UGANDA, Kampala | Real Muloodi News | The commissioner in charge of internal audit at the Uganda Revenue Authority (URA), Herbert Rusoke, has said they are not performing well in collecting rental tax revenue in commercially managed properties.
During a stakeholders’ engagement on compliance to paying taxes at the Nile Resort Hotel in Jinja City on Friday, Rusoke agreed with the area city commercial officer, Rogers Kubwooyo, who blamed the tax body for concentrating on the central business areas when collecting tax.
Kubwooyo said URA has focused on Jinja Central Division, leaving Mpumudde/Kimaka and Walukuba/Masese divisions on the periphery of the city.
“We need to seriously identify where we have gone wrong by following the Tax Act to maximise all the avenues for raising revenue. Unfortunately, URA is only focusing on the central business areas yet other areas also boast of many rentals,” Kubwooyo said.
In an exclusive interview, Kubwooyo said when Jinja was still a municipality, it comprised 1,500 rental properties. Still, URA concentrated on the Jinja Central Division, which has 1,200 leaving out the 300 in Walukuba/Masese and Mpumudde/Kimaka Divisions.
In response, Rusoke said: “I like the confession, these are weaknesses on our side and that is why we organised this engagement to exchange ideas that will help us perform better.”
Kubwooyo also regretted how local governments struggled to raise the local service tax, especially from hotels, due to inaccurate data and untimely declaration of occupants to councils.
Whereas the city boasts many hotels, guest houses, and lodges, Kubwooyo said most do not declare the number of guests accommodated, yet the visitors pay this top-up.
Under this arrangement, the entities must file their room occupancy with the police daily as mandated, but this has not been fully utilised.
However, he partly shifted the blame to the failure by the city council to motivate its staff into getting the correct figures of hotel guests.
For instance, the council levies USh 500 shillings per guest who occupy rooms between 10,000 shillings and 30,000 shillings. Those who sleep in the ones of 30,000 shillings to 50,000 shillings pay an additional 1,000 shillings. Those above 50,000 shillings pay 2,000 shillings.
“Jinja is a tourism city and we host many people but we don’t even raise 20 million shillings annually from hotel tax,” he said.
Peter Banya, the Jinja deputy Resident City Commissioner, said an increment in the tax collection is necessary to improve roads in bad shape.
Local leaders and technocrats from Jinja City Council and Jinja district attended the engagement.
James Odongo, URA’s acting commissioner for information and technology, said president Yoweri Kaguta Museveni wants the Gross Domestic Product (GDP) tax to increase to stop donor dependence and loans. He said Uganda, at 18%, performs poorly in the GDP to tax ratio. He further said the government could only fund 45% of its budget, which is disheartening.
Odongo revealed that in the next five years, they would be collecting 40 trillion shillings from the 23 trillion shillings this financial year.
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