Tax efficiency is the target

TAX POLICY for the current year is focused on the objectives of stimulating the economy, strengthening tax administration, and raising revenue to meet rising expenditure needs and reduce the fiscal deficit.
Revenue collection was up in 2001-02–in terms of GDP from 10.7 percent to 11.3 percent. It still fell short of the approved budget estimate, but collection of income tax was better than expected and non-tax revenue collection by ministries was also up, following reforms.
“Strengthening tax administration is the main avenue open to us for mobilizing extra revenues,” says Gerald Ssendaula, Minister of Finance, Planning and Economic Development.
The Uganda Revenue Authority (URA), which is responsible for tax collection, is being reorganized and funds have been set aside to provide it with an integrated modern computer system. Firm action is also being taken to improve collection by stamping out corruption and inefficiency.

Annebritt Aslund, Commissioner-General of the URA, believes there is no reason why Uganda should not achieve tax collection equivalent to 18 percent of GDP–the average for sub-Saharan Africa. “The main problem is compliance in the community,” she says. “Widening the tax base is one of our major goals, not only for the money but because a good compliance system is the way forward. We are trying to educate the taxpayers, carrying out technical training of our staff and enhancing computerization.”
A small but important area of taxation in which the government is not seeking extra revenue is VAT on computers and accessories to promote development of information technology. Mr. Ssendaula removed it in his budget this year. “Information and communications technology have become so important world over for processing and accessing data,” he says. “It is important that Uganda is not left out.”