URA can expand the tax base by nurturing taxpayers

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By Magezi Kiriinjju

For the first time in a decade, Uganda Revenue Authority (URA) reported having exceeded its annual revenue collection target after scooping sh31.3 trillion in the 2024/25 financial year, representing a 100.84% performance rate. The sh100 billion surplus collection performance is attributed to improved administrative measures and efficiency gains, but not necessarily the levying of new taxes. 

For the organisation and staff, this is a milestone to be celebrated, and even promotions for some members are well-deserved. As we all know, collecting taxes is not an easy task because most taxpayers, including myself, would not pay voluntarily. I am ready to attend a presidential appreciation dinner in case he chooses to invite URA for a job well done.

But, behind these glowing statistics lies a landslide of tears roaring from the hill carrying along broken lives, bankruptcies and lost jobs towards the valley of hopelessness, poverty and death in some cases.

This is due in part to URA’s uncompromising stance during the execution of its duties. Many business owners will tell you that no number of explanations, pleadings and appeals can save you if URA pins you down over their taxes. Considering that we don’t enjoy paying taxes anyway, URA will easily explain their no-nonsense approach to tax evaders.

However, there are several instances in which URA is accused of not exercising reasonable fairness during taxation, yet it is necessary to save both the business and the taxpayer.

I was told of a story of an entrepreneur whose startup was shut down because he was driving an expensive vehicle while his factory wasn’t remitting taxes. Forget the possibility that the factory, being new, may have been still below the break-even threshold.

Small-time dealers claim that URA can levy taxes on their business by simply taking a physical look at the stock without going through the books to ascertain how the business is performing. This leads to over taxation that exerts a financial strain on the already ailing sales.

Of course, I am not exonerating Ugandans, as human beings, we share a penchant for not paying taxes until given a hard nudge. Even the late reggae legend Lucky Dube sang about his frustration of paying taxes, saying in his lyrics, “I pay my gardener to clean up my garden, I pay my doctor to check out the other ting, I pay my lawyer to fight for my rights, and I pay my bodyguard to guard my body. There's only one man I pay, but I don't know what I'm paying for, I'm talking about the taxman.”

However, URA has a great opportunity to collect more money from Ugandans by helping them succeed in business instead of playing hide and seek with them. Being a tax collection body, they employ all sorts of professionals, from lawyers, administrators, enforcers, but most importantly, accountants and auditors. URA can leverage the last two categories to nurture budding taxpayers by helping them succeed instead of running them down during tax collection exercises.

For example, if a manufacturing business is not remitting taxes, rather than closing it and killing it eventually, deploy an accountant to help them run their books efficiently over a period of, say, six months, not only to recover tax arrears but also to stabilise and streamline their financial operations. Two birds are murdered with one stone, tax arrears recovered, and the company is saved from collapsing.

URA can replicate this model with small dealers as well. Accountants and auditors can spend more time in the field mentoring entrepreneurs by going through their books and highlighting where they can do better to thrive. Of course, where businesses flourish, tax revenues follow; it’s a win-win situation.

They can emulate President Museveni’s “Bail-Outs” model because it saves jobs, prevents bankruptcies, avoids scarcity and keeps consumer spending stable and growing.

Thriving enterprises promote innovation through research and development, as DEI Pharmaceuticals has demonstrated. They recently secured multiple U.S. patents, a targeted cancer treatment in February 2025 and a universal mRNA‑based vaccine composition for HIV and HPV. Now, imagine if we had let the company go under?

The entity has both the capacity and opportunity to nurture start-ups so they become future mega taxpayers. They need to become proactive in their taxpayers’ businesses to understand them better and encourage them to always pay their dues without any need for a nudge on the shoulder.

This approach lines up perfectly with the Uganda Revenue Authority's motto: “Developing Uganda Together". Their core values are ‘Respect, Integrity, Teamwork, and Excellence’. It also enhances their emphasis on Professionalism and Patriotism.

The writer is a communications officer with the Government Citizen Interaction Centre.