By Ismail Musa Ladu
Posted Wednesday, November 27 2013 at 00:00
In Summary
Uganda’s tax contribution to the economy has stagnated at 12.5% in nearly over a decade.
Uganda will have to review its tax revenue model
if it is to increase the number of taxpayers, a senior tax expert has
advised.
According to the Director of Institutional
Development at The African Tax Administration Forum (ATAF), Mr Lincoln
Marais, Uganda and other African states should embrace revenue
collection models that are not just easy to comprehend but also fair
across the board.
“What is your revenue collection model like?” Mr
Marais asked while responding to a question on how Uganda and other
African countries could increase its revenue collections without
burdening the tiny formal sector that is already shouldering the biggest
tax responsibility.
He continued: “You must be transparent in your
application. Provide taxpayers with all the necessary information
related to tax matters. And you must ensure that paying taxes is made
easy. And taxpayers must at all times know that as a tax body, you have
the ability to enforce compliance.”
Speaking last week to some African journalists in
Johannesburg, South Africa, Mr Marais said unless African countries get
the right tax model, they will keep grappling with revenue collection
targets. He, however, was of the view that ATAF is willing to help its
members across the continent fix the problem—a reason why ATAF was
created.
Worth noting is that over the years, Uganda has
been growing its revenue collection rather steadily, although its (tax)
contribution to the economy has stagnated at 12.5 per cent in nearly
over a decade.
This, according Mr Godfrey Akena, a tax analyst
with East African School of Taxation, is explained by the Uganda Revenue
Authority (URA) inability to widen its tax base over the same period of
time.
To deal with that, ATAF’s Head of Multilateral
Cooperation Thulani Shongwe, argues that the population must begin to
demand that revenue authorities be part of the segments that demand
value for taxes they collect.
With that, Mr Shongwe says that compliance will be boosted, making tax collectors’ jobs easy.
Earlier, the G20 Communiqué in a meeting in
Johannesburg, South Africa, endorsed proposals for automatic exchange of
tax information between member countries and also made a call for all
countries to pursue similar policies. “Developing countries should be
able to reap the benefits of a more transparent international tax
system, and to enhance their revenue capacity, as mobilising domestic
resources is critical to financing development,” reads the G20 leaders’
communiqué.
This debate forms part of wider campaigns to boost
tax revenue for individual members’ countries especially in the
developing countries like Uganda.
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