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URA Announces Record-Breaking Rental Income Tax Revenues

The Commissioner General of URA - John R Musinguzi, explaining how the Rental Tax Compliance System works at the Half-Year Revenue Performance Press Brief for the FY 2022/23. Image source: URA

UGANDA, Kampala | Real Muloodi News The Uganda Revenue Authority (URA) has achieved record-breaking rental income tax revenues in the first half of fiscal year 2022/2023. The Authority collected UGX 97.17 billion, representing a surplus of UGX 17.06 billion, marking the highest ever revenue earnings from rental income tax during this period in URA’s history.

The results are an improvement of a 36.6% compared to the same period the previous year, where URA collected UGX 71.1 billion.

The Commissioner General of URA, John Rujoki Musinguzi, announced the historic results at the half-year revenue press conference held at URA headquarters in Nakawa, Kampala, covering the period July 1st, 2022 – December 31st, 2022.

Mr Musinguzi attributed the increase in rental income tax earnings to the deployment of URA’s sophisticated new intelligence tool, the Rental Tax Compliance System (rTCS), as well as intensified field inspections and close monitoring of the arrears rental portfolio.

URA deployed the Rental Tax Compliance System in April 2022 to step up its efforts in identifying non-compliant landlords through technology and data science.

The Authority worked in collaboration with eight other Ministries, Departments and Agencies to contribute data to the intelligence tool for big data analytics. As a result, Uganda is the first and only country in the world to implement a tax compliance software application that combines Central Government data with Local Government and other data to identify and quantify rental tax avoiders.

Two months after the deployment of the solution, URA formed a dedicated team to investigate cases of non-compliant landlords using rTCS.

The Commissioner General explained how the advanced technology works by using a combination of satellite imagery and third party data sources.

“This is a new technology that uses satellite imagery to identify all the buildings in a jurisdiction, say Kampala, and then we use third party data sources, like National Water data to tell us if a building is occupied, and like UMEME data to tell us if there is indeed daily consumption of power. Then we use Ministry of Lands data to tell us who owns that building,” he explained.

“The technology, using blockchain, integrates all this data and gives pointers to properties that are occupied and likely to generate rental tax but are not on URA’s rental tax registers,” he said.

He said that URA dispatches teams to verify the information, conducting interviews with local leaders, neighbours, and gathering other intelligence to confirm if a building is owner-occupied or rented and if it is rented, why it is not on URA’s rental register.

The Commissioner General confirmed that the technology is beginning to yield good results in the area of rental tax, but also emphasized that there is still a lot of potential revenue out there to be collected, so it will remain a priority area of focus for the tax authority.

Mr Musinguzi appealed to members of the public who earn rental income from property but are not declaring it to voluntarily come forward and declare their income. He warned that if URA finds out, they will go into audit, applying penalties and interest for non-payment over the time since the rental income tax should have been paid.

“You will save yourself a lot of trouble by coming fourth and telling us, “This is what I own and this is what earned,” and you start paying rental tax,” he said.

In his closing remarks, Mr Musinguzi confirmed that URA will continue to support key technology initiatives such as the Rental Tax Compliance System to improve revenue collection and close revenue leakages, and that the analysis and use of data internally generated and from third party sources will continue to guide their decision making.

WATCH: URA CG John Rujoki Musinguzi explains the Rental Tax Compliance System

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