as the Non-Intrusive Inspection (NII) scanners, Bonded Warehouse Information Management System (BWIMS), Electronic Fiscalized Receipting and Invoicing Solution (EFRIS), Digital tracking systems (DTS) and the AskURA App, among others.
To improve the revenue collection efforts, the IT department developed the URA USSD code and the TouchPoint - a Client Relationship Management (CRM) tool, to boost revenue and curb revenue leakages.
In addition to the TouchPoint, a fully-fledged contact centre is operational and dedicated to professionally handling clients queries and complaints as URA strives to deliver a delightful client experience. This in addition to a service charter that defines our service offerings to clients.
The over 40 Non-Intrusive inspection machines that were installed at major entry points such as Mpondwe on the Uganda - DRC border in Kasese District, Entebbe international airport and other boarder points, have helped combat smuggling and entry of prohibited goods into the Ugandan market. Intelligence has also intensified with the use of NII technology thus increasing revenue collections.
The Bonded Warehouse Information Management System (BWIMS) was launched in November 2022 for better management and accountability of cargo under customs control. BWIMS enables the integration of bonded warehouses stock management systems with customs systems, ensuring seamless information exchange among different government agencies, freight forwarders, and consolidators.
URA launched the Air Cargo Control Unit (ACCU) in June 2022, at Entebbe Airport, to address trafficking of various illicit goods such as drugs, wildlife, firearms and nuclear materials among other restricted and prohibited goods.
The new Digital Tracking Solution (DTS) has increased collection of excise duty from 13 consumer goods while curbing revenue leakages and reducing penetration of counterfeit products onto the market. For the period July to December 2022, URA collected UGX 919.61 billion from local excise duty.
The unique labels contain security features that can be tracked and traced along the distribution chain. They are being applied to beers, soda, juice, wines, whiskeys, water, sugar, cement, tobacco cooking oil and cigarettes, among others.
In 2021, URA introduced the instant Tax Identification Numbers issuance for individual taxpayers. This increased the number of taxpayers on the taxpayer register to the current 3.5 million taxpayers from a meagre 2 million as a result of reduced turn-around time for TIN acquisition from 3 days to same day delivery.
Stakeholder engagements
For his three years at the helm of tax administration, stakeholder engagements went a notch higher to promote a tax compliance culture amongst Ugandans who are involved in business and employment. Some of the key stakeholders engaged include various associations like the Uganda Manufacturers Association, the Gold Refiners and Exporters association, the Bankers Association, the Uganda Hotel Owners Association, the Judiciary, KACITA, freight forwarders such as UCIFA, Motor Vehicle dealers, among others.
In 2021 and 2022, URA accredited 38 new operators for the Authorized Economic Operators program which enhances trade facilitation, promotes security of international trade and promotes voluntary compliance to customs laws.
In this same period, URA has embarked on trade facilitating moves such as signing of the Mutual Recognition Agreement (MRA) with China, an MoU with South Africa's Revenue Services body to ease export and import of goods to South Africa by the AEOs, to mention but a few. The MRA promotes trade in goods and market access between Uganda and the partnering countries.
On the international scene, URA retained its council membership on African Tax Administration Forum (ATAF), a platform that promotes and facilitate mutual cooperation among African Tax Administrations, for purposes of increasing revenue mobilisation.
URA joined the Organisation for Economic Co-operation and Development (OECD) under the Exchange of Information program. This is a tax compliance tool that supports audits and investigations on cross-border transactions, especially for multinationals and high net worth individuals. This is a tool that URA has actively implemented with a growth in number of requests from two in 2012 to over 170 between 2014 to 2022 with tax recover of UGX 259,935,498,396 in the same period.
In addition, URA has equally built synergies with various organisations both internally and externally to improve service delivery and also expand the tax register. Internally, these include ministries, departments and agencies such as UMEME, National Identification and Registration Authority, National Water, and Sewage Corporation, Uganda Registration Services Bureau, and Ripplenami. These have been instrumental in improvement of rental tax collections which have been progressive from UGX 12.44 billion in December 2021 to UGX 17.06 billion in December 2022.
