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Uganda’s tax body to use machines to monitor tax compliance         

KAMPALA, (Xinhua) -- Uganda Revenue Authority (URA) is to introduce the Electronic Fiscal Device (EFD), a new tax monitoring system, to record business transactions and share the information with the tax man.

Cyprian Chillanyang, assistant commissioner for business policy URA, told Xinhua on Monday that the EFD is also expected to assist tax payers in proper bookkeeping and sales management.

Chillanyang said there is an ongoing procurement process of the machines and once complete, they will be progressively rolled out.

He said the machines will be mandatorily supplied to all businesses in the country.

“This is expected to greatly increase tax compliance because currently we run behind all other East Africa countries in the tax-to-GDP ratio,” he said.

URA statistics indicate Uganda’s tax-to-GDP ratio stands at 14 percent trailing other East African Community member states such as Kenya at 24 percent and Tanzania at 18 percent.

Chillanyang said once the EFD is rolled out, all taxpayers registered for Value Added Tax (VAT) will be obliged by law to issue tax receipts using the electronic fiscal machines certified by URA.

“Transaction data from the machines will be automatically relayed to the URA data base in real time, where it will be assessed by our team,” he said.

Vincent Seruma, assistant commissioner public and corporate affairs URA, said the machines will help increase tax literacy.

“Over time, we have realised that there are many businesses which are struggling to survive, because they lack comprehension of the basic aspects of tax and financial literacy. We therefore decided to launch a new approach,” Seruma said.

“The advantage in it is that it also enhances the relation between URA and the tax payers and does not waste time. It also gives URA the time to address the unique needs of each tax payer and make corrections on site if there are any,” he said.

In addition to the machines, Seruma said URA will also intensify its Tax Katale Campaign, where tax officials interact with the business people from their premises to give financial literacy education and solve tax challenges.

He said all these moves are primarily meant to bring on board the informal sector whose contribution to tax is very low yet their contribution to GDP is high.

In this financial year 2018/19, URA targets to collect over 16.3 trillion shillings (4.4 billion U.S. dollars) to finance government expenditure. Last year the tax body failed to hit its target by 400 billion shillings. 


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