UGANDA, Kampala | Real Muloodi News | Ibrahim Bbossa, the Assistant Commissioner of Public and Corporate Affairs at the Uganda Revenue Authority (URA), has issued a strong appeal to landlords to accurately and promptly declare their rental income, and fulfill their tax obligations by the end of the year.
Addressing attendees at the NBS Housing Baraza, Bbossa expressed concern over the disparity between the actual number of individuals earning rental income in Uganda and the relatively low number registered for rental income tax.
The total number of landlords on URA’s register by June 30, 2023 was over 161 thousand. This figure, while noteworthy, falls short of the true count of Ugandan landlords.
“By the end of the last financial year, the rental income tax register had 161,412 taxpayers. Although this is a significant number, it is far from the actual number of Ugandans earning rental income,” said Bbossa.
Bbossa warned that URA is catching up with non-compliant landlords, thanks to its intelligence technology, dubbed the Rental Tax Compliance System (rTCS).
rTCS is a platform that uses satellite imagery, geospatial data, MDA data, and artificial intelligence to locate and map the properties of landlords who have not declared their rental income.
According to Bbossa, the technology helps URA identify and reach out to non-compliant landlords and encourage them to register and pay their rental income tax. After the introduction of rTCS in April 2022, URA’s tax register grew by 25 per cent, and it continues to grow.
Bbossa emphasized the importance of registration for taxes within the housing sector, assuring proprietors that URA will support landlords that voluntarily come forward and pay their taxes before the end of the year by waiving penalties and interest.
The Voluntary Disclosure Program, Bbossa explained, is specifically designed to assist landlords who may have previously not declared or under-declared their rental income.
This program offers a pathway for taxpayers to rectify errors or omissions in their tax declarations without incurring penalties or interest, thus ensuring compliance and fairness in tax contributions.
Additionally, Bbossa announced that URA is extending this offer to landlords with outstanding tax liabilities. If these taxpayers settle the principal amount of their tax debt by December 31, 2023, URA would waive the associated penalties and interest, providing a significant incentive for timely tax payment.
Volunarity coming forward and paying your taxes can save landlords a lengthy and expensive tax audit, which can go back up to ten years where there has been an element of under declaration or omission.
Unfortunately for landlords who don’t declare rental income, hiding will be very difficult now that URA can geo-locate where you are with rTCS. It’s only a matter of time before the tax authority locates your property.
Implementation of the rTCS in Uganda began in October 2020. This process involved a comprehensive stage of data collection from eight participating Ministries, Departments, and Agencies (MDAs). After meticulous data cleansing, matching, and analysis, the system was fully operational by April 2022.
The most recent MDA to contribute data to the system is UMEME Limited, Uganda’s main electricity distribution company.
To implement the system, URA partnered with RippleNami Inc, a global technology firm that specialises and analysing and visualising large, complex datasets.
The urgency of Bbossa’s message is underscored by URA’s goal to collect over UGX 29 trillion in the current financial year. He noted that rental income tax is a critical area of focus, given its history of low performance and high levels of non-compliance.
Bbossa reiterated URA’s dedication to nurturing the growth and development of Uganda’s housing sector. He stressed the significance of fair, efficient, and effective taxation of rental income in achieving this goal.
Concluding his remarks, Bbossa appealed to all stakeholders in the housing sector to join URA and contribute their fair share to the nation’s development.
“I appeal to all of you to join us in this noble cause by complying with your tax obligations and paying your fair share of taxes,” Bbossa said.
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