About me.

Andrew M. Mwenda is the founding Managing Editor of The Independent, Uganda’s premier current affairs newsmagazine. One of Foreign Policy magazine 's top 100 Global Thinkers, TED Speaker and Foreign aid Critic



Monday, July 25, 2016

URA’s poor tax administration



How corruption has disabled mechanisms through which the business community can fight for better tax laws

Uganda’s ratio of taxes to Gross Domestic Product (GDP) has remained almost stagnant for 19 years. In 1997, it was 11%. Since then it has risen to 13.7% only to fall back to 12%. This is in spite of the fact that over this period, monetary GDP has increased from 76% to 94% and taxable GPD from 52% to 81% today. Last financial year, the Uganda Revenue Authority (URA) collected Shs 11.3 trillion in taxes against a GDP of Shs 86 trillion as per June 30th. This means that the tax to GDP ratio is now 12%.

I suspect URA collects about 67% of taxes due. I am aware that as a poor country with a low industrial base, Uganda’s economy is dominated by multitudes of small family businesses that are difficult to tax. Yet I still think that with prudent tax laws and administration URA can collect about 18% of GDP in taxes i.e. an extra Shs 4.2 trillion.

In 1970, the tax to GDP ratio in Uganda was 22%. This was in large part because government was taxing especially agricultural exports. Today Uganda exempts all agriculture from taxation. Even large scale ranchers like President Yoweri Museveni with 21 square miles of land and 5,000 heads of cattle making about Shs500 million as monthly income are exempt. Yet in spite of this, agricultural growth in Uganda has been the most sluggish, averaging about 2.9% per year over the last 20 years. But this article is about improving tax administration not broadening the tax base.

I know many business persons in Uganda doing import and export trade (corporation tax), real estate and other informal trades that make a lot of money but don’t pay any taxes at all. Indeed, the biggest mistake for a business in Uganda is to be compliant and honest like this newspaper has done for the last nine years. If a business has a tax dispute with URA, its officials have no incentive to resolve it.

For example, The Independent got into a minor tax dispute with URA in 2012. URA has conducted four audits without resolving the matter. Every friend has told me to bribe URA officials to end this dispute. I have refused because we have been totally compliant. Instead of getting acknowledgement, URA officials have spent four years looking for a fault. Why would URA spend so much of its time on a company that is largely compliant when it is saddled with tens of thousands who are not? It will become obvious later on.

For now, like many things in poor countries, the tax law in Uganda is copied and pasted from “best practice” in the developed nations of Western Europe and North America. It does not reflect the unique features of our reality. For example most businesses in Uganda begin as informal trades that grow with time. At a certain size they need to go formal so that they can scale and even tender for big government contracts or borrow from banks, all of which requires a tax compliance certificate from URA.

The main challenge facing URA is how to make such businesses find it easy to become compliant. Part of doing this means opening their books to URA for the last five years. This makes them vulnerable to huge tax arrears and penalties, enough to bankrupt them. The choice is to remain small (which many do) or bribe URA officials to reduce the tax liability. In short, URA has created an incentive structure where one is penalised for being compliant and another is rewarded for avoiding it or for paying a bribe.
Many business people keep their transactions informal in order to avoid the adverse impact of taxes on their businesses.

One reason for poor compliance is that URA does not have the resources to send teams to register every business or income stream. However, the major reason is that URA officials are lazy and corrupt. They are lazy because they are not keen to go and establish the different streams of income from which to generate more taxes. They are corrupt because they profit individually from noncompliance.

In my many unhappy encounters with URA officials, I have pleaded with them to be vanguards of change. I ask them to inform their superiors that the tax law as designed is the biggest impediment to tax compliance. My pleas fall on deaf ears. I have asked business people to use the different associations to lobby for tax reform and my efforts have yielded only derision and disinterest. Then my mind’s eyes opened to me something subtle – corruption. Only two (a lady and gentleman) who came to my office last week exhibited a keen interest in how to make many people compliant.

Many business people keep their transactions informal in order to avoid the adverse impact of taxes on their businesses. This is because URA officials visit these businesses to audit them in order to collect government taxes. Looking strictly at the law, the interests of the business people and URA officials are in conflict. Yet at the level of unofficial practice, they are actually consonant especially given the structure of incentives Uganda’s tax law engenders. I realised that this conflict between the taxpayer and the tax collector is resolved to their mutual benefit through corruption.

