URA to tap into the informal sector with new campaign

By Silvia Nyambura

Uganda Revenue Authority (URA) has unveiled a 3 month campaign aimed at enforcing tax compliance in the informal sector. The initiative intends to change the general tax payer behavior in regard to issuance and demand for receipts irrespective of the amount spent in any given transaction. Dubbed the ‘Receipt Issuance Campaign’ that began in April 2016, the initiative will run through to July with a focus on General Trade, Wholesale and Retail as well as Rental and Manufacturing in most urban areas.

According to URA Assistant Commissioner in charge of Project Management in the Domestic Taxes Department William Kiganda, this move is in line with the amendment of the Income Tax Act introduced in FY 2015/2016.

Addressing a Press Conference earlier today, Kiganda said, “This amendment meant no tax deductions shall be allowed for any expenditure above Ushs 5 million in one transaction on goods and services from a supplier who does not have a Taxpayer Identification Number (TIN).”

The changes were effected to ensure businesses issue the right receipts and invoices with all details of the company including names and address. This will allow them to pay the rightful taxes.

“The informal sector accounts for between 48% and 52% of Uganda’s business community. Lack of proper records in these establishments makes it difficult to streamline processes such as tax collection and so on. It is therefore imperative that we get them to understand the importance of having the right documents to ease their tax experience,” he added.

The initiative is expected to raise between Ushs 20 and Ushs 30 billion in revenues in the short term with potential to multiply to trillions in the long term.