The Ministry of Finance has released a performance report

Since the current financial year started in July 2021, Uganda Revenue Authority (URA) has been failing every month to achieve the revenue collection target.

For the last six months, a revenue collection shortfall of sh880.9b has been registered.

The finance ministry is optimistic that with the full reopening of the economy, which takes effect from today, revenue collection will greatly improve.

The signs are encouraging, a Uganda Bureau of Statistics (UBOS) report on the Uganda National Household Survey 2019/2020 indicates that the rate of employment stood at 39% of the population in 2019/2020 down from 48% in 2016/17.

Unemployment reduced to 9% in 2019/2020 compared to 10% during the same period.

Also, there are plans to widen the tax base.

Two months ago, Uganda Revenue Authority (URA) announced plans to identify 2,000 rental income taxpayers over the next three months.

The URA Commissioner General, Mr. John Musinguzi, said the rental income tax slice of the overall tax base is shaped by non-compliance with only 8 percent of landlords in Uganda fully remitting their dues in taxes.

“This (non-compliance) is unfair to other compliant taxpayers from other sectors of the economy," said Mr. Musinguzi who specifically noted that such failure to render unto Caesar, as it were, disincentivizes other taxpayers.

In order to put paid to this non-compliance in paying rental income tax, URA has set in train the Rental Tax Compliance System.

This System will serve as a preparatory measure to inaugurate and institute several sweeping initiatives enabling URA to ensure that 88 landlords, owing about 285 properties in the Greater Kampala area, pay income tax.

As things stand, according to the commissioner, these landlords have been avoiding paying rental income tax and this costs URA billions of shillings each year in uncollected taxes.

The System, which will be rolled out to rollback non-compliance, is a software-based integrated setup that will highlight individuals or corporations likely to underpay or avoid paying rental income tax altogether.

It is essentially a pre-emptive and proactive System developed around deploying data gathered from relevant or stakeholder government agencies and utilities.

These agencies and utilities comprise the ministries of Local Government, Kampala Capital City Authority, National Water and Sewerage Corporation, Ministry of Lands, National Identification and Registration Authority, National Information Technology Authority, the Uganda Communications Commission, Uganda Registration Services Bureau among others.

This System evolves out of technology developed under the aegis of the Ministry of Finance and URA while originated by RippleNami, a private software company that shall minutely parse compliant and non-compliant tax payers using this system.

Although this System might seem groundbreaking for URA, it actually arises out of a changing context in which URA is using a sweep of digital based solutions to enhance tax compliance.

URA has already been using the Digital Tax Stamps and e-invoice towards broadening the tax base in Uganda.

In this vein, the newly-minted Rental Tax Compliance System is a building block adding to the monumental attempts by URA in mobilizing taxes to underpin government’s provision of goods and services to Ugandans.

It was recently noted by URA that the tax base in Uganda can be narrowed down to about one million taxpayers and this has led to a Gross Domestic Product being unequal to the demands of sustainable national development.

Sustainable national development is largely fuelled by taxes used to drive the fiscal locomotives of human capital (education, health), infrastructure (power, digital, transportation and urban) and private business growth.

Mr. Musinguzi said that this new System will effectively use intricate data analysis and data optimization to collate and conflate various data types from relevant government ministries, departments and related agencies and tally them with rental properties and their respective owners in the Greater Kampala Metropolitan Area.