URA facilitates corruption, says new report

 

Residues of fruits and vegetables near a market in Kampala. Nema has warned that if the food chain is not adequately managed to avoid waste, food production may soon dwindle. PHOTO BY FAISWAL KASIRYE. 

 

 

By ISMAIL MUSA LADU
 

 

Most businesses are unwilling to formalise their operations because they are helped by unscrupulous employees of the Uganda Revenue Authority, says a new report.

The report by Uganda Debt Network (UDN), an NGO involved in good governance causes, says instead of collecting taxes, the employees resort to taking bribes. “Some informal sector actors connive with the Uganda Revenue Authority officials and local government tax law enforcers to dodge paying taxes, but end up paying bribes in order not to be caught on the wrong side of the law,” reads the report.

With such anomalies, informal businesses lack the motivation to formalise as kickbacks look the easy option, said the report. According to the Uganda Bureau of Statistics, the informal sector covers all business activities that are normally characterised by: absence of final accounts, have less than 5 employees, no fixed location, in most cases not registered and sometimes such businesses are operate for a short time only.

The UDN director of programmes, Mr Julius Kapwepwe, said the findings confirm the widely held view that the problem of tax compliance lies in the tax prefect’s administration system.


According to the report, the current tax administration seems to favour those in the formal sector and those who can pay bribes—mostly informal sector players.

Kampala City Traders Association spokesperson Isa Sekitto said corruption at URA is not a new thing: “I am aware of a situation where a container of shoes was entered into URA system as mosquito nets and instead of paying Shs30m only Shs4m was paid as revenue.” But URA’s assistant commissioner for compliance management, Mr Protazio Begumisa, said the tax body has over the years registered successes because it has fought corruption.

“From what I am hearing it seems we need to get back to the drawing board,” Mr Begumisa said. His colleague in charge of service management, Mr Simon Ngabirano, however criticised the report, saying it’s laden with several inaccuracies, especially mixing the operations of formal and informal traders.

The State Minister of Finance (General duties), Mr Fred Omach, said his ministry would study the report and implement the recommendations, including instituting an investigation into the allegations. But in his speech he said the tax body has some challenges, but overall it has performed well. He said paying taxes is an obligation, even in the bible, stressing the biblical saying that goes: “Give Ceaser what belong to him (Ceaser).