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Following the deployment of the Rental Tax Compliance System in April 2022, Uganda Revenue Authority (URA) has collected UGX 26.9 billion in rental income tax for the first quarter of Financial Year 2022/2023, a Q1 record for the tax authority. This represents a 20% growth in rental income tax revenues compared to the same time last year.
Presenting URA’s revenue performancefor Quarter One in Kampala on Thursday, 27 October 2022, URA Commissioner General John Rujoki Musinguzi announced that URA’s total net revenue collections in the first quarter of July to September were UGX 5.418.60 trillion against a target of UGX 5.132.17 trillion, resulting in an overall surplus of UGX 286.44 billion.
“This represents a 105.58% improved performance, and a revenue increase of UGX 957.80 billion (21.47%) compared to the same period in the previous financial year,” he said.
Mr Musinguzi announced domestic revenue net collections were UGX 3.178.77 trillion against a target of UGX 3.043.66 trillion, resulting in a surplus of UGX 135.10 billion.
“This represents a 104.44% performance and a revenue growth of UGX 581.58 billion (22.39%) compared to the same period in the previous financial year,” the URA Commissioner General explained.
According to Mr Musinguzi, the major surpluses in domestic tax heads were registered in Pay As You Earn (PAYE) at UGX 85.89 billion, casino tax at UGX 17.34 billion, corporate tax at UGX 14.99 billion, tax on bank interest at UGX 4.69 billion and rental income tax at UGX 1.46 billion.
“Increase in Domestic Taxes is down to the operational teams intensive focused field activities, stakeholder management and improved tax compliance support,” he said.
URA recruited an additional 15 full-time staff to the Authority’s Rental Investigations Unit in July this year, to solely focus on investigating cases of landlords not declaring rental income, identified by the URA’s new Rental Tax Compliance System (rTCS).
Armed with this new intelligence tool that identifies landlords in Uganda who don’t comply with their rental income tax obligations, URA identified and registered40,799 new landlords between July and September who are liable to pay rental income tax.
In total, Uganda Revenue Authority (URA) registered at least 147,892 new taxpayers this quarter, according to the URA Commissioner General.
The new registrations represents a 5.65% growth in the taxpayer register, which pushed the number of taxpayers to 2,765,900, of which, 174,020 are non-individuals while 2,591,880 are individuals.
Mr Musinguzi said the improved tax registered was in part due data analysis from third-parties, such as presented in rTCS.
rTCS, a big data platform, ingests various government data sets, then organises the data into a coherent visual display that can be readily interpreted and understood by URA’s tax investigators. The data is scored and sorted by likelihood of tax deficiency, with link graphs to show the relationships between people and properties, and a geospatial display of a landlord’s rental properties on a map.
Eight Ministries, Departments, and Agencies (MDAs) contributed data for the collaboration to identify landlords not declaring income, including Ministry of Lands, Housing and Urban Development (MLHUD), National Identification and Registration Authority (NIRA), Kampala Capital City Authority (KCCA), Ministry of Local Governments (LG), National Water and Sewage Corporation (NWSC), Uganda Communications Commission (UCC), and URA.
URA has previously indicated that a number of Ugandans do not contribute to the tax envelope, yet many of them have income generating activities.
Mr Musinguzi concluded that the annual target of UGX 25.55t is still an uphill task, but the taxman is confident that the goal is attainable with the help of every tax payer, and economic player.
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