URA shortfalls in the last four financial years are a result of harmful incentives – CSBAG
CSBAG blames Gov’t for URA shortfalls – Government of Uganda has been faulted for contributing towards Uganda Revenue Authority’s (URA) failure to hit the tax collection target in the last four financial years.
Civil Society Budget Advocacy Group (CSBAG) said the government has repeatedly failed to offer the required support to URA by ignoring the necessary reforms that need attention
According to CSBAG, the government has instead focused much on counterproductive measures such as OTT tax.
A shortfall of over 700bn shillings has been recorded by the revenue collector below a target 9.7 trillion in the 2019/2020 expectations.
“The environment of discussion at this moment requires the minister of finance and parliament to get back to the table first, removal all these sinful tax and harmful tax proposals. When you look at how vat on WhatsApp, OTT, tells you that some of these taxes are counterproductive. You want to pick a billion but you end up picking less,” Julius Mukunda, Executive Director CSBAG said.
“So we are saying that the government should stop looking at some of these taxes. It rather looks at other taxes that are not counterproductive,” Mukunda added.Tweet
Mukunda says the government has failed to bridge the leakages and implementation of the necessary tax reforms that would have raised tax revenue.
“Revenue leakages are due to limited coordination and also lack of progression among government entities. For instance; 54bn was never collected due to non-coordination between URA and gaming board, 393bn was never collected due to URA failure to access integrated financial managTweet
Mukunda further noted that harmful tax incentives like income tax exemption, regular tax refunds, has caused huge loss of billions of shillings.
Also, they said the government sometimes fails to implement some priorities planned in a particular year especially when funds from donors have reduced.
“Introduce income tax exemptions to selected investments. The other element on how to understand wrong tax exemptions is that we don’t follow up to see actually where these tax exemptions are being implemented according to agreed agreements, but also we still strongly believe thaTweet
However, Mukunda reasoned that if at all government pays due attention to the mistakes in the revenue collection sector, URA will excel.