some of the participants at the launch of VDP posing with URA Commissioner General in center.
In an effort to enhance tax revenue collection in Uganda, URA has launched a voluntary Disclosure Program (VDP) that will encourage Ugandans in Diaspora as well as non-residents working here voluntarily disclose their sources of income for purposes of taxation.
This follows an international bilateral agreement made by over 100 countries to have a global standard known as Automatic Exchange of Information (AEOI) between international tax authorities in an effort to reduce global tax evasion and increase tax transparency.
The global standard makes provision for the mutual exchange of information on financial accounts between states and territories that have agreed among themselves to the AEOI.
The Commissioner General of the national tax body Mr. John Musinguzi while addressing the Corporate Entities representatives at the launch at Serena Hotel Kampala said that the new policy program will help to improve compliance which is still very low in the country.
He said that between 2-3 Ushs trillions leave the country without being taxed and that with the international policy of Automatic Exchange of Information (AEOI) the country will be able to follow up incomes and assets generated by the citizens staying abroad as well as non-resident tax payers because member countries in the forum are obliged to comply.
“ The level of voluntary compliance has been very low and we have worked tried had to improve, we have revamped the tax ledgers for better serves even the tax payers can now access tax register and fill in information regarding their businesses.’’ Mr. Musinguzi said.
Musinguzi further said with the banks and other financial institution will start giving URA information in January 2024 but the Exchange of Information on Request (EOIR) that is already operational has started yielding positive for countries results and national tax authority has some collected over Ushs 256 billion while South Africa which is ahead of Uganda has so far collected US $ 312 million.
He also said that in June 2023 Parliament amended and passed the Financial Institutions Act 2023 which now compels such institutions to disclose financial information of individuals and companies to government and this will help URA to follow on the incomes of the potential tax payers in the country.
The deputy Secretary to the National Treasury Patrick Ochaira who represented the Minister of Finance and Economic Planning the AEOI by states which ratified to the policy will enhance the countries revenue collection which in turn will reduce on external borrowing which creates a huge physical burden on the economy.
“ The Automatic Exchange of Information international policy will improve services due to the reduced burden on the local tax payers, it will also reduce illicit financial flows and it will be a win -win situation in terms of its implementation.’’ Mr. Ochaira stated.
Parliament mid this year passed the Financial Act Amendment bill and after president appended his signature on it became operational in July 2023. Among other clauses in the Act, a resident person paying premiums to a non-resident person for the provision of re-tankful services is required to withhold tax at a rate of 10% on the gross amount of the payment.
By George Bukenya
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