URA officials can show up and audit a business and issue the owner a huge tax bill – say of Shs5.6 billion on tax arrears for five years including fines and compound interest. Terrified that such a bill would bankrupt his or her company, the business person will offer to pay a bribe of Shs300 million to URA officials if they can cut down the bill to Shs1.2 billion. Thus the law offers both taxpayer and tax collector joint gains through corruption. The businessperson saves Shs 4.1 billion in taxes and URA officials pocket Shs300 million.
Over time, dealing with both URA and business persons, I have learnt the consequences of this collusion. The obvious one is that government loses tax revenue in such deals, a factor that limits its ability to serve its citizens. But the more subtle and even dangerous consequence is to URA as a government institution and to the business community as vanguards of tax reform.

Bribes demobilise business people from organising collectively to pursue tax reform. Instead business persons find it cheaper and more convenient to bribe URA officials. Government secures the acquiescence of individual business persons for tax laws that are collectively harmful to business generally. And for URA officials, bad tax law allows them to line their pockets. Within Uganda’s polity, hardly anyone has an incentive to reform the system.

amwenda@independent.co.ug

21 comments:

Kate Johnson said...

Hello everyone, my name is Kate Johnson.I was able to back my husband's phone remotely and gained access to all his texts and calls with the help of ghosthacker2351@gmail.com, he is reliable and really fast.I use him whenever I want to be sure about someone.if you require his services tell him I referred you.

dhacker said...

If you need to hack into any database, -YOU SUSPECT THAT YOUR PARTNER IS CHEATING, Erase criminal records hack , delete record, improve credit score, spy on whatsapp,-Facebook ,hack text, phone, emails, as long as it's hack contact Me Via Email :: dhackerj7@gmail.com Whats- App : +1- 8572- 144- 678 very cheap and fast.

dhacker said...

If you need to hack into any database, -YOU SUSPECT THAT YOUR PARTNER IS CHEATING, Erase criminal records hack , delete record, improve credit score, spy on whatsapp,-Facebook ,hack text, phone, emails, as long as it's hack contact Me Via Email :: dhackerj7@gmail.com Whats- App : +1- 8572- 144- 678 very cheap and fast.

Mills Dachin said...

Hacking !! Hacking!!!
We are hackers for Hire, we delivered 100%✓guarranted

* Blank ATM card
* All kind of loans
*University Grade
*Iclound
*Criminal Records
*Hack spouses phone
*Binary Recovery
*BTC Mining etc
* Cyber Scam recovery
etc...!!!

Remember your happiness is our pride
All you need do just Email:- pointekhack@gmail.com
/hyperhackerone@gmail.com
/phdatabasesolution@gmail.com

Mills Dachin said...
This comment has been removed by the author.
Mills Dachin said...
This comment has been removed by the author.
Mills Dachin said...

Hacking !! Hacking!!!
We are hackers for Hire, we delivered 100%✓guarranted

* Blank ATM card
* All kind of loans
*University Grade
*Iclound
*Criminal Records
*Hack spouses phone
*Binary Recovery
*BTC Mining etc
* Cyber Scam recovery
etc...!!!

Remember your happiness is our pride
All you need do just Email:- pointekhack@gmail.com
/hyperhackerone@gmail.com
/phdatabasesolution@gmail.com

Mills Dachin said...

Hacking !! Hacking!!!
We are hackers for Hire, we delivered 100%✓guarranted

* Blank ATM card
* All kind of loans
*University Grade
*Iclound
*Criminal Records
*Hack spouses phone
*Binary Recovery
*BTC Mining etc
* Cyber Scam recovery
etc...!!!

Remember your happiness is our pride
All you need do just Email:- pointekhack@gmail.com
/hyperhackerone@gmail.com
/phdatabasesolution@gmail.com

Mills Dachin said...

Hacking !! Hacking!!!
We are hackers for Hire, we delivered 100%✓guarranted

* Blank ATM card
* All kind of loans
*University Grade
*Iclound
*Criminal Records
*Hack spouses phone
*Binary Recovery
*BTC Mining etc
* Cyber Scam recovery
etc...!!!

Remember your happiness is our pride
All you need do just Email:- pointekhack@gmail.com
/hyperhackerone@gmail.com
/phdatabasesolution@gmail.com

daniel said...

My ex ruined my credit due to his incessant extravagant spending spree, I found myself in a big mess. I talked to a credit repair company and I was told that it would take me non less than a year to fix my credit. I was devastated, that's a very long time which I can't cope with. I looked online and came across Credit Doctor's contact, hit him up and to my greatest surprise, my credit was repaired in 4 working days from 486 -810. I was so amazed and it didn't cost me too much really. I implore you to contact him on for all credit issues and hacking issues. No doubt that he's the best out there and your problems will be solved!
HACKINTECHNOLOGY@GMAIL.COM
+16692252253

Frank Santiago said...


Sir/Madam,

Have you ever searched for fund, loans, financial assistance or needs an accredited lender to help you meet with your needs and demands, then you have no alternative than to get an instant and reliable service from our loaning Agency. We offer loans ranging from Ten thousand Dollar to Twenty-Five Million Dollar($10,000, 000.00 – ($25,000,000.00). Loan duration is 1 to 20years (Maximum).

