URA, Well Done, But There’s ALot More To Do
Taxes in Uganda are viewed as a reserve for large, highly
profitable international organizations, and this aloofness by the population
has breed a culture of nonchalance in the general way the country is managed.
As I go on to share my experience with URA, I have made an effort
to write this article in the simplest of terms to make it understandable for
all.
As a law-abiding citizen of Uganda, I would jump at any
opportunity to contribute to her development. It is in this spirit that I
sought to register for a TIN number for the private business that I am involved,
to enable me pay taxes. I registered a company with URSB and then proceeded to
apply for a TIN (Tax Identification Number). There is a relationship between
the type of registration you select (company, business name, etc.), and the tax
implications, too bad I only got to learn about this much later.
I was connected to someone in URA who charged me to handle
the TIN application process, which I didn’t object to, considering the complex
online registration process.
After receiving my TIN, I made inquiries about doing my
returns personally and was referred to the Diamond Trust branch where free
classes are offered on this. My details
were taken and I was told to wait for an invitation to the classes. All through
December 2016 to March 2017, I kept dropping by to make sure that my name
hadn’t been erroneously skipped to which I was informed that they wanted to
grow the numbers first. I was eventually called for the training in May 2017
and despite the few hiccups (like those doing the training, having scanty
information on some of issues being taught), it went well. It was then that I
was able to make sense of the emails I had been receiving about making my
returns and the penalty I would incur for late submission.
According to the communications, I had been penalized UGX
1,000,000/-for months of delay in filing provisional returns but I was informed
that I could appeal this penalty.
With a solid excuse (the fact that I applied for training in December
2016 & was only invited in March 2017), I proceeded to file an online appeal,
and so begun the cycle of confusion. From different officials ‘correcting’ me
on what its referred to (appeal, objection, etc.), to conflicting advise on how
to go about, and which branch office to visit, the mix-up was evident, even in spite
of the courteous and friendly service at all incidents.
One official to whom I had been advised to address my
appeal/objection/plea informed me of the zero chances I had of it being waived
as it had already been ‘entered’ in the system.
I was left wondering why an appeal and objection process was
in place if there was no hope of having them reversed, even with justifiable
cause.
5 locations and 23 interactions later (all with different
officials), at my final attempt, I was referred to a somewhat senior supervisor
who, on checking the system said that I should have never been penalized in the
first place because URA does not penalize late submission of provisional
returns. I was relieved and alarmed at the same time; how could such an anomaly
go unnoticed by the over 20 staff I had made inquiries with? What if I had
simply gone ahead to pay this penalty?
On further probing, she informed me that my application had
been (unknown to me) back dated and I was therefore registered in a previous
financial year than the actual one I had registered in, which explains the
penalty for late submissions. On asking why, I was informed that its done to
avert cases of people offering to join the taxed-lot after years of doing
business untaxed.
Just like me, many Ugandans are increasingly getting involved
in business and are eager to play a role in the development of Uganda through
tax payment. They are however being set off by a number of factors that I will
briefly delve into;
Tax Management Is Complicated And Costly.
There aren’t many ordinary Ugandans who individually mange
all their tax-related issues, from understanding the tax laws, to TIN
application and submitting returns annually. Let’s think of it this way, if I
had to employ and pay someone to calculate and effect my payments to Umeme so
that I could have electricity, I would be forced to consider evading the entire
system in search for back hand connections. The conflicting information I kept
receiving from the different branches and URA staff is evidence to this.
Local Businesses Not Taxed
URA and the government would benefit substantially by widening
the country’s tax base if efforts were made to bring on board more locally
based businesses rather than increase taxes of the few big players, which only
threaten their existence; any job creating business that shuts down due to tax
constraints should be an embarrassment to us all!
No Incentives To Pay Taxes
Many businesses are operating profitably without paying taxes
and don’t even feel the need to join the taxed bracket. Those that do so are
only conforming to requirements from potential clients (usually large organizations
and parastatals) for tax clearance certificates.
My
solutions to this would be;
- · Invest in enforcing legal requirements for businesses and organizations to deal exclusively with only the tax compliant businesses (those with a tax compliance certificate). This could be done by penalizing companies that make payments to businesses that aren’t registered with URA (TIN numberless). It’s absurd that many government agencies are actively dealing with uncompliant and unregistered businesses. We should not only Buy Uganda Build Uganda, but Buy Registered Uganda, Build Uganda. It is only when the government bodies and parastatals take a stand, that ordinary Ugandans can be asked to do the same.
- · With a little integration and coordination, URA has at its disposal the URSB which can go a long way in ensuring tax compliance. Imagine if all non-compliant companies are deregistered regularly for ignoring calls to pay their taxes. There are many private businesses that will apply for a TIN and not pay taxes, knowing that its available if ever asked for.
- · Try to uncomplicate tax issues. if indeed URA was created to manage tax issues of Uganda, its services and procedures should be known to all Ugandans, even the uneducated who make up the majority. Tax laws and procedures should be translated and efforts made into their dissemination to the masses.
- · The little-publicized instructional classes that are held at the URA Diamond Trust building are a good initiative, but it became apparent that this innovative idea was yet to gain buy in from the organization as a whole. Many of the staff at the various branches I visited were unaware of the existence of these classes. The long period taken to raise a reasonable class size also goes to show that they are not well publicized. What about the fact that these classes were only being held in Kampala, and at the said branch, think about all those potential tax payers who are based outside Kampala? With the availability of online platforms such as YouTube and Vimeo, URA should come up with instructional videos showing a breakdown of procedures to follow for the various services sought, from TIN application, filing returns, to appealing assessments, etc.
- · The existence of a toll-free line (which is also not widely known) is a step in the right direction, but this is subject to human error and misinformation. My interactions with most junior staff, who end up handling the bulk of queries revealed that the majority of them are clueless on the general workings of URA.
- · URA should, just like KCCA, (or together with) invest in monitoring and inspection teams all over the country. Regular spot visits to assess the compliance of local businesses can be carried out, where views from the public can also be collected.
There is need to bring services closer to the people using
all channels available. I must applaud URA and the entire management team for
their prompt response on social media platforms, but a lot more remains to be
achieved in reaching out to the ‘untapped potential’ out there.
Owomukama ‘Woofy’ Matthew
@woofymatt
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