The commissioner in charge of internal audit at the Uganda Revenue Authority (URA), Herbert Rusoke, has said they are not performing well in the collection of rental tax in commercially managed properties.

During a stakeholders’ engagement on compliance to paying taxes at the Nile Resort Hotel in Jinja city on Friday, November 26, Rusoke agreed with the area city commercial officer, Rogers Kubwooyo, who blamed the tax body for concentrating on the central business areas when collecting tax.

Kubwooyo said URA has in the past focused on the Jinja Central division, leaving Mpumudde/Kimaka and Walukuba/Masese divisions that are on the periphery of the city.

“We need to seriously identify where we have gone wrong by following the Tax Act to maximise all the avenues for raising revenue. Unfortunately, URA is only focusing on the central business areas yet other areas also boast of many rentals,” Kubwooyo said.

In an exclusive interview, Kubwooyo said when Jinja was still a municipality, it comprised 1,500 rental properties, but URA concentrated on Jinja Central division, which has 1,200, leaving out the 300 that were in Walukuba/Masese and Mpumudde/Kimaka divisions.

In response, Rusoke said: “I like the confession, these are weaknesses on our side and that is why we organised this engagement to exchange ideas that will help us perform better.”

Kubwooyo also regretted how local governments were struggling to raise the local service tax, especially from hotels, due to inaccurate data and untimely declaration of occupants to councils.

Whereas the city boasts many hotels, guest houses and lodges, Kubwooyo said most of them do not declare the number of guests accommodated, yet it is the visitors who pay this top up.

Under this arrangement, the entities are required to file their room occupancy with the Police on a daily basis as mandated, but this had not been fully tapped into.

However, he partly shifted the blame to the failure by the city council to motivate its staff into getting the right figures of hotel guests.

For instance, the council levies sh500 per guest who occupies rooms of between sh10,000-sh30,000, while those who sleep in those of sh30,000-sh50,000 pay an additional sh1,000 and those above sh50,000 pay sh2,000.

“Jinja is a tourism city and we host many people, but we do not even raise sh20m annually from hotel tax,” he said.

Peter Banya, the Jinja deputy Resident City Commissioner, said increment in tax collection is necessary to improve roads which are in bad shape.

The engagement was attended by local leaders and technocrats from Jinja city council and Jinja district.

Collecting more taxes

James Odongo, URA’s commissioner for information and technology, said President Yoweri Museveni wants the tax to Gross Domestic Product (GDP) to increase in order to stop donor dependence and loans.

He said Uganda, at 18%, performs badly in GDP to tax ratio.

He said government can only fund 45% of its budget, which is disheartening.

Odongo revealed that in the next five years, they would be collecting sh40 trillion, from the sh23 trillion this financial year.