Greetings,

What an immense pleasure it is to stand before the most influential members of the Ugandan economy to recognize the most compliant taxpayers for the financial year 2023-24 and also share about what we need to have in place as a country to ensure economic stability, organic growth and a stronger fiscal social contract.

I am particularly grateful to URA for organising these awards consistently. It is a beautiful gesture that you need to uphold. To the Taxpayer, to be invited to this gathering and walk away with a gong is the ultimate endorsement of a business for good practice, public trust, transparency and patriotism.

I must emphasize that tax compliance is not about the one who contributes the biggest volumes of money in tax but rather the one who demonstrates consistently the tenets of tax compliance and these include registering for the right tax heads, filing tax returns in time and paying that which you have filed promptly. To this, you can add astute bookkeeping. It is this spirit that is behind URA’s quest to consolidate a culture of tax compliance among its citizens. At the moment, about 90% of the taxpayers on the register make their tax contributions of their own accord. It is only about 10% that URA has to apply enforcement measures to foster compliance. This is called organic compliance and it is the culture of winning economies and one that we seek to ensure for all Ugandans in trade.

I know of countries where non-compliance is heavily vilified and scoffed upon. Countries where one is singled out as a non-compliant taxpayer is enough to discredit you out of office in any practice regardless of whether you are a cabinet minister, a professional in the field of medicine, an actor or a sports personality. In such countries, non-compliance is recognized for what it is – stealing from everybody else including yourself.

The essence of taxation is to create a scenario where every qualifying citizen contributes to the national cake. It is this national cake that is then shared equitably to support all citizens of the country. It certainly becomes unfair when a qualifying citizen dishonours the opportunity to contribute to the cake but then turns around and expects services to be extended to him/her or his people. Non-compliance indeed goes against the spirit of Ubuntu.

Having discussed the essence of tax compliance in the earlier submissions, I will put some focus on the keys to a robust fiscal policy. In the most simplistic terms, Fiscal Policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty and Uganda is no exception. For times such as these, nations have put specific elements into consideration when putting together fiscal policies that are robust and these elements are; –

• Growth friendliness. Once well used, fiscal policy measures can bolster the three turbines of long-term economic growth namely Capital, labour and productivity. This is why the Government of Uganda has put a core emphasis on putting money in the hands of the willing workers (PDM) equipping them with much-needed capital to ensure job creation. Uganda must keep following the path of strengthening the growth-friendliness of its fiscal policy.
• Uganda should embrace a countercyclical fiscal policy. A robust fiscal policy can be used to make the business cycle smooth and tenable. We have seen it when the Government made moves during the pandemic and post-pandemic to put tax policies in place to enable businesspeople who were adversely affected to get back on the right path of business trajectory. In bad times, taxes are lowered and spending is increased to put more money in the pockets of companies and consumers. Fiscal policy is taking on an equally significant role in economic stabilization today than in the past. Even the tax waiver Section 47 A of the Tax Procedures Code Act, is in this very spirit and I encourage every business that has accumulated high interest and penalties in tax as of June 2023 to clear its principal tax before 31st December 2024. In turn, the Government will wipe away the fines and penalties that had accumulated.
• What is the value of anything good if it is just for a few people and not for everybody? It helps no tycoon to be the only tycoon in his village because when the times get difficult for everybody around him, he will not become just the easy target but rather the only target. Taxes and public spending are powerful means to ensure that countries share the growth dividend among the population – equitably.
• A strong tax capacity is a must. What can the government do with a weak tax base? Not much I reckon. Fortunately, we have seen the Uganda Revenue Authority with support from agencies like KCCA, URSB and the Ministry of Local Government through the Taxpayer Register Expansion Program (TREP) make huge leaps in expanding the tax base over the last three years through register growth. However, statistics show that this base could be widened, and more taxpayers join the register. This will call for joint efforts from the tax body and the tax policymakers. We need to get to a time when all the businesses that are meaningfully making money in Uganda are taxable and traceable. This speaks to legal infrastructure alignments and technological provisions being in place. With the right technology and the right tax laws in place, we shall improve the contribution of especially the informal sector which at the moment is not where it should be.
• One of the things I have emphasized since I assumed this role has been the optimal utilization of the funds that we collect. As long as there is wastage, we cannot achieve the aspirations we desire at the speed we desire and ultimately this dumps the spirit of the taxpayers. Wastage can also mean delayed utilization of funds and in some cases, non-utilisation of funds. You still find some Ministries Departments and Agencies returning budgets unused at the end of a financial year for a budget that they requested to execute specific projects. It is a level of complacency that we cannot tolerate. I salute all the Ministries Departments and Agencies that execute their projects in time and account in time. It is the spirit we desire. Such Ministries deserve budget increments. I have been said to be hard when it comes to accounting for expenditures but that is a cross I am willing to bear. Taxpayers pay their taxes through the nose and it is only fair that public expenditure is not handled with kid gloves. We shall continue to tighten the noose on public funds to mitigate wastage and expenditure delays. Prudence is also the main reason behind the Government’s Rationalization Program.  

Congratulations to all the winners

For God and My Country 

RAMATHAN GGOOBI