Uganda Revenue Authority (URA) informs the general public that it has embarked on plans to optimise revenue mobilization to drive Uganda’s economic growth and development through the Compliance Improvement Plan (CIP).
The CIP is a set of activities undertaken to address risks that arise from taxpayers’ behaviour that undermine revenue mobilization. It is characterized by a series of wide-ranging initiatives targeting different risks.
Real-time Audit
The CIP 2024/25 has introduced a new initiative known as Real-time Audit. Under this initiative, URA will examine taxpayers’ transactions in real-time, and where irregularities are detected, prompt alerts are given to taxpayers on how to address the issues.
As a result, taxpayers will receive regular notices known as Real-Time Tax Advisory (RTA) based on URA’s review of the taxpayers’ transactions. The advisories will highlight potential tax implications and offer guidance on how to address the issues identified. By taking proactive steps to address the issues, taxpayers can minimize their tax liability and ensure timely compliance with their tax obligations.
The advisory aims to assist taxpayers in reducing their exposure to additional tax, interest, and penalties by encouraging timely and accurate tax declarations and payments. Furthermore, the initiative seeks to facilitate taxpayers’ access to URA services such as Tax Clearance Certificates (TCC), Authorized Economic Operator (AEO) status, and tax exemptions.
Compliance Risks
Evidence suggests that improper tax behaviour is adversely affecting revenue mobilisation. The CIP 2024/2025 has identified behaviours that are obstacles to revenue mobilisation. Below are some of the risks that URA will pay special attention to:
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1 |
Taxpayers with suspicious and unexplainable loans in the balance sheet. |
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2 |
Taxpayers eligible for VAT registration but are not registered for VAT. |
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3 |
Local Governments that are not declaring all their employees in the PAYE returns. |
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Taxpayers with variances between sales declared in the Local Excise Duty (LED) return and that declared in the VAT return. |
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Taxpayers with variances in sales declared in the VAT returns and sales declared in the Income Tax returns. |
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6 |
Partners who are not registered for Business Income/Income Tax. |
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Taxpayers with inaccurate/incomplete taxpayer registration details. |
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Taxpayers who did not declare VAT on Imported Services. |
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Employers with employees declared as consultants in Withholding Tax (WHT) returns instead of declaring them in the PAYE returns. |
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Taxpayers with trade receivables for the year exceeding sales declared in Income Tax returns. |
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Taxpayers who declared no income and yet transacted with third parties during the year of income. |
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Taxpayers with overstated trade payables. |
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Withholding Agents not withholding tax on payments for local purchases or withholding and not remitting tax. |
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Taxpayers in a gross loss position. |
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Taxpayers identified as persistent off-setters. |
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Taxpayers who are non-compliant with EFRIS e.g. non-issuance or selective issuance of e-invoices, misclassification, or fictitious invoicing. |
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Taxpayers who are non-compliant with Digital Tax Stamps (DTS) e.g. failure to stamp gazetted products or mismatch in Stock Keeping Unit (SKU) details, variance between DTS activated production quantities and quantities declared in Local Excise Duty (LED) return, and forgery of stamps. |
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Taxpayers with unutilized credits on tax-type ledgers. |
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Taxpayers with huge volumes of imports without a corresponding sales declaration under Domestic Tax. |
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20 |
Taxpayers with overstated non-fiscalized expenses in the income tax returns. |
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Taxpayers are encouraged to review their internal controls in the above areas as they transact during the year to ensure completeness and accuracy of their declarations. Additionally, taxpayers selected for audit are encouraged to cooperate fully with URA to ensure a smooth and efficient process.
By working together, we can strengthen tax compliance and contribute to the sustainable development of Uganda.
First date of publication: Wednesday September 11, 2024
“Developing Uganda Together”
URA MANAGEMENT
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