President Museveni has said it is too early for tax body, Uganda Revenue Authority(URA) to celebrate since there is still room for improvement in the amount collected in form of taxes.
“When we had just come from the bush, people were collecting money and put in their own pockets. It was in 1991 when we realized there was massive stealing. That’s how we came and said we must create a special department and the idea of URA came. The tax collection jumped to 11% from 4% of GDP. However, it has stagnated there all this time,” Museveni said.
The president was on Wednesday speaking as URA celebrated 30 years of existence during a function held at the Kololo independence grounds in Kampala.
Museveni said whereas a lot has been achieved by the tax body in the last 30 years, it has a potential of achieving more if all loopholes are closed.
“Although you are congratulating yourselves, performance doesn’t lie. We can know if the tax people are doing work . The tax to GDP ratio has stagnated around 11%, 12% and 13%. As soon as we created URA we jumped to 11% but we are now stuck there. Where is the other money going? Buildings are increasing and imports. Do you think God is happy with you,”Museveni said
The president also blamed URA for the delayed installment of x ray machines at all the country’s entry points to avoid smuggling of goods.
Earlier, the URA commissioner for customs, Abel Kagumire had informed the president that a total of six x-ray machines had been installed at Busia, Malaba, Mirama hill, Mutukula and Elegu border points, whereas 39 others are yet to arrive in the country.
However, the president said he had ordered for the installation of the machines over 10 years ago but said it was appalling that the work is still ongoing.
“Very many years I got intelligence that there was a lot of misdeclarations . The border points are many but these x-ray machines will eliminate smuggling. We can link them with state house. I can put my computers to see vehicles passing. Modern technology simplifies work,” he said.
The president noted that some of the officials from the tax body have avoiding the use of such technology yet it can greatly help to deal with smuggling.
Last year, government through the Ministry of Finance contracted RippleNami, an American technology company to develop the Rental Tax Compliance System that enables government integrate data to match real estate properties to their individual or corporate owners.
The system will enable government identify individuals or corporations that have been underpaying their rental income tax obligations.
Speaking on Wednesday, the president said URA had ignored by noted that the American company will help government get a lot of money in form of taxes from rentals .
“I got information that people were hiding rented houses, declaring them as owner occupied buildings. Even the ones declared were being undervalued. This was intelligence I got,” he said.
He insisted that if collections go up, government would not need to borrow from development partners to finance the budget.
“The GDP is now 44 billion dollars. If it is as it is now and we are to collect 20% of that, we would not borrow. I heard your minister praising you for collecting shs19 billion last year but if you collected that amount(shs19 billion) and the budget is shs42 trillion, it means you must borrow internally and externally up to ssh20 trillion.”
He tasked URA to ensure the tax to GDP ratio goes up .