URA rolls out plans to pardon tax defaulters

In an attempt to expand the tax net, Uganda Revenue Authority (URA) plans to pardon some taxpayers and individuals from the payment of tax, interest, and penalties.

According to the taxman, the move is aimed at encouraging compliance by giving "certain individuals pardons" in a bid to create more dialogue with the tax authority.

All individuals who seek to benefit from the proposed tax pardons will have to voluntarily disclose information about their business to URA and the estimated tax liability due.

To stand a chance of having a fresh start, the individual or businesses should not have been prompted by any action or threat of action by enforcement personnel from the tax authority, URA says.

"Voluntary disclosure applies to all taxpayers and all tax heads. However, it will not be accepted by URA if the declaration is in the URA records or if the declaration is under investigation," Jamil Senyonjo, URA manager taxpayer literacy, said.

"The disclosure should not be limited to select errors or omissions or to specific taxation years or reporting periods. The disclosure must be of full and accurate facts and documentation for all taxation years or reporting periods where there was previously inaccurate, incomplete, or unreported information relating to any and all tax heads with which the taxpayer is associated," he added.

This means that once you enter into a voluntary disclosure agreement with the Commissioner-General, you will not be required to pay any outstanding unpaid tax, interest penalties.

URA closed the 2019/20 revenue collection calendar with a deficit of about sh3 trillion as the COVID-19 pandemic disrupted several businesses. Revenue mobilization is largely dependent on the well-being of business and the economy.

Speaking during a post-budget speech recently, John Musinguzi, URA Commissioner General said the taxman will focus more on tax education to boost domestic revenues going forward.

"We shall engage them on their rights and obligations and equip them with the tools to improve their tax compliance as well as benefit from incentives in the law. When businesses thrive, the economy thrives and can positively impact on gov't's ability to fund the national budget," he said.

"We will deepen interaction with the taxpayers. It is in our interest that businesses grow and accumulate wealth from which URA will tax. It is not a conflict that one must die for the other to thrive. We are considerate of the times," he added.