The Uganda Revenue Authority (URA) is a government revenue collection agency established by the Parliament of Uganda. Taxes in Uganda are centrally assessed and collected by the URA, headed by the Commissioner General.
Uganda Revenue Authority House (URA Tower) in Kampala
Historical Context and Establishment
Toward the end of the 1980s, the minister of finance sought ways to strengthen revenue collection due to frustration with the ministry's revenue performance. In 1990-91 and 1991-92, Uganda's fiscal revenues averaged only 7.5 percent of gross domestic product (GDP), ranking among the lowest in the developing world. Corruption was rampant, particularly in revenue collection, following the turbulent years of Presidents Idi Amin and Milton Obote.
Inspired by Margaret Thatcher's reform of the United Kingdom's public sector and influenced by Ghana's establishment of an autonomous revenue agency, Uganda pursued a similar approach. The United Nations Development Programme supported this initiative by funding a team from Uganda's Ministry of Finance (MOF) to visit Ghana and commissioning a study to define the steps needed to create an independent revenue authority. The United Kingdom's Department for International Development (DFID) also supported the URA's creation with a UK£4.6 million grant.
Following internal discussions and parliamentary approval, the URA was created in September 1991. The main difference between the URA and its predecessor was that the URA would pay better wages and have greater flexibility in managing its human resources, including the ability to terminate corrupt staff members.
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Key Elements Leading to the Creation of the URA
- Comprehensive economic reform program including liberalizing external trade and modernizing customs administration.
- Low trade tariffs in Sub-Saharan Africa.
- Creation of an independent revenue agency, the Uganda Revenue Authority (URA).
Early Reforms and Challenges
Initially, the URA was empowered to advise the government on tax policy issues. However, the Cunningham Report (DFID 1995) identified institutional issues that prevented the URA from improving its operational performance. In response, the government appointed a new board and a commissioner general, made changes in the senior management team, and clarified the roles of the board and the relationship between the MOF and the URA.
The changes granted the MOF greater authority in tax policy, while giving the URA greater flexibility in tax administration and a somewhat larger budget. Additionally, the government created the Tax Tribunal to provide taxpayers with recourse against disputable tax assessments and abuse by revenue officers. Despite these changes and support from the DFID, the expected results were not achieved.
Administration and Structure
The URA's Board of Directors consists of a chairperson, representatives of the MOF and the Ministry of Trade and Industry, a representative of the Uganda Manufacturers Association, and the URA's commissioner general (since 1998). The minister of finance can appoint two additional members and impart directives to the board. The URA currently has a commissioner general, two deputy commissioners general, and several revenue departments, including:
- Customs Department
- Domestic Indirect Taxes Department
- Domestic Direct Taxes Department
- Expansion and Collection Department
These departments are supported by Legal Affairs, Information Technology, Human Resources, Finance, Administration, Internal Audit and Investigation, and a Staff Monitoring Unit.
Budget, Salary, and Staffing Issues
During the URA's creation, discussions took place regarding the formula for setting its operational revenues. While the URA's budget is set during the regular budget process, in recent years, it has amounted to 3.0 to 3.5 percent of revenue collected. Staff salaries were initially set at levels comparable to the highest salaries in the country, but they have since been eroded by inflation and a lack of systematic adjustments.
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In 1991, all MOF Revenue Department staff members had to apply for their jobs at the newly created URA. About 70 percent were accepted, and the remaining 30 percent were redeployed in other MOF departments.
Leadership and Key Figures
Several individuals have played crucial roles in the URA's history:
- Allen Kagina: Appointed Commissioner General in 2004, she was charged with eliminating corruption in the URA. Under her leadership, tax collections increased significantly.
- Doris Akol: Replaced Allen Kagina as Commissioner General.
- John Musinguzi Rujoki: Appointed Commissioner General on 29th March 2020 by President Yoweri Kaguta Museveni.
URA SURPASSES 2022/23 FY TARGET
Revenue Collection and Economic Impact
When the URA was established in 1991, tax collection was 6.83% of GDP, amounting to UGX:133 billion. By 2015, taxes collected were 13% of GDP, amounting to UGX:11.2 trillion. Minister of Information Rose Namayanja noted that under Allen Kagina's leadership, the URA was successfully cleaned, and tax collections increased year-to-year.
The initiatives undertaken by the URA have enabled the authorities to improve their revenue mobilization performance, ease trade operations, and initiate a fight against corrupt practices in the customs service.
Taxes Administered by the URA
The URA is responsible for administering various taxes, including:
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- Customs Tariff Act, Cap.
- Excise Tariff Act, Cap.
- Income Tax Act, Cap.
- Stamps Act, Cap.
- Traffic and Road Safety Act, Cap.
- Value Added Tax Act, Cap.
Excise Duty
This is a tax imposed on specified imported or locally manufactured goods and services, essentially a tax on “luxury” items. The applicable rates may be specific or ad valorem. The tax is imposed on the value of the import; and in the case of locally manufactured goods, the duty (local excise duty) is payable on the ex-factory price of the manufactured goods. Exported locally manufactured goods are exempt from excise duty.
Customs Duty
This is a tax levied on goods imported (import duty) or exported (export duty) from Uganda at specific or ad valorem rates. The East African Community Customs Management Act 2004 (EACCMA) is the legal framework for customs operations in Uganda and the region as a whole. A customs union exists between the East African Community States of Uganda, Kenya, Tanzania, Rwanda, DRC, South Sudan and Burundi for the main purpose of promoting international trade between the partner states.
Goods imported into the country from outside the EAC must be valued for taxation purposes i.e. a customs value must be determined. The customs value forms the basis for computation of customs duties which include import duty, Value Added Tax, Withholding tax, Excise duty and other duties e.g. environmental levy. Applicable tax rates are defined in the Customs External Tariff.
Goods are valued using the following methods adopted by GATT (General Agreement on Tariff and Trade) and applied chronologically:
- Transaction value.
- Transaction value of identical goods.
- Transaction value of similar goods.
- Deductive value.
- Computed value.
Exports are zero rated tax wise to reduce costs for exporters and also make Ugandan products more competitive in the global market.
Tax structure in Uganda
To streamline export processes:
- Identify the operational export regime for the export.
- EX1 Permanent Direct Exports.
- EX2 Temporary Export/ Re-exports (not bonded).
- EX3 Permanent Re-exports (not bonded).
- EX8 Bonded exports (CPC 8400)/ re-exports (CPC 8471).
- Make sure that Export Incentives and Facilities are ready.
URA's Headquarters
URA’s headquarters is located in a 22-storey skyscraper, known as Uganda Revenue Authority House (URA Tower), located at Plot M 193/4 Kinnawataka Road, Nakawa Industrial Area, in the Nakawa Division of the city of Kampala, Uganda’s capital and largest city.
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