Externally, URA has had over 18 benchmarks from other countries and signed Memorandums of Understanding with revenue bodies like the His Majesty Revenue and Customs of the UK, South Africa Revenue Services, African Tax Administrations Forum, East African Regional Authorities, East Africa Revenue Authorities Commissioner Generals.
Alternative Dispute Resolution (ADR)
ADR is a voluntary, participatory and facilitated discussion over a tax dispute between a taxpayer and the Commissioner. This has been operationalized under Musinguzi's leadership for the last two years where both the taxpayers and URA have come together to resolve their disputes outside the court system which is sometimes tedious and time consuming
In hindsight, ADR seeks to enrich the entire dispute resolution process by providing flexibility and timely/early dispute management without the limitations imposed by judicial and quasi-judicial processes in regards to technical procedures, untimely decisions and the rising costs of litigation.
Some of the benefits realized from the implementation of ADR include expedited resolution of tax disputes, decreased cost of tax dispute resolution associated with litigation. It has also enhanced cordial relationships between Uganda Revenue Authority and the taxpayer, improved service delivery to the taxpayer and tax advisors as well as addressed customer concerns and improved tax compliance and confidentiality.
ADR statistics July 2022 to March 2023
No of cases received by ADR oversight committeeNo of cases concludedNo of cases Referred to mediation by TATNo of cases concludedTotal Tax collectable after ADR/ Mediation
62423517012980,535,359,113 (TAT guided mediation)
1,287,370,756 (cases concluded by the oversight committee)
Voluntary disclosure
This is a new program that was introduced in the URA in 2020 under a Memorandum of understanding with the His Majesty Revenue and Customs, the UK revenue administration.
Voluntary disclosure is where a taxpayer approaches URA and willingly declares his or her business information and tax affairs to URA with a commitment to tax compliance thereafter.
Currently the program is being implemented in Uganda whereby a taxpayer voluntarily applies for the program and receives a certificate thereafter. Some of the benefits of the program include avoidance of paying accumulated interest and penalties, provides a fresh start for the taxpayer, and opens room for dialogue with URA.
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So far, 47 taxpayers have joined the new program and tax education continues to attract more taxpayers to the program as they understand how it works and benefits them.
"We want to see change in the tax paying culture of Ugandans as well as improve the collecting efforts of the taxman with the activation of the voluntary disclosure program," said John Musinguzi.
Tax Education
Approach to TE was redefined to have a tax education needs-based strategy to train taxpayers with the relevant knowledge of their responsibilities, rights, obligations and the importance of business formalization.
Tax education is geared towards simplifying understanding of tax for Ugandans from the grassroots level that is largely comprised of the informal sector. Prioritisation of taxpayer education is hinged on the strategy to empower taxpayers with information on their rights and obligations so that they voluntarily comply with tax laws.
The Tujenge Uganda Buses is a mobile service office that was launched to bring services such as taxpayer education, register expansion and cleaning, targeted filing ratio analysis, tax advisory services and stakeholder engagements, closer to the hard to reach areas where URA has no office.
Other tools of Tax Education being used to engage taxpayers include tax katales, tax clinics, televised tax barazas, radio and television talk shows, door-to-door sensitizations, production of brochures, hard and soft copies of taxation handbooks, webinarsamong others.
Enhancing the Human Resource Function
Under Musinguzi's leadership, URA increased efforts and resources to staff training and sensitisation. Periodic refresher courses are availed for staff to understand their role and improve service delivery. This was strengthened by the creation of a fully-fledged learning and development division that spearheads staff training and developments. They provide various international and locally accredited courses for staff capacity development.
In addition, URA strengthened her human resource base with over 650 employees who were deployed to different departments to fast-track revenue mobilisation efforts.
For the remaining one year of his appointment, Musinguzi still has eyes set on growing Uganda's tax to GDP ratio from 13% to at least 18% by FY 2024/205, as stipulated in the DRMS. He still looks towards tax education and sensitisation, continued roll-out of technology and use of data in revenue collection, stakeholder engagements and staff skilling and integrity enhancement as tools that will drive voluntary taxpayer compliance.
