URA pushes health sector, local governments to improve tax compliance

The Uganda Revenue Authority (URA) has stepped up engagements with taxpayers and public institutions across the country, urging them to improve tax compliance as government seeks to raise Uganda’s tax-to-GDP ratio from the current 14 percent to 20 percent.

The tax body is targeting different sectors with sensitisation programmes aimed at helping taxpayers understand their rights and obligations, while addressing practical challenges that often contribute to non-compliance.

In Arua City, URA engaged taxpayers in the health sector, calling on medical practitioners and health-sector employers to ensure they file returns for Pay As You Earn (PAYE), Withholding Tax (WHT) and Income Tax.

The engagements are intended to improve voluntary compliance and ensure that businesses and individuals contribute their appropriate share towards financing public services.

Health sector urged to improve reporting

URA officials noted that some employees in the health sector already earn salaries from one employer while receiving additional income from secondary employment.

The authority urged secondary employers to apply the appropriate tax rate for secondary employment to ensure that the correct amount of PAYE is deducted and remitted.

URA said accurate reporting of income from different sources is essential in determining taxpayers’ correct liabilities and preventing tax arrears and penalties.

However, officials acknowledged that fear of taxation remains one of the reasons some businesses do not disclose complete information about their operations.

Taxpayers may withhold information about their businesses because they fear that declaring all their income will result in excessive taxation.

Muzamil Aluma, Supervisor Tax Education at URA, urged taxpayers in the medical services sector to overcome this concern by maintaining proper business records.

He said accurate records enable taxpayers and the tax authority to establish the correct taxable income and determine the appropriate amount of tax payable.

Proper record-keeping can also help businesses monitor their performance, manage expenses and make informed financial decisions.

Compliance key to raising domestic revenue

URA said improving tax compliance is critical to Uganda’s ambition of increasing domestic revenue mobilisation.

With the tax-to-GDP ratio currently estimated at about 14 percent, the authority is seeking to broaden the tax base and improve compliance across different sectors.

The targeted sensitisation approach is designed to help taxpayers understand the tax system while encouraging timely registration, declaration, filing and payment.

URA said it remains committed to strengthening tax administration through stakeholder engagements and extensive taxpayer education.

The approach is based on the principle that taxpayers who understand their obligations are more likely to comply voluntarily.

Local governments seek clarity on tax obligations

In a related engagement, URA officials met leaders and officials from Mpigi Town Council and Mpigi District Local Government to discuss practical taxation challenges affecting local government operations.

The discussions covered a range of issues, including the 40 percent PAYE deduction for councillors, Tax Identification Number (TIN) registration and trader compliance, VAT accounting and fund tracking, the six percent withholding tax on fuel and integration of URA systems with IRAS.

The engagement provided local government officials with an opportunity to seek clarification on tax procedures and raise challenges encountered in their day-to-day operations.

Fredrick Mugela, an officer in URA’s Public Sector Office, encouraged public officials to keep their TIN information updated, file returns and make tax payments within the prescribed deadlines.

He said timely compliance helps taxpayers avoid penalties while contributing to a more efficient tax administration system.

The engagement also underscored the importance of collaboration between URA and local governments in improving taxpayer registration and compliance among businesses operating within municipalities and districts.

Kira staff trained on tax registration

A day earlier, URA Public Sector Office official Boaz Nuwagaba engaged staff of Kira Municipal Council on the basics of tax registration and compliance.

The session equipped municipal staff with knowledge on how to understand and fulfil their tax obligations, with participants actively engaging in discussions and seeking clarification on various taxation matters.

URA officials took the staff through key stages of the tax compliance process, including registration, timely filing, accurate declaration and payment of taxes.

The engagement also included a practical session on Deemed VAT, providing staff with guidance on how to account for the tax in their daily operations.

The training was intended to improve the capacity of municipal officials to understand taxation requirements and apply them correctly in their work.

Tax compliance linked to self-reliance

The Town Clerk of Kira Municipal Council emphasised the importance of tax compliance in Uganda’s drive towards greater economic self-reliance.

He said domestic revenue generated through taxation is critical to financing government development priorities and reducing dependence on external assistance.

The remarks come as government continues to prioritise domestic resource mobilisation as a key pillar of economic development.

For URA, improving compliance is therefore not simply about collecting more taxes. It is also about creating a tax system in which businesses, employees and public institutions understand their responsibilities and can meet them without unnecessary uncertainty.

The authority’s engagements in Arua, Mpigi and Kira demonstrate a growing focus on taxpayer education as a tool for improving voluntary compliance.

By encouraging accurate declarations, proper record-keeping, timely filing and payment, URA hopes to expand the tax base while reducing disputes, penalties and compliance gaps.

As Uganda seeks to raise its tax-to-GDP ratio to 20 percent, the success of the strategy will increasingly depend on bringing more economic activity into the formal tax system and ensuring existing taxpayers comply with their obligations.

The message from the recent engagements is clear: better taxpayer understanding, accurate business records and timely compliance are becoming central to Uganda’s domestic revenue mobilisation agenda.