August 20, 2021. Kampala- Private Sector Foundation Uganda (PSFU), engaged with Uganda Revenue Authority to discuss strategies, interventions and proposals how to widen the tax base.
The business community recognizes that taxes are a vital form of Government revenue to enable it provides services and amenities that stimulate growth of the economy. The private sector is the biggest source of this Tax revenue; however, high tax rates limit enterprise growth.
COVID 19 has negatively impacted the business community with reduction in domestic consumption (BTI study June 2021), 67% of the MSMEs reporting decline in incomes and more than 1.1 million employees are reported to have lost jobs. Government has also been hit by increased public pressures, tax revenue deficits and rising debt levels. As a result, illicit trade is recorded to be on a high of 62% and 25% for beer and cigarettes respectively. This worsens the motive of formalization of the economy, instilling more pressure to our Tax to GDP ratio.
PSFU has developed the following cross-cutting areas which we believe and have studied as key guiding principles which if we implored can be used to increase the tax base, while supporting companies to survive COVID 19.
"Going forward, URA will have many engagements like this where we listen more and talk less. Listening has paid off. 365billion was collected last year from engaging taxpayers in discussions and negotiations, without going to court." Said Mr. John Musinguzi, Commissioner General, Uganda Revenue Authority.