At a time when significant focus is drawn on the informal sector
and its meager contribution to the pooling of resources to sustain the
very economy it feeds onto, it is only mandatory that equity cuts across
the board. The resolve the government of Uganda is taking is to have
each individual pay their equal share and contribute to the development
of the country.
The Uganda Revenue Authority
(URA) has keenly followed up with this mandate to explore and tap into
the diverse sectors of the economy hitherto unknown and ultimately
closing in on the existing loopholes.
For
instance, the informal sector is known to be mutating in nature with
exact location of some businesses unknown yet government’s contribution
in form of provision of basic social services are indiscriminate.
This
ending first quarter of the financial year 2014/2015, URA has laid
strategies to close in on the rotating informal sector and among the
sectors up for compliance checks is the unknown larger sector of
transportation.
In Uganda, the transport
sector is among the most essential as other sectors heavily depend on it
either directly or indirectly. Its growth is evidently substantial as
it has grown by 4.5% in the financial year 2012/2013 up from 2.8% in the
financial year 2011/2012!
Government
contribution towards facilitating the sector was an enormous 18.9% of
the total budget allocation last financial year 2013/2014. However, the
sector’s contribution to the total revenue financing the budget remained
a paltry 2.2%! Its Income Tax performance has been considerably
declining.
Even then, many more owners of
commercial and passenger vehicles have continued to thrive in this
business without complying with the exiting tax law requirements.
Section 134 of the Income Tax Act for instance requires every owner of a
commercial vehicle to obtain a Tax Clearance Certificate. This proves
the compliance status of a client in filing returns and paying taxes.
Return filing is not just a ritual but also an obligation.
The
sector has major players such as the Tour and Travel operators, Bus and
Taxi owners, owners of driving schools, proprietors of landing sites,
commercial vehicle owners, Courier transport service providers,
operators of private crafts making internal and external flights, owners
of inland water transport vessels among others.
URA
acknowledges existing challenges such as the informal nature of
ownership, and is thus going to engage all stakeholders in the business
of transportation educate and remind them, as taxpayers, of their rights
and obligations and ensure they comply.
Given
its informality, in accordance with the law, we have come up with
estimates of how much revenue comes from the particular types or classes
of commercial vehicles to help in assessing those may not file returns
or those who file but are found to have grossly under declared. These
are in use by our staff at all URA offices. The Objection and appeals
window remains open for anyone who feels this assessment is unfair, as
long as they can file a return declaring realistic figures.
Our
existing collaborations with the Transport Licensing Board (TLB) which
issues Public Service Van (PSVs) licenses and Kampala Capital City
Authority (KCCA) for information sharing are paying off already as we
work together in sensitizing the different stakeholders to enable them
comply. More than 2,000 owners of commercial vehicles have received
communication to reminding them to comply and a number are responding.
Those who may not respond in time will get administrative assessments
that may be enforced on. Whoever has commercial vehicle, verify that it
is in your names, if not get it transferred to your names as early as
possible. Enforcement may catch up with you on a liability that belongs
to another person who is the legal owner of that vehicle in your hands.
Transport
is a key driver in the economy and we are out to ensure that the sector
is formalized and correspondingly contributes to the development of the
infrastructural network and other forms of development in the country.
Therefore
this is to appeal to all owners of commercial vehicles, to ensure that
the vehicles under their care are transferred to the current owners and
to comply with income tax requirements. Please remember that other than
Public Transport, other forms of transport are taxable for VAT purposes.
Hence those owning “magulu kumi” and other forms of commercial vehicles
that offer services in the construction sector among others with in the
country, should be registered for VAT as well. I wish you a very
prosperous 2015.
Reference:
https://www.ura.go.ug/readMore.do?contentId=999000000000290&type=TIMELINE
