As the heat from the 2016 presidential and parliamentary elections starts to cool off, the taxman has realised a sh194b deficit for the first nine months and is coming to collect from small business owners. It’s time to buckle up.
Import and export volumes declined from January to March 2016 wiping away gains that had been registered in the first six months of the 2015/16 financial year. The Uganda Revenue Authority (URA) must now collect sh3.3 trillion in the next three months.
In efforts to collect the largest amount of taxes in URA’s history, Dickson Kateshumbwa, the acting Uganda Revenue Authourity (URA) Commissioner General has urged Ugandans to insist on receipts for all purchases; he explained that small business owners will be required to present copies of receipts issued and received during tax assessment.
The tax register had about 780,000 businesses at the end of August 2015 according to the URA. The taxman is looking to expand the tax register in efforts to finance Uganda’s ambitions of joining the league of first world nations by 2040.
The taxman has silently been mapping out small businesses such as bars, garages, the fishing community, hardware stores and maize mills around the country that may not require a TIN but should pay taxes to URA since 2015.
“We have undercover officials that are estimating the average revenues of small businesses by area, and street. We will then formulate tax brackets for them. By mid- October, our officers will be moving to collect taxes from them,” Jolly Kaguhangire, the URA assistant commissioner for service management revealed last year.
Henry Saka, the URA commissioner for domestic taxes added: “Many Ugandans simply open up businesses without being aware of their obligations such as paying for licenses and taxes. Sometimes, informal business owners wrongly assume that they are not supposed to pay taxes to the URA after they pay local government taxes.”
She noted that the project is expected to deliver taxes from at least 80,000 small businesses by the end of the financial year 2015/16. Though the informal sector employs between 70% and 80% of the total working force, its contribution to taxes is dismal.