By James Asiimwe Kamara
Tax is a price we pay for a civilized and organized society. It is the major source of revenue that enables governments world over to provide public amenities for their citizens. Whereas the Government of Uganda is mandated to collect tax from eligible citizens, it performs the role within the premise of a set legal framework and puts into consideration the rights and obligations of taxpayers.
Uganda is operating a modern tax regime where the opportunity to determine how much tax to pay is first extended to the taxpayer. This is referred to as a self-assessment regime. This means that Uganda’s tax system permits a taxpayer to determine his/her chargeable income and the tax due and payable. To do this, taxpayers are required to file tax returns and pay the tax declared.
A taxpayer who fails to submit a self-assessment return will be assessed by the Commissioner to the best of his/her knowledge. Additionally, a taxpayer who does not submit a return by the due date is liable to penal tax in accordance with the law thus attracts interest.
An assessment is issued by URA only when a taxpayer fails to fulfill his/her tax obligation of filing a return. This assessment, is usually the source of tax disputes among the tax body and taxpayers.
However, a taxpayer has a right to object to such an assessment by filing a return to declare the correct tax liability to URA. This is because the estimated assessment may not be the final tax.
On the other hand, where tax is not paid by the due date, it becomes a debt due to the state and as an organization mandated to collect revenue for national development, URA will follow a legally guided procedure to recover unpaid tax through engagement and education first, and finally enforce only when required.
For a taxpayer who fails to pay tax assessed, URA will send reminders in form of emails, text messages and follow up calls over a grace period of 28 working days. If there is still no response from the taxpayer, URA will then invite the taxpayer for a face-to-face dialogue to discuss the pending arrears.
During the dialogue, the taxpayer may request to settle the liability through installment payment arrangement.
If a taxpayer does not honor the dialogue, URA may issue an agency notice instructing any person who:
- owes or may subsequently owe money to the taxpayer;
- holds or may subsequently hold money, for or on account of, the taxpayer;
- holds money on account of some other person for payment to the taxpayer; or
- has authority from some other person to pay money to the taxpayer.
to pay the amount specified in the agency notice to URA.
Agency notice is what the former Leader of Opposition was referring to in a video that made rounds on social media over the weekend. It should be noted that agency notices are only issued in cases of extreme non-compliance by a taxpayer who fails to pay taxes due or doesn’t respond to an invitation to agree to an arrangement on how the debt may be recovered.
An agency notice is issued to third parties with full knowledge of the taxpayer in question because on issuance of an agency notice, a copy of the notice is sent to the taxpayer’s registered email with URA.
As URA, we endeavor to dialogue with taxpayers to reach a win-win situation. Therefore, there are a number of avenues that have been put in place to enable businesses to comply, even where a taxpayer has fallen short. These include the Alternative Dispute Resolution and Voluntary Disclosure which have been embraced by many taxpayers.
Our interest is to have as many businesses as possible growing into self-sustaining entities that last generations. The tax regime, through the self-assessment system supports success of businesses because tax is arrived at based on a declaration made by the taxpayer.
The information that the former leader of opposition published over the weekend is therefore not accurate as far as Uganda’s tax regime is concerned. Revenue mobilization requires all hands-on deck and every Ugandan pulling in one direction by way of paying their fair share of tax. This, calls for a proactive tax behavior and record keeping on the part of taxpayers.
URA appreciates all taxpayers who consistently honor their tax obligations to give Uganda a chance towards attaining self-sustenance. URA pledges to continue putting taxpayers first through the provision of a delightful revenue service at the lowest cost possible.
James Asiimwe Kamara
URA’s Acting Assistant Commissioner Public & Corporate Affairs
For more information call: +256772140019 or Email: [email protected]