We offer loan at 3% interest rate per annum and with no credit check, we offer personal loan, debt consolidation loan, business expansion. Loan for any reason!

If you are interested, kindly provide us the following details.

• FULL NAME:
• HOME ADDRESS:
• SEX:
• AGE:
• PASSPORT/I.D NUMBER:
• COUNTRY:
• PURPOSE OF LOAN:
• AMOUNT OF LOAN:
• OCCUPATION:
• MONTHLY INCOME:
• LOAN DURATION:
• CONTACT NUMBER:
• CONTACT EMAIL:

Yours Sincerely,

Mr, Frank Santiago
Loan Service Controller,
Apply Email: officelibra@cash4u.com
Text Line WhatsApp+ ‪1 (470) 243‑4179‬

Rodney Bernt said...

CONTACT US FOR ALL KINDS OF HACKING JOB @ (rodney.bent@consultant.com) and Text Business Whatsapp : +1 (470) 243‑4179‬ We offer professional hacking services , we offer the following services;
-University grades changing
-Bank accounts hack
-Erase criminal records hack
-Facebook hack
-Twitters hack
-email accounts hack
-Grade Changes hack
-Website crashed hack
-server crashed hack
-Skype hack
-BTC Recovery
-Databases hack
-Word Press Blogs hack
-Individual computers hack
Control devices remotely hack
-Burner Numbers hack
-Verified Paypal Accounts hack
-Any social media account hack
-Android & iPhone Hack
-Text message interception hack
-email interception hack
-Untraceable Ip etc.
Contact us at (rodney.bent@consultant.com) or text Business Whatsapp: ‪+1 (470) 243‑4179‬) for more inquiry.
Track Calls log and Spy Call Recording.
Monitoring SMS text messages remotely.
Cell phone GPS location tracking. Spy on Whatsapp Messages.
Free Update and 100% Undetectable.
Track BBM messages and Line messages. Track Internet Browsing History and Read phone Access Address Book, totally worth your money, please no time wasters, he or she won't under any circumstances work for free, you can reach them by email (rodney.bent@consultant.com) or add on Hangout(rodney.bent101@gmail.com) call on +1(501)732-7155

Simon Federman said...

Dear sir,

I am a direct Mandate to a genuinely renowned Investment Finance Company offering Cash & Asset Backed Financial Instruments on Lease and Sale at the best rates and with the most feasible procedures.

Instruments offered can be put in all forms of trade and can be monetized or discounted for direct funding. For Inquiry contact.

Email: longmornprojectfinances@gmail.com

Skype: longmornprojectfinance@hotmail.com

Whatsapp : +1(661)262-9225

Warm Regards
Simon Federman.

Anonymous said...

Dear Sir,

We are broker firm in London-UK, we have direct Provider of BG/SBLC specifically for Lease and purchase, The provider is tested and trusted. We have been dealing with the company for paste 20 years. Interested Agent/Lessee should contact us.

Email: longmornprojectsfinance@gmail.com
Skype ID: longmornprojectsfinance@hotmail.com

whatsapp Number:+1(330)333-0498

Best Regard
Dean Thomas.

Unknown said...


If you really want to resolve cyber or database related issues, you definitely have no choice but to contact Cyber demon Services via Cyberdemonhacker432@gmail.com It took me quite a while to get through to them, but it was worth it in the long run. They went into the database of my dream company and entered my name. Regardless of the COVID-19, I have my dream job and work from home under quarantine. Cyber demon and his team are simply the best. They offer many other services like phone hack, email hack,recovery of documents from encrypted databases, credit enhancement, credit correction of school grades, correction of transcription
Retrieving Passwords and Emails, Hacking Social Network, Tracking and Monitoring, Stock Market Cheats and Much More
Contact them today at Cyberdemonhacker432@gmail.com and experience a whole new trend in cyber and hacking activity with short and prompt responses around around the clock. Their top professionals are always at your disposal

WE OFFER ALL KIND OF LOANS - APPLY FOR AFFORDABLE LOANS said...

Good day Sir/Madam,

This message is to inform you that MIKE MORGAN LOAN FINANCIER offer all types of L0ANS @ 3% annual rate. Are you in need of financing of any type? Business, Mortgage, Personal etc. Any interested Applicants should get back to US VIA
EMAIL: muthooth.finance@gmail.com
Call or add us on what's App +91-7428831341

Mariah Queens said...

