UGANDA, Kampala | Real Muloodi News | Last week, USAID presented the Uganda Revenue Authority (URA) with 15 high-end desktop computers and 5 laptops to assist with the Rental Tax Unit’s investigations into non-compliant landlords.
The contribution, amounting to UGX 102 million or USD 27,500, was sponsored by USAID’s Domestic Revenue Mobilisation for Development (DRM4D) activity, which aims to increase voluntary compliance, strengthen the tax culture, and sustainably increase domestic revenue mobilisation, creating fiscal space for public spending and investments in service delivery.
The Rental Tax Unit will use these new high-powered computers in conjunction with URA’s sophisticated new intelligence tool, the Rental Tax Compliance System, (rTCS) as it steps up efforts to investigate landlords who are either not declaring or under-declaring rental income.
rTCS has been instrumental for analysing data on taxpayers in the rental income sector to widen the tax base and drive compliance. Following the implementation of the compliance system in April of 2022, URA achieved record-breaking rental income tax revenues in the first half of fiscal year 2022/2023, collecting UGX 97.17 billion, representing a surplus of UGX 17.06 billion.
These results were an improvement of 36.6% compared to the same period the previous year, marking the highest ever revenue earnings from rental income tax during this period in URA’s history.
According to Kieran Holmes, USAID-DRM4D’s Chief of Party, the expansion of the rental tax register is one of the most impactful interventions URA is currently employing to enhance revenue streams at the national level.
“Residential and commercial property rents are almost always calibrated in US dollars and are often paid into non-resident bank accounts. These income flows, accruing as they do to the elite, are rarely, if ever, taxed. The DRM4D project is therefore eager to support the Rental Tax Unit in analysing data on taxpayers in the rental income sector,” said Holmes.
“Moreover, the analysis of rental tax data and property owners’ tax returns is exposing hidden businesses that have evaded taxation until now and is a great means of helping to formalize the informal sector,” he added.
The DRM4D project also engages with the Government of Uganda in improving tax policy, working with local governments to stimulate local revenues, engaging with civil society and the private sector in advocating for a fair tax system and on opportunities to invest increased revenues into the poverty-reducing sectors, such as health, education, and agriculture.
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