Enforcement is a Last Resort to recovery of tax – URA

Recently, Uganda Revenue Authority has been on the spot on an array of issues, including the implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and enforcement measures that taxpayers say are choking them.

The traders have complained about URA’s enforcement teams intercepting customers asking for fiscalized receipts and the closure of business premises in the name of collecting taxes.

Ibrahim Bbossa, URA’s Assistant Commissioner of Public and Corporate Affairs, explains that the tax body has resorted to intercepting customers due to the high levels of non-compliance with value-added tax.

“Using the receipts, we can check our systems and know if the trader is VAT registered or not. If they are registered and they are non-compliant, we come in and enforce,” he explains.

Bbossa adds that they are also able to find taxpayers who are not on the register but should be. He emphasizes that it is not aimed at harassing customers like it has been painted; it is an informal tool to ensure compliance in an informal economy.

On closure of business premises, Bbossa says this is a last resort that is employed after all forms of engagement have not yielded.

“Normal procedure indicates that taxpayers file their returns and consequently pay the tax. However, if a taxpayer does not file a return, we issue an assessment that a taxpayer is expected to comply with or object. URA only employs tax recovery measures when taxpayers do not respond to assessments. This is where you find processes like issuing demand notices, agency notices, and the closure of premises,” he states.

The URA spokesperson clarifies that before taxpayers premises are closed, several measures are employed to try and recover the tax in liability.

“We send reminders to the taxpayer, and if they do not respond, we follow up with a phone call or visit them to discuss a payment plan. It is after you have not responded to those reminders that we start thinking of enforcement.”

Bbossa continues, “It is after this line of engagement that we issue an agency notice. This is our first line of enforcement, and even before this, we send a final reminder to the taxpayer. For those that do not respond to final reminders, we move to full blast enforcement, which is locking premises, attaching property, etc., to recover the tax.”

The taxman encourages taxpayers to always utilize engagement avenues to avoid disruptions that come with enforcement.

“It is not the intention of URA to go around closing businesses because we need them to thrive for us to effect our mandate. However, it is also on us to ensure compliance and level the tax-paying field.”

Bbossa says the authority is aware that some of its staff misuse the enforcement laws, and as such, guidelines have been enacted to guide staff on that front. URA also has a staff compliance division that investigates staff that stray from the guidelines, and those that are found culpable are dealt with accordingly.

By Winiefred Akinyi

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