MPs put URA on the spot for over taxation

Members of Parliament from various parliamentary committees have accused Uganda Revenue Authority (URA) of suffocating businesses by over taxing and creating unfavourable environment for them.

These committees included the committees on Budget, National Economy, Public Accounts Committee, COSASE and East African Affairs.

This event took place at Serena Hotel where URA held a strategic engagement with MPs to discuss issues of Domestic Revenue Mobilisation for Development Strategy (DRMS) review under the theme: "Liberating Uganda from Economic Dependence."

During the engagement where journalists were locked out, the Nile Post understands that MPs were not happy about how the tax body has handled the business community.

During the engagement, a number of MPs cited various businesses that were frustrated by URA including their own hence creating a chaotic discussion.

Sources told us that Idah Nantaba, the Kayunga Woman MP, wondered why the tax body is not interested in helping Ugandans to start business, invest in the country and be able to sustainably run those businesses.

“URA is suffocating businesses. They are killing them. I am one person who started a factory in Kayunga for oil production and soap production but within six months, I could not breakeven. They levied taxes on raw materials I was importing from Congo. I was importing pump oil but within six months I could not breathe and I had to close down because they were taxing raw materials... but if it was an Indian, they would have given him tax holidays," said Nantaba amidst applause from other legislators.

She reportedly said whereas there is need to widen tax base, the tax body is not allowing businesses to take off and thrive.

"In fact Kenya is taking advantage of the Ugandan market. I want to implore the commissioner general to please help small businesses to thrive, to survive actually because we cannot compete with foreigners who are taking advantage of tax concessions and we keep giving them and denying them to Ugandans," she said according to our sources.

Sources told us that Dr. Michael Lulume Bayigga, MP Buikwe South questioned whether URA cares whether the businesses from which taxes are collected always survive or not.

"We realised that many businesses collapse and they collapse simply because of these taxes that are levied on them. The health of these businesses is affected by URA. Whether or not our tax collectors have the impression that these businesses should continue to survive so that they can go back another year," Lulume said according to our sources.

URA's commissioner general John Musinguzi is said to have retorted that MPs commitment and support of taxation is very important in realising Uganda’s economic independence.

He said URA is determined to improve its efficiency in management and administration of the tax system and to collect every penny of taxes due, with the support of everyone in this room and beyond.

"The DRMS is a 5-year medium-term strategy for government revenues, to guarantee a reasonable, realistic, and practical approach to sustainable resource mobilisation. It is generally agreed that the realisation of this strategy requires a collective effort and commitment across government, civil society, private sector, and development partners to achieve citizen buy-in for the reforms outlined therein," he reportedly said.

He said the engagement with Members of Parliament is timely because it allows the tax body to review the rollout so far and support desired from key partners in the implementation of this strategy.