URA can fund national budget, say experts
Uganda is capable of financing its national budget fully if citizens are sensitised on payment of taxes, experts have said.
Uganda finances 70% of the national budget from locally generated revenues. Francis Kamulegeya, the director of tax services at Price-water House Coopers, said tax collections from the Uganda Revenue Authority (URA) are dropping much as the economy seems to be growing.
“Uganda has the capacity to generate funds locally to fund the entire budget,” he said. This was during the Oxfam and Southern and Eastern Africa Trade Information and Negotiation Institute (SEATINI) Tax Justice Network Africa meeting at the Lake Victoria Serena Hotel last week.
The two-day event was supported by the European Union through the Democratic Governance and Accountability Programme.
Kamulegeya cited equity and fairness as some of the principles of a good tax system.
“A tax system should not impede productivity. A taxpayers’ charter should be published and translated in local languages to grow revenue. Revenue has remained stagnant over several years,” he said, adding that the little revenue collected is not properly utilised.
“We need to win ourselves from depending on donors. The big informal sector, which is outside the tax net, is resulting in a lot of tax leakage and revenue loss.”
Kamulegeya noted that agriculture, the biggest employer and source of livelihood for many Ugandans, contributes little tax revenue.
He said political, civic and religious leaders must support URA’s efforts of widening the tax base and also hold the Government accountable with regards to how tax revenue is spent.
Simon Ngabirano, the URA supervisor of service support in the domestic tax department, said poor service delivery is a hindrance to tax collection.
“People are demanding to know what their taxes are doing,” he said. Johnson Gumisiriza, the principal economist in the local government finance commission, said tax assessment and determination should be made easy to understand by an average tax payer.
“Taxes should be fair to generate the revenue required. They should not favour one group over another and should not be designed to interfere with individual decision-making,” he said.
Gumisiriza said the taxes should be enforced in a manner that facilitates voluntary compliance to the maximum extent possible.
“Tax should not be regressive. If a poor man’s chicken of sh3,000 is charged market due of shs300 (10%), while a rich man’s cow of sh200,000 is charged market due of sh2,000 (1%) that is unfair.”
Jane Nalunga, the SEATINI country director, said tax can be used as a tool for development.
“We need to link tax payment to service delivery,” she said. Henry Bazira, the chairperson of the Civil Society Coalition on Oil and Gas, said Uganda cannot be transformed into a first-world country with revenues from oil alone.
“The challenges alone are more than the 2.5 billion barrels of oil discovered,” he said.
By Patrick Jaramogi, The New Vision
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