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Uganda Revenue Authority’s just-launched Digitalisation and IT Strategy 2023/24-2027/28 is a “living and breathing” testament to the tax authority’s determination to leverage cutting-edge technology to achieve the organisation’s mission to “mobilize revenue for national development in a transparent and efficient manner,” that should be embraced and supported by all stakeholders, John R. Musinguzi, the Commissioner General has rallied all stakeholders.
The 5-year strategy is a master plan that seeks to improve efficiency, effectiveness, and service delivery to the taxpayer and in so doing, maximise revenue growth and increase customer service satisfaction. At the core of the strategy is the use of technology to enhance taxpayer experience, by among others, generating accurate taxpayer data and tax ledgers, thus creating clarity and certainty for taxpayers, traders and stakeholders of their obligations and therefore making it easy for taxpayers, traders and stakeholders to comply with their obligations. The strategy also seeks to leverage big data analytics to detect taxpayers who do not comply and make non-compliance hard and costly. The strategy also lays pathways for modernising the tax authority’s systems to provide digital and streamlined online services to shorten customer journeys as well as develop a high-performing, diverse, agile, engaged and evolved workforce. It also firms up the ground for URA’s continued investing in creating an always-on reliable, stable, secure and interoperable digital operating environment as well as between URA and its public and private sector stakeholders and enablers that makes it easy for taxpayers to meet their tax obligations, easily and on time.
In a preamble to the 5-year master plan that was launched by the Finance Minister, Hon. Matia Kasaija and other government, development partners and private sector stakeholders on October 13th 2023, Mr. Musinguzi made an impassioned plea to stakeholders to “embrace this strategy as a living, breathing entity⏤ one whose objectives guide us, inspire us, and propel us to reach new heights in achieving them”.
“Together, let us write the next chapter of URA’s history and create a legacy of excellence and innovation and a brighter future for all of us,” Musinguzi wrote, adding: “Our digitalisation and IT Strategy stands as a testament to our determination. It is a comprehensive roadmap that will leverage cutting-edge technology to achieve our mission and express our values. Through strategic alignment of IT resources and a unified digitalisation strategy, we will unleash the full potential of our organisation. With innovative tools and advanced expertise, we will streamline processes, optimise efficiency, and deliver exceptional experiences to our stakeholders,” he reiterated.
Musinguzi said the strategy had been developed in consultation, collaboration and benchmarking with renowned revenue administrations, and public and private stakeholders.
“The result is a customer-centric URA Digital Transformation, IT and innovation Strategy that serves as our compass towards success. By harnessing the power of technology and continuous innovation, we will redefine the future of URA and revolutionise tax administration programs,” Musinguzi adds.
A transformational revenue service for Uganda’s economic Independence
Speaking at the strategy launch function which also doubled as the launch for the Authority’s Tier III data centre, Finance Minister, Matia Kasaija, challenged the tax Authority to “secure a 20% Tax to GDP ratio within another two years” within the country’s Domestic Revenue Mobilisation Strategy (DRMS).
“There is no way a mature country such as Uganda should have to go through the humiliation of borrowing,” Kasaija said, adding: “We additionally urge you URA to facilitate the government’s job creation efforts for our youth.”
Uganda’s DRMS seeks to improve revenue collection and lift Uganda’s Tax-to-GDP ratio from 12.5% to between 16-18% by 2023/24.
Under Musinguzi’s leadership, URA has consistently registered a growth in revenue collections from the UGX16.75 trillion that he inherited in FY2019/20, to UGX19.2 trillion in FY2020/21 and UGX21.7 trillion in 2021/22 and a record UGX25.2 trillion in FY2022/23.
In this period, the tax register has more than doubled, growing by 119.6%, from 1,594,116 taxpayers in FY2019/20 to 3,500,294 taxpayers in FY2022/23.
“For the first time, our tax to GDP has reached 14%. It is a far-off journey from where we want to be, but we are sure that if we maintain this steady growth over the next 3-4 years, Uganda will get to the 18% and 20% tax to GDP,” Musinguzi assured stakeholders.
The revenue target for FY2023/24 is UGX 29.2 trillion. 18.98 billion.
The Commissioner General thanked taxpayers “who have paid their taxes, faithfully and sacrificially”.
“You have been part of this growth of double digits in revenue collection despite the challenges and we are mindful of the challenges such as COVID-19, and the international wars that have impacted us, and that is why the government, the Minister of Finance, in his wisdom guided that we shall not bring any new tax rates and tax measures. But let us focus on improving efficiency,” Musinguzi said, adding: “To those who have not been compliant, I would like to encourage you that this is the time to be. You can take advantage of provisions within the law to be compliant without paying penalties”.
He however warned that, “As we have seen today at the launch of our data centre, URA now has a lot of data, enough data to tell us who is doing what in the economy and what are they contributing. So, it is a question of time, we will catch up with the non-compliant. The trouble is, when we come on our invitation and we establish that you have not paid any tax, you will pay the principal tax but you’ll also pay the penalty and the interest. So why not take advantage of these waivers within the law to pay only the principal tax and start being compliant going forward?”
Speaking at the launch exercise, the Commissioner General also appreciated the government of Uganda, through the Ministry of Finance, and Parliament for facilitating URA’s much-needed investments into technology among others to the tune of UGX96 billion this financial year. He also thanked other partners such as UNDP, USAID and the governments of Northern Ireland, the UK, and the Netherlands, for supporting URA’s transformational efforts.
He also expressed his deep gratitude to URA staff and the board for their input and commitment to transforming URA into the model institution that it is today.
He pledged to maximise value from every investment that the taxpayer and the government commit to the Authority.
“I’d like to assure you that every penny you give us to spend on technology will be well spent,” he said.
He for example said the data centre had been at slightly below UGX20 billion, which is UGX19.7 billion below the budgeted UGX33 billion. He also said the URA had been able to save on technology investments by investing in owned infrastructure, digital assets and training own people
“Over the last three years, we’ve been able to reduce some of our major technology costs on the major platforms that we use, especially for data management, from about UGX47 billion to about slightly below UGX30 billion.