KAMPALA, Uganda | Real Muloodi News | The Uganda Revenue Authority (URA) recruited an additional 15 full-time staff to the Authority’s Rental Investigations Unit in July, whose sole focus will be investigating cases of landlords not declaring rental income, identified by the URA’s new Rental Tax Compliance System (rTCS).
The move comes as the tax authority ramps up its efforts to investigate landlords who are either not declaring or under declaring rental income, by leveraging intelligence shared between different government agencies.
The rTCS platform ingests the strategic government data sets, then organises the data into a coherent visual display that can be readily interpreted and understood by the tax investigators, including link graphs showing the relationships between people and properties, and a geospatial display of a landlord’s rental properties on a map.
“Because of the way the human brain processes information, visualising large amounts of complex data is faster and easier than combing through spreadsheets or reports. Data visualisation enables the tax investigators to easily analyse the data and uncover information that leads to actionable insights,” says Hussein Sekinalya, Director of Client Relations at RippleNami Uganda, the service provider assisting with the implementation of URA’s new intelligence tool.
“Data becomes intelligent when it is presented in a way that it can be acted on without the inherent confusion of data overload,” adds Sekinalya.
Eight Ministries, Departments, and Agencies (MDAs) contributed data for the collaboration to identify landlords not declaring income, including Ministry of Lands, Housing and Urban Development (MLHUD), National Identification and Registration Authority (NIRA), Kampala Capital City Authority (KCCA), Ministry of Local Governments (LG), National Water and Sewage Corporation (NWSC), Uganda Communications Commission (UCC), and URA.
The deployment of the software follows directives by the minister of Finance to URA to expand the tax base to ease the burden on the few compliant taxpayers.
According to URA, the rTCS application has so far identified just over 70,000 unregistered landlords (those without TINs) and their associated properties, and a further 80,000 landlords who are not submitting tax returns, those not declaring or under-declaring their rental income. This is compared to the roughly 4,000 who the system has identified as compliant.
Paddy Ocheng, Acting Assistant Commissioner Service management at the URA confirms a group of the most high performing staff from the Rental Unit have been nominated to work with the new recruits and to constitute a Core Team with the skillset to look into advanced cases using the Rental Tax Compliance System.
“From July, the Core Team’s focus shall be on high value cases of landlords not declaring income generated out of the system, as these have a greater potential for revenue yield,” says Mr Ocheng.
At the same time as URA ramps up investigations into landlords who are not being honest about their rental income earnings, they have also increased the penalty for taxpayers who provide false or misleading information to the URA about his or her business from USh4m to USh110m.
The penalty is part of the larger pool of penalties that came into force on July 1st, 2022, as a way of improving compliance.
The Commissioner General of URA, John R. Musinguzi, says it’s only a matter of time until URA catches up with landlords who are under-declaring rental income, and urges landlords to voluntarily disclose their income to avoid the fines and penalties that they will be subject to.
“The practice at Uganda Revenue Authority is to audit 3 years or less, however in cases where there has been tax fraud, we are forced to investigate backwards from there,” says Mr Musinguzi.
“On part of the taxpayer, if you know there are some tax issues that have not gone right, utilise the voluntary disclosure window – come on your own before any prompting from URA, and declare any tax matter that has not been going right in your organisation,” he adds.
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