I discovered my wife to be a silent killer, she acts up all loving and caring but a very silent killer and I found out with the help of WhitehatstechATgmailDOTcom this hacker made me to understand that my wife phone could be hacked and in less than 4 hours it was really hacked, I was able to read a lot that has been going on at my back right on my wife cell phone. This is like a dream come through, Thank you to the best hacker WhitehatstechATgmailDOTcom WHATSAPP; +18189256165

Unknown said...

INSTANT AFFORDABLE PERSONAL/BUSINESS/HOME/INVESTMENT LOAN OFFER WITHOUT COST/STRESS CONTACT US TODAY VIA Call/Text +1(415)630-7138 Whatsapp +19292227023 Email drbenjaminfinance@gmail.com

We are financial consultants providing reliable loans to individuals and funding for business, home and projects start up. Are you tired of seeking loans or are you in any financial mess. Do you have a low credit score, and you will find it difficult to get loans from banks and other financial institutions? then worry no more for we are the solution to your financial misfortune. we offer all types of loan ranging from $5,000.00 to $533,000,000.00USD with a low interest rate of 2% and loan duration of 1 to 35 years to pay back the loan secure and unsecured. Are you losing sleep at nights worrying how to get a Legit Loan Lender? Contact us via Call/Text +1(415)630-7138 Email drbenjaminfinance@gmail.com

Do you have a bad credit? Do you need money to pay bills? Do you need loan to buy, refinance or renovate your home? Is it necessary to start a new business? Do you have an unfinished project due to poor funding? Do you need money to invest in any specialty that will benefit you? DR.BENJAMIN FINANCIER LOANS aims is to provide excellent professional financial services which include the followings

* Personal loan * Business loan
* Home loan * Farm Loan
* Education loan * Debt consolidation loan
* Truck Loan * Car Loan
* Refinery Loan
* Equipment Loan
* Hotels Loan
* Refinancing Loan

Yours Faithfully
Dr Benjamin Scarlett Owen
Whatsapp +19292227023
Call/Text +1(415)630-7138
NOTE: GET YOUR INSTANT LOAN APPROVAL 100% GUARANTEED TODAY NO MATTER YOUR CREDIT SCORE. drbenjaminfinance@gmail.com

Richard Chadwick said...

Are you an individual businessman or a business organisation that wishes to expand in business ??, we offer financial instrument such as BGs, SBLCs,MTNs, LCs, CDs and others on lease and sales at a rate of 4%+2% of the face value and reasonable condition from a genuine provider. You are at liberty to engage our leased facilities into trade programs as well as in signatory project(s) such as Aviation, Agriculture, Petroleum, Telecommunication and any other project(s) etc.

Contact : Mr. Richard Chadwich
Contact Email: ribellodasilver01.finance@gmail.com
Whatsapp # : +380 50 591 6795


With our financial/bank instrument you can establish line of credit with your bank and/or secure loan for your projects in which our bank instrument will serve collateral in your bank to fund your project.

We deliver with time and precision as set forth in the agreement. Our terms and Conditions are reasonable and we work directly with issuing bank lease providers, this instrument can be monetized on your behalf for upto 100% funding. Intermediaries/Consultants/Brokers are welcome to bring their clients and are 100% protected. In complete confidence, we will work together for the benefits of all parties involved.

All relevant business information will be provided upon request.

BROKERS ARE WELCOME & 100% PROTECTED!!!

If Interested kindly contact me via

Email:~ ribellodasilver01.finance@gmail.com

serious enquiry only.

Tom Hulio said...

I have always thought it would be impossible to recover stolen cryptocurrency funds until I came across SpyWall recovery team, this cryptocurrency recovery team was able to successfully recover my stolen Bitcoin and Ethereum funds.
I was one of the many victims of a crypto scam and I lost my entire family savings trying to double it.
It was a very difficult time for me and my family, I was depressed and gave up hope of ever getting my money back. A few weeks ago, I came across a post while searching for clues on Google on how to recover my cryptocurrency, I saw a recommendation about SpyWall and how they were able to effectively recover cryptocurrency funds for many scam victims. I didn’t hesitate to contact them and provide them with all the information, SpyWall was able to recover my funds within two days. I’m truly grateful for their service and I promised them I would recommend them to others like me.
You can easily reach them via
E-Mail: SPYWALL@TECHIE . COM

SpyWall is no doubt the best when it comes to recovering cryptocurrency funds.

Tucholski Casimer said...

Dear Sir/Madam,

I am a direct Mandate to a genuinely renowned Investment Finance Company offering Cash & Asset Backed Financial Instruments on Lease and Sale at the best rates and with the most feasible procedures.

Instruments offered can be put in all forms of trade and can be monetized or discounted for direct funding. For Inquiry contact.

Kind revert to have our working terms for further proceedings.

Email: casimertucholski193@birdlover.com

Warm Regards
Tucholski